Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

2017 Investor Roundtable:General Discussion

This site may earn commission on affiliate links.
Status
Not open for further replies.
Yeah, that's been predebunked. First of all, subway tunnels are about the same diameter as the tunnels he proposes. Second, there'll be traffic congestion at the entrances and exits. Third, it takes 20 car tunnels to have the people-moving capacity of 1 subway tunnel. I wish him best of luck with the boring technology, but the idea of layers of car tunnels is actively stupid.
Hmm, how are you getting to 20 car tunnels to 1 subways tunnel? Subways come 5 minutes apart and generally stop at each station. Cars can come at higher frequency 10 per minute or more and travel at a higher average speed, not having to stop at every station, maybe twice the speed of subway trains. So car tunnels can get 100 times as many vehicles through per minute. Moreover, high occupancy vehicles can also travel in car tunnels to increase the average number of passengers per vehicle. It seems an equal flow of passengers per minute could be obtained with just one tunnel.

Congestion at exit points can be mitigated by a computerized controlling application that schedules entrances. Such a system would know where each vehicle intends to exit prior to entrance and can accurately predict travel time to exit. It also knows when all other vehicles currently in the network will arrive at that same exit. Thus, it can schedule a precise exit time such that system never gets backup at an exit. So the exits are never congested, but of course the entrances still are subject to congestion. But at an entrance, a vehicle has other options to keep traveling on surface streets. If there are lots of entrances along your route, they you keep traveling down surface streets until there is low congestion at an entrance. Once you enter, the path is clear all the way to your exit. Indeed, multiple exits may also be available. So if the system know your ultimate destination, it can select the best available exit to minimize total travel time to destination. If your car is autonomous, then your car is in communication with the tunnel controller all along the way and seamlessly optimizes your travel time. This sort of computer controlled system would allow such a tunnel to be utilized at much higher efficiency than a traditional tunnel for cars.

I think the basic thing that one is paying for in using such a system is to cut travel time by avoiding congestion. Perhaps one is willing to pay $1.5/minute to travel at 90 mph. This becomes a bargain when the alternative is to creep along at 15 mph in congested traffic. This is a very different kind of objective than what public transportation is about where one wants to minimize the public cost of transporting a large population no matter how slow it may be for that population of riders. So if your objective is to provide premium transport that minimizes travel time for occupants willing to pay to save time, this opens up very different alternatives.

Let's keep in mind the zombie apocalypse that will come with autonomous vehicles. This will be no utopia on public roads. Empty autonomous vehicles will ply the public roads without concern for how slowly they are moving. Moreover, some people will live in rolling man caves. Their lifestyle is that their vehicle is constantly taking them somewhere, but they park no where. Rather the occupants live in rolling homes. Freeways are a rolling parking lot for those too cheap to pay for parking. So the public roads will be worthless to anyone who actually needs to get somewhere in a short amount of time. And don't even think of flying, zombie drones fill the air with pizza delivery. In this world where you can creep along with zombie cars going 2 mph, the only way out is to pay the Boring Company for limited access high speed tunnels. Or you could walk through the dystopic landscape.
 
Did it say that they recognized 100% of the EAP revenue? They've not achieved feature parity with AP1 yet, nor 4 camera AP, so my guess is that the percentage of revenue recognized is still less than 100%. (But this is a very wild-assed guess based only on the way I would do it, and not about how it is done or the way it should be done).

the q1 letter starts with "Completed transition to internally developed Autopilot software" and the 10q makes no mention of any unrecognized autopilot revenue. if anyone has a good contact at investor relations, please reach out to them and see if they tell us?
 
sadly, the q1 17 numbers support your assessment. i feel like i haven't heard of any large deployments recently either, other than kauai.

