2017 Investor Roundtable:General Discussion

[neroden]

I do wonder about the Takata airbag recalls; Tesla said they were doing them a few cars at a time, so to speak; they recalled the 2012s but are waiting to recall the 2013s (they "go bad" over time, I guess?) I wonder when they'll recall the 2013s.

Well, if they are taking suggestions I would be fine with you, DaveT, Luv, Ken, Surfside, esk or Neroden.

Heh. Thanks for the thought but I don't think I can commit the time given my health issues!

 

[jschwefel]

I do wonder about the Takata airbag recalls; Tesla said they were doing them a few cars at a time, so to speak; they recalled the 2012s but are waiting to recall the 2013s (they "go bad" over time, I guess?) I wonder when they'll recall the 2013s.

Heh. Thanks for the thought but I don't think I can commit the time given my health issues!

I have a 2012 Model S and I received a recall notice from Tesla, but the part wasn't in yet. Their expectation is sometime this summer. I'm not too worried though; I also have a 2005 Subaru and the dealer has told me the exact same thing.

 

[Buddyroe]

Following Tesla news manicly is exactly what lead me to distrust big news sources that I'd previously trusted. There was clearly a financial agenda (pro or con) behind 95% of the Tesla stories in Google news. After looking at other companies I found the same in the coverage of Apple and other hot stocks.

Now I just expect it.

Trust me, I came to realize that EVERY news organization has an agenda right after I became a Tesla fan. And what disgusts me the most is how blindly people will follow AND trust what they hear on the news (both left and right).

Today, I had a work colleague email me an article and the headline read - "Tesla recalls 53,000 cars and being sued for poor performing AP - Stock Tumbles". The subject of the email was "Ouch!". Of course I took 15 minutes to write a reply and educate him. His response? Crickets. People love the comfort of their ignorance.

 

[MikeC]

I'm not sure if anyone responded to your post, but this is an interesting find. GF1 is Nevada. The implication that they plan on making 500,000 cars in Sparks, in addition to output from Fremont, where they intend to double the plant size is a bit interesting. known capex plans, and plans in place for at least 1mm cars a year by 2020. This is the sort of info TT007 and ValueAnalyst should be getting excited about. Only one other GF by 2020 and they could be making close to 2mm annualized by the end of 2020.

Hope these Grohman guys start to realize how busy they are going to be for the next 10 years.

I think you're mistaken - the quote only says that GF1 will make enough batteries for production of 500k cars, but the cars are still being made in Fremont.

 

[mmd]

Reading through the TSLA 2016 10-K, this passage stood out to me;

"Gigafactory 1 is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Gigafactory 1 is currently expected to attain full production capacity by 2020, which is anticipated to be sufficient for the production of approximately 500,000 vehicles annually as well as for the production of our energy storage products."

This doesn't rhyme with how I have understood their 2020 guidance.
Should I chalk this up to a poorly written 10-K?

tsla-10k_20161231.htm

Must be a mistake. Tesla plans to produce 500K cars in 2018. From where are they going to buy the batteries for those cars, if GF1 will reach 500,000 car cell capacity in 2020? How will they save on cell costs for the 500,000 cars next year without the cells enjoying the economy of scale from the GF?
Someone should write to IR to fix the mistake in the 10-K.

Tesla puts pedal to the metal, 500,000 cars planned in 2018

Tesla Motors Inc (TSLA.O) said it was stepping up production plans for its upcoming Model 3 mass-market sedan and would build a total of 500,000 all-electric vehicles in 2018, two years ahead of schedule, but warned that spending will ramp up in tandem.

The company, which three months ago aimed to make a net profit in the final quarter of this year, gave no profit target on Wednesday and said capital spending would rise about 50 percent more than previously forecast this year, to around $2.25 billion.

New shares and debt will likely be issued at some point, Chief Executive Elon Musk added.

 

[racer26]

The world could wait for 200 Gigafactories for 10 TWh/year (100 years?) to begin the transition. Or it could churn out hybrids like bullets from machine gun, if it thinks global warming is important.

Toyota Corolla MPG (Fuel Consumption)
Toyota Corolla: 168g/km.
Toyota Prius hybrid: 70g/km
1 100 KWh battery pack of Tesla Model S 100 => 67 Toyota Prius => 58% of 168g/km * 67 CO2 eliminated => Emissions from 39 cars gone.

Give it a rest with the whole "if Tesla actually cared about global warming they'd just sell hybrids" crap.

Seriously, you're glossing over the most obvious flaw with your elaborate plan.

You have to actually sell them, and in order to do that, people have to want to buy them.

Hybrids are anemic weird mobiles. People don't want them. Even halfway decent performance car hybrids which people might actually want to buy, like a BMW i8 or the new NSX are too expensive.

Conventional hybrids are a complete waste - at their core, they are just a somewhat more efficient gasoline fired vehicle. I could maybe be convinced there is some room for *good, well designed, attractive, affordable* PHEVs with a decently large all-electric range, a class which currently only contains 0 or 1 cars, depending on who you ask.

