2017 Investor Roundtable:General Discussion

[dmckinstry]

Bear attack not over. Now all the opinion pieces come out to try to pile on.

Tesla’s bad week gets worse as Elon Musk’s credibility takes another hit

Yeh. Met guidance but not Wall Street's expectation. So that's EM's fault?

 

[Reciprocity]

Showroom/test drive cars aren't "used" as they haven't been titled, so they still qualify for the federal $7,500 tax credit.

Woohoo, I want one then.. haha.

 

[erthquake]

Yeh. Met guidance but not Wall Street's expectation. So that's EM's fault?

Of course it's EM's fault! Don't you know that Wall Street is a bastion of emotional and analytical intelligence? /s

Edit: Oops, I forgot integrity, too.

 

[dmckinstry]

Of course it's EM's fault! Don't you know that Wall Street is a bastion of emotional and analytical intelligence? /s

Edit: Oops, I forgot integrity, too.

Yep. Especially Integrity.

 

[Intl Professor]

I wonder if this means something.

Bite me.

 

[Reciprocity]

Of course it's EM's fault! Don't you know that Wall Street is a bastion of emotional and analytical intelligence? /s

Edit: Oops, I forgot integrity, too.

What part of the street expected them to Meet their guidance? Why would they expect it after 2016 where they missed the lower mark by 3k devilver 76,230 vs 80k-90k estimated. Meeting the estimate seems like a hit in this scenario. You have to remember that they made this estimate just 40 days or so after not delivering the 80-90k in 2016. If im an analyst, do I believe that a fairly new 100KWh pack, which is a different animal then the previous packs because Its more densely packed so they needed to use a new process or equipment setup to package them. If I buy that excuse and lets face it, its an excuse, but its an excuse that they probably knew was going to be an issue. If you think about it, they know better then anyone that the pack is different, requires different cooling because the cells are more tightly packed. This could not have been a surprise to Tesla. So my guess is that the 47-50k was an estimate of best and worst case scenario where if they got the process down quickly enough, 50k would be possible. If they had some issues then 47k was the worst case scenario. What I dont understand is why no one believes them that they had an issue, but still believes they where going to deliver 50k based on what information? Not information from Tesla. 53% YoY is pretty damn good. If they do that the next two quarters you would be looking at 75.6k cars for the second half, which sounds just about right when you include the model 3. They could actually get closer to 80k. It will be very interesting to see where they guide, but my guess would be 75K-80K for 2H2017. If they hit the low end of that guidence, it would be 52+% and everyone will be sad im sure.

 

[jhm]

Did we debunk the Guardian peice, in particular the quote below?

Musk also said that Tesla should not be compared to major US carmakers and that its market capitalization, now more than $50bn, is unwarranted. “I do believe this market cap is higher than we have any right to deserve,” he said, pointing out his company produces just 1% of GM’s total output.

Tesla factory workers reveal pain, injury and stress: 'Everything feels like the future but us'

 

[Bobfitz1]

In theory the market as a whole should shrink over the next 12 months as model S owners that used to be Prius owners downgrade. In that sense the model S percentage share will actually go up but it's a share of a smaller market. The good thing is that if you are doing to lose market share to someone, lose it to yourself. After 2018, then yes you could see Tesla's share eclipse 40 precent and others drop to 7-8% on the high end. But even the great model S will plateau unless car companies don't react and start going out of business, which could happen.

Only time will tell, but I see Tesla being more like Apple iPhone where they only have 34% market share in the US but 90+% of the profits

Thanks for the more detailed explanation of your thesis. It will be great to see statistics as we go as to what % of MS owners downgrade to M3. I surely don't know. I do know that its common that once you are exposed to $20+ bottles of wine, going back to what you felt was plenty tasty for $5 - 10 doesn't always satisfy. If resale value of MS stays high, it may not be the same level of economic stretch to stay with the S you've grown to love. Another unknown is what portion of the stretch buyers will be happy just driving their MS for eight, ten, etc. years before buying a new car.
Switching topics, do you or others suspect that the very recent release of HW and SW that has made 0 - 60 of MS 75s a full second faster,
may be a tip off that at end of month when all M3 mysteries are revealed, the 0 - 60 time Tesla has been saying we should expect will turn out to be .5 or .75 seconds faster? That and a slightly higher range would be awesome frosting on the cake. The kind Elon loves to dish out to poke nay sayers and shorts in the eye.