The energy storage business was seriously overhyped. Tesla didn't have a convincing product and the market wasn't ready to buy. Simple as that. Now with version 2 of the Powerpack and Powerwall, Tesla has a chance to redeem itself. But they got off a bad start in 2017Q1 with a supply problem. Gigafactory output is/was low enough that the Hawaii order pushed back residential Powerwall deliveries because they couldn't fulfil both at the same time. I expect Q2 to be better but still not anything that would resemble a serious level of output.
 
thanks for that. ok so the split for ap 2 revenue:

q4 16: 35m / 5000 = 7,000 vehicles
q1 17: 46.1m / 5000 = 9,220 vehicles

regardless of what number i use for q4 ap2 vehicles (9000 or 13000 as suggested by @techmaven) i get a > 50% take rate in q4 16.
and the take rate in q1 17 drops to 37% (9220 / 25011 deliveries). how does that happen?

i'm all ears trying to understand this.
Or the 81m was for Q1 EAP only, not including the 35m carry over. Plus, the 35m carry over to Q1 2017 should not be 5000. They recognized a little bit (fen hundreds to a thousand maybe?) in Q4 2016.
 
i think 81m is the total figure for q4+q1 autopilot, they wrote it pretty clearly:
Automotive revenue increased by $1.13 billion, or 126%, in the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. This was primarily due to a 128% increase in deliveries to 18,437 vehicles resulting from the ramp-up of Model X as well as increased production and sales of Model S. Furthermore, vehicle average selling price increased by 4.9% primarily due to a larger proportion of Model X sales (which have higher average prices compared to Model S), a higher option mix and the recognition of $81.1 million of Autopilot 2.0 revenue during the three months ended March 31, 2017. These increases were partially offset by a $56.1 million decrease in sales of regulatory credits.
there's no way that could be for q4 autopilot only. hopefully ir will reply.

i didn't find mention of any autopilot revenue recognition in q4's 10k. but even some is recognized, it only increases the mystery because it would only further increase the q4 16 take rate and widen the difference i'm estimating in take rates between q1 17 and q4 16.

Or the 81m was for Q1 EAP only, not including the 35m carry over. Plus, the 35m carry over to Q1 2017 should not be 5000. They recognized a little bit (fen hundreds to a thousand maybe?) in Q4 2016.
 
i think 81m is the total figure for q4+q1 autopilot, they wrote it pretty clearly:
Automotive revenue increased by $1.13 billion, or 126%, in the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. This was primarily due to a 128% increase in deliveries to 18,437 vehicles resulting from the ramp-up of Model X as well as increased production and sales of Model S. Furthermore, vehicle average selling price increased by 4.9% primarily due to a larger proportion of Model X sales (which have higher average prices compared to Model S), a higher option mix and the recognition of $81.1 million of Autopilot 2.0 revenue during the three months ended March 31, 2017. These increases were partially offset by a $56.1 million decrease in sales of regulatory credits.
there's no way that could be for q4 autopilot only. hopefully ir will reply.

i didn't find mention of any autopilot revenue recognition in q4's 10k. but even some is recognized, it only increases the mystery because it would only further increase the q4 16 take rate and widen the difference i'm estimating in take rates between q1 17 and q4 16.
This is where I don't think it's pretty clear that 81 was Q4+Q1. In the same sentence, they were clearly talking about Q1 alone (ASP and option mix), which makes me kinda think the 81m is also Q1 alone.

Regarding recognizing some EAP in Q4, in Q4 update letter they said

"despite continued strong demand for Autopilot, we recognized almost no new Autopilot-related revenue in Q4, as software updates were delayed until Q1"

Almost no, so a bit.
 
  • Like
Reactions: EinSV
...And don't even think of flying, zombie drones fill the air with pizza delivery. In this world where you can creep along with zombie cars going 2 mph...
But how will that pizza drone know where to deliver my order, when my home is rolling down the road at mile 185.6...185.7...185.8..... ;)

I love your depiction, nevertheless.
 
The OP claimed the contribution indicated JB's expectation of a share price rise in the near term. Is it correct to interpret it as indeterminate of share price anticipation but just a function of nearing expirations?

I know right now you are thinking

Really? Since you can read my mind, how good are you in reading JB's?