 

[brian45011]

Related party excerpts from proxy:

"
Moreover, in December 2015, SolarCity issued $10 million in principal amount of zero-coupon convertible senior notes due December 2020 to the Elon Musk Revocable Trust dated July 22, 2003, of which Elon Musk is the trustee (the “EM Trust”), at the same terms at which such notes were offered to an unaffiliated purchaser. In connection with the SolarCity acquisition, such convertible senior notes became convertible into 33,333 shares of Tesla common stock, at a conversion price of $300. In August 2016, SolarCity issued $65 million in aggregate principal amount of 6.50% Solar Bonds due February 2018 to Elon Musk, upon the same terms and conditions offered to the public. In April 2017, Mr. Musk agreed to exchange the 6.50% Solar Bonds for a $65 million promissory note bearing interest at 6.5% issued by SolarCity on substantially identical terms, including the remaining maturity.

Prior to the SolarCity acquisition, we had entered into a number of agreements with SolarCity, including pursuant to requests for proposals and other objective selection processes by Tesla and/or SolarCity. For example, in December 2015, we entered into a master supply agreement with SolarCity that, among other things, governed SolarCity’s purchase of Tesla energy storage products. The purchase orders issued by SolarCity, and accepted by Tesla, under this master supply agreement in 2016 included a purchase order for a 13 MW/52 MWh Powerpack system for use in SolarCity’s Kauai Island Utility Cooperative project in Kapaia, Hawaii. We recognized approximately $18.0 million in revenue from SolarCity under purchase orders issued under this agreement during fiscal year 2016...

In March 2017, the 4.40% Solar Bonds due March 2017 held by SpaceX were repaid in full..."

 

[mmd]

Give it a rest with the whole "if Tesla actually cared about global warming they'd just sell hybrids" crap.

Seriously, you're glossing over the most obvious flaw with your elaborate plan.

You have to actually sell them, and in order to do that, people have to want to buy them.

Hybrids are anemic weird mobiles. People don't want them. Even halfway decent performance car hybrids which people might actually want to buy, like a BMW i8 or the new NSX are too expensive.

Conventional hybrids are a complete waste - at their core, they are just a somewhat more efficient gasoline fired vehicle. I could maybe be convinced there is some room for *good, well designed, attractive, affordable* PHEVs with a decently large all-electric range, a class which currently only contains 0 or 1 cars, depending on who you ask.

I am sorry; calling 58% reduction in CO2 emissions (with no supporting infrastructure such as charging stations, and negligible use of scarce batteries) "somewhat more efficient" shows your weakness in math. You probably haven't checked out the global hybrid sales figures. Despite the odds stacked against them in recent years, they have done fairly well. Next time, please back up your statements with data/links. You have provided 0.

Toyota alone sold 9 million bybrids by this time last year: Worldwide Sales of Toyota Hybrids Surpass 9 Million Units | TOYOTA Global Newsroom

Here is the 2017 Hyundai Ioniq hybrid, with 59/57/58 mpg. Tons of safety features and conveniences for ~$25k, no government incentives. Looks quite good to me. But beauty is the eyes of the beholder.
Granted, its 0-60 mph is not as sprightly as a tesla Model S. But most people never go to a race track.
Hyundai Ioniq - Fuel Efficiency & Driving Experience Combined
2017 Ioniq Hybrid | Hyundai USA

 

[schonelucht]

Thanks @brian45011 good information! Also. Beta Prototype of Model 3 was validated in Q1 as a performance milestone for Musk options vesting.

 

[TradingInvest]

Trust me, I came to realize that EVERY news organization has an agenda right after I became a Tesla fan. And what disgusts me the most is how blindly people will follow AND trust what they hear on the news (both left and right).

Today, I had a work colleague email me an article and the headline read - "Tesla recalls 53,000 cars and being sued for poor performing AP - Stock Tumbles". The subject of the email was "Ouch!". Of course I took 15 minutes to write a reply and educate him. His response? Crickets. People love the comfort of their ignorance.

Couldn't agree more. Here is my observation (speculation), the guy at BusinessI*** normally writes negatively about Tesla. But occasionally for a period of a few weeks/months he would write very positively. I suspect a hedge fund is behind him, he writes in a way that fits the hedge fund's need. When the fund switches to short, he will be negative again. This is a huge business. They used to allow readers to comment, but many readers keep pointing out he is a paid basher. Now they banned reader commenting. I wonder why?

 

[xhawk101]

Looking for that ignore button

 

[myusername]

Elon Musk wants to link human brains with computers in four years

why does Elon always put "2 years" or "4 years" on his ideas?... we KNOW this isn't true... we KNOW his accuracy on timeline estimates is sub 10%...

so why does he keep doing it?... and why do people keep listening to it?

 

[Starno]

Elon Musk wants to link human brains with computers in four years

why does Elon always put "2 years" or "4 years" on his ideas?... we KNOW this isn't true... we KNOW his accuracy on timeline estimates is sub 10%...

so why does he keep doing it?... and why do people keep listening to it?

When he misses it's never by a big margin, he says 4 years, that probably means 5-6 years. It's ok.
Why is he doing it ? Because if he would say 5-6 years, it would take 7-8 years.
By doing that, he put rush on the employees and suppliers etc. so they work harder.