 

[mrdoubleb]

Random weekend fact: Elon's Twitter account just passed the 9.9M followers mark in the past few hours or so (was 9.8 a few hours ago when I checked for "the money shot" a.k.a. Model 3 SN1).

Not bad... Will be fun to see how long before we cross into 10M.

 

[Reciprocity]

Thanks for the more detailed explanation of your thesis. It will be great to see statistics as we go as to what % of MS owners downgrade to M3. I surely don't know. I do know that its common that once you are exposed to $20+ bottles of wine, going back to what you felt was plenty tasty for $5 - 10 doesn't always satisfy. If resale value of MS stays high, it may not be the same level of economic stretch to stay with the S you've grown to love. Another unknown is what portion of the stretch buyers will be happy just driving their MS for eight, ten, etc. years before buying a new car.
Switching topics, do you or others suspect that the very recent release of HW and SW that has made 0 - 60 of MS 75s a full second faster,
may be a tip off that at end of month when all M3 mysteries are revealed, the 0 - 60 time Tesla has been saying we should expect will turn out to be .5 or .75 seconds faster? That and a slightly higher range would be awesome frosting on the cake. The kind Elon loves to dish out to poke nay sayers and shorts in the eye.

I posted a poll here a month or so ago, to lazy to find it. I focused on current owners with reservations for the 3. Most where not down grading and some where actually buying multiple 3s. What worried me was that 23% where undecided. Then I got to crunching the numbers. If 10% of all reservations (400,000) are current owners and 30% of those are trading down. That would be 12,000. Which seems like alot, but that is world wide and over the next year or longer. It adds up to no more then 3 cars a month on average per sales/service center per month. I could see those cars being consumed by people who see the model 3 on the roads later this year and next and are unwilling to wait a year for a new model 3. This would be completely new demand that's not included in the group's we have discussed already and people who don't yet have a reservation for the 3. Some of this demand will help clear out used model S inventory but some will opt for a new model S, especially with the tax credits phasing out next year.

I see a huge Spike in demand Jan - June of next year as excitement from the 3 and phasing out of the tax credits drives people to the model S.

 

[RobStark]

What about south of The Wall? I hear there are some free folk looking for work.

The Free Folk will not bend the knee to The King in The North much less the Fresh King in Bel-Air.

 

[FredTMC]

So they had 4,650 in transit at end of Q1 and 3,500 in transit at end of Q2. They produced 3000 more cars then delivered in Q2. Where did the 4,000 cars go? 4k of show models, test drive cars and loaners? that seems high.

Although I went to a Tesla store in Decatur GA about a month ago and the lot was full of Infiniti SUVs. They said they were all loaners. I guess they were leasing them. So maybe this is just the cost of not having dealerships... still seems high.

So, regarding "service loaners". Check THIS out.

I took my MS in for service this week. They had a loaner for me (a new MS 75). Fortunately I didn't get sent to enterprise car rental. That HAS happened to me on a couple occasions over the years.

This time a nice girl from Enterprise Car Rental was sitting at the loaner booth at the service center. She walked me around the car before leaving to inspect for damage. a brand new (100mi) MS 75kWh.

She explained to me that the local Enterprise car rental just recently took delivery of 25 MSs and the in-house loaner program just started. Only bad part is that she explained the car has AP disabled. I guess Enterprise is worried about liability. Zzzzz

Takeaway: I think tesla sold a fleet of new MSs to Enterprise at the end of the quarter. So, if this Orange County Enterprise got 25 MSs you can imagine it was a lot of cars nationally.