According to the Proxy his option status, at 12/31/16 was:

Award Date..Exercisable..Un-Exercisable Un-Earned Strike..Expiration

a) 4/11/2016 10,599 52,999 —------------ 249.92 4/11/2026
b) 1/13/2014 55,000 -------------- 165,000 139.34 1/13/2024
c) 7/8/2013 1,050 —--------- —---------- 121.61 7/8/2023
d) 6/10/2013 700 —---------- —----------- 100.05 6/10/2023
e) 5/13/2013 700 ------------- —--------------- 87.80 5/13/2023
f) 4/8/2013 350 —----------- —------------- 41.83 4/8/2023
g) 3/11/2013 700 —---------- —----------- 39.10 3/11/2023
h) 2/11/2013 350 —--------- —------------- 38.42 2/11/2023
i) 6/11/2012 700 —----------- —------------ 29.12 6/11/2022
j) 2/13/2012 50,000 —------- —----------- 31.49 2/13/2022
k) 1/9/2012 350 —--------- —----------- 27.25 1/9/2022
l) 12/12/2011 350 —----------- —---------- 30.41 12/12/2021
m) 3/14/2011 350 —------------ —--------- 23.25 3/14/2021
n) 1/10/2011 50,000 —------- —--------- 28.45 1/10/2021
o) 9/13/2010 20,000 —------- —--------- 20.72 9/13/2020
p) 6/12/2010 2,450 —---------- —--------- 14.17 6/11/2017
q) 6/12/2010 116,650 —-------- —-------- 14.17 6/11/2017

The reason to sell/exercise the awards in p) and q) is obvious. But for the other ~12,000, why choose:
i) 4,209 of the 50,000 in n);
ii) 7,493 of the 50,000 in j);
iii) 270 of the 10,599 in a) ???

I see these were all reported as ISOs rather than Non-Qualifying awards, but why do an allocation rather than using all from the nearest expiration or the highest or lowest basis?

Executives tend to not sell shares unless they have a defined need ...

Do think the additional ~12,000 early exercise/sells may be related to the loans from the banking affiliates of the underwriting syndicates. SEC filings show JB's pledges of TSLA shares have been:
12/31/15 90,380
9/23/16 87,066
12/31/16 127,925

Director Denholm's "need" appears urgent. She sold 20,000 shares for $311.76 with a basis of $259.94 for a pre-tax gain of ~$1.04 million. Assuming an effective income and employment tax rate of about 55%, she netted about $467,000. Her rights would not have expired for over four years. In fairness, it was her first sale since appointment in August, 2014.

Executives tend to exercise options/sell stock in single larger swaths as opposed to a drip drip drip over time

Someone may need to have a sit down with Kimbal; so far in less than the first five months of 2017 his exercise/sells on Form 4s have been:
DATE SHARES
5/3/17 2,500
4/11/17 2,191
4/3/17 2,500
3/1/17 2,500
2/1/17 2,500
1/3/17 2,500
So far, selling those ~14,700 shares netted Kimbal a pre-tax gain of $3.5+ million.

In 2016 Kimbal sold ~20,800 shares in 4 fillings for a net pre-tax gain of $4.1+ million
In 2015 Kimbal sold ~24,600 shares in 4 fillings for a net pre-tax gain of $5.1+ million
In 2014 Kimbal sold ~31,600 shares in 5 fillings (basis not clearly reported)
In 2013 Kimbal sold ~22,500 shares in 5 fillings (basis not clearly reported)
In 2012 Kimbal sold ~18,200 shares in 2 fillings (basis not clearly reported)
In 2011 Kimbal sold ~6,700 shares in 2 fillings (basis not clearly reported)
In 2010 Kimbal sold ~50,800 shares in 1 filling (basis not clearly reported)

Likely all and most of the latter two transactions were cashing in his pre-IPO investment, but the rest are not bad compensation for attending 6 to 12 BoD meetings/year. SEC filings show Kimbal's pledges of TSLA shares have