 

[ValueAnalyst]

Elon Musk wants to link human brains with computers in four years

why does Elon always put "2 years" or "4 years" on his ideas?... we KNOW this isn't true... we KNOW his accuracy on timeline estimates is sub 10%...

so why does he keep doing it?... and why do people keep listening to it?

he also sometimes beats his estimates: the original plan was to produce 500,000 cars in 2020, and now it's 2018, and my estimate Tesla will reach run-rate 500,000 in 1H18. It really depends on how important the milestone is.

 

[mutle]

I hope the Tesla shorts never become this insane:

BERLIN -- A 28-year-old German-Russian citizen was arrested on Friday in Germany on suspicion of bombing the bus carrying the Borussia Dortmund football team in an attack last week that officials alleged was motivated by financial greed.

[...]

Prosecutors said that the suspect had taken out a loan and bought a large number of so-called put options for shares of Borussia Dortmund, betting on a drop in the share price after the attack.

"We'd like to think that the suspect is responsible for the attack on the team bus," Frauke Kohler, spokesperson for the federal prosecutor's office in Germany, said in a brief statement to reporters. "We were put on to the suspect's tracks by suspicious option deals. He in total bought three different derivatives and gambled on falling stock prices.

"He bought the majority of the derivatives on April 11, the day of the attacks. The suspect took out a loan over several €10,000. His profit would have increased all the lower the stocks would have dropped. We can't say right now how high the profit could have been exactly."

German officials: Borussia Dortmund attack suspect acted out of greed

 

[myusername]

he also sometimes beats his estimates: the original plan was to produce 500,000 cars in 2020, and now it's 2018, and my estimate Tesla will reach run-rate 500,000 in 1H18. It really depends on how important the milestone is.

yes... but he said that 1 year ago... which made it "2 years from now" then... and HE HASN'T ACTUALLY DONE THIS YET... I love how you guys mark off accomplishments for things that have not happened... "Look... he made a more aggressive promise than before... so he's ahead of schedule!"

it's an accomplishment AFTER it's been completed... NOT before... you are referencing something that is NOT real.

 

[anticitizen13.7]

why does Elon always put "2 years" or "4 years" on his ideas?... we KNOW this isn't true... we KNOW his accuracy on timeline estimates is sub 10%...

so why does he keep doing it?... and why do people keep listening to it?

I think he does it to troll people and make them angry. Anytime Elon makes grand statements/predictions, many elements of the traditional car hobbyist community and Wall Street naysayers become enraged.

Steve Jobs used to do the same thing. If you watch Apple videos from the beginning of the OS X era through the beginning of the iPhone era, it is much the same: how "incredible" the product is or will be. "Most advanced operating system in the world", blah blah. Never mind that upon release OS X was unfinished in many ways. It took Apple until OS X 10.3 to really get OS X to a decent polish. Some would argue that it took until 10.4.

There may be psych warfare elements at play IMO. It's working. People are really scared of Tesla, although they would deny it.

 

[ValueAnalyst]

yes... but he said that 1 year ago... which made it "2 years from now" then... and HE HASN'T ACTUALLY DONE THIS YET... I love how you guys mark off accomplishments for things that have not happened... "Look... he made a more aggressive promise than before... so he's ahead of schedule!"

it's an accomplishment AFTER it's been completed... NOT before... you are referencing something that is NOT real.

I certainly understand your argument, but that doesn't mean the revision is meaningless. It should be discounted, yes, but it cannot be completely ignored. If you ignore it, and wait for it to happen, then the stock will likely already have moved.

Also, note that my estimates are on the bullish side of the TMC spectrum, so it may be best to not generalize the whole forum as "you guys."

 

[DurandalAI]

watching various media coverage on this recall - cnbc and street.com for example - i am starting to feel i understand why there are so many complaints about fake news. the cnbc spot the anchor kept trying to drag the guest expert to saying it was a big deal - even though he kept repeating it was a nonevent.

i'm also surprised the stock hasn't recovered the 5 or so points it lost. makes me wonder if she's getting a little tired after such a long sprint.

It's a classic example of why I don't trust crap the media says as a whole unless I've seen the same info from 2 or 3 foreign news sources. Every story being told is just that, some narrative which is being pushed by someone who calls the shots at the news agency. It's ALL fake news, it's just a matter of who's official narrative you're listening to. /rant

 

[Hogfighter]

The world could wait for 200 Gigafactories for 10 TWh/year (100 years?) to begin the transition. Or it could churn out hybrids like bullets from machine gun, if it thinks global warming is important.

Toyota Corolla MPG (Fuel Consumption)
Toyota Corolla: 168g/km.
Toyota Prius hybrid: 70g/km
1 100 KWh battery pack of Tesla Model S 100 => 67 Toyota Prius => 58% of 168g/km * 67 CO2 eliminated => Emissions from 39 cars gone.

People don't buy cars solely to save the planet!! Sheesh.

That's what Tesla figured out years ago....why can't you (and John Petersen?)