 

[MP3Mike]

Takeaway: I think tesla sold a fleet of new MSs to Enterprise at the end of the quarter. So, if this Orange County Enterprise got 25 MSs you can imagine it was a lot of cars nationally.

Someone else just posted that the Buena Park Enterprise ordered 8 MSs, but they have only gotten two of them so far: Battery Charge Level Will Be Restricted

 

[MXWing]

I'm going to have to go ahead and disagree* with you here.

Since I have an old, slow, blind 2013 car, I have no chance for Autopilot, and yet, "I will never buy another non-EV" because I believe the drivetrain itself (quiet, torquey and responsive, one-pedal driving) is the game changer.

* Mostly in jest... I do agree awareness is not there yet.

Liked your post. I know where you are coming from. I would pick up a cpo S without AP if wife would have allowed it.

Your next Tesla will have all the bells and whistles for a few months at least.

 

[jhm]

Did we debunk the Guardian peice, in particular the quote below?



Tesla factory workers reveal pain, injury and stress: 'Everything feels like the future but us'

Is it our conclusion that these are quotes from May this year and not just taken out of context from prior years?

I'm trying to respond to a recent Bloomber article which continues to use those quotes. Any help would be appreciated.

 

[Reciprocity]

I posted a poll here a month or so ago, to lazy to find it. I focused on current owners with reservations for the 3. Most where not down grading and some where actually buying multiple 3s. What worried me was that 23% where undecided. Then I got to crunching the numbers. If 10% of all reservations (400,000) are current owners and 30% of those are trading down. That would be 12,000. Which seems like alot, but that is world wide and over the next year or longer. It adds up to no more then 3 cars a month on average per sales/service center per month. I could see those cars being consumed by people who see the model 3 on the roads later this year and next and are unwilling to wait a year for a new model 3. This would be completely new demand that's not included in the group's we have discussed already and people who don't yet have a reservation for the 3. Some of this demand will help clear out used model S inventory but some will opt for a new model S, especially with the tax credits phasing out next year.

I see a huge Spike in demand Jan - June of next year as excitement from the 3 and phasing out of the tax credits drives people to the model S.

Thanks to @Troy - 7% of existing owners have reservations as of the Q1 earnings call:

So even if they are at 500,000 reservations, the numbers above hold at less then 3 cars per location per month.

 

[neroden]

Marry her and then you'll find out what she really thinks of the Speedos.

Oh, we've been together for almost 20 years now. There are unfortunately some sound financial reasons not to get married legally; not worth explaining.

 

[neroden]

So, regarding "service loaners". Check THIS out.

I took my MS in for service this week. They had a loaner for me (a new MS 75). Fortunately I didn't get sent to enterprise car rental. That HAS happened to me on a couple occasions over the years.

This time a nice girl from Enterprise Car Rental was sitting at the loaner booth at the service center. She walked me around the car before leaving to inspect for damage. a brand new (100mi) MS 75kWh.

She explained to me that the local Enterprise car rental just recently took delivery of 25 MSs and the in-house loaner program just started. Only bad part is that she explained the car has AP disabled. I guess Enterprise is worried about liability. Zzzzz

Takeaway: I think tesla sold a fleet of new MSs to Enterprise at the end of the quarter. So, if this Orange County Enterprise got 25 MSs you can imagine it was a lot of cars nationally.

Aaaaaah. I bet they're only doing it in California. I wish Enterprise was renting model S out here in Ithaca, NY!

 

[FredTMC]

Aaaaaah. I bet they're only doing it in California. I wish Enterprise was renting model S out here in Ithaca, NY!

Yeah, I'm wondering if they did this at locations where they often had loaner shortages historically. Or, possibly, to locations where they could deliver them to Enterprise by end of Q1 and then Enterprise redistributes nationally.

 

[SpaceCash]

Super-good commment!

Negative. Super-exponential is a mathematical term, not some filler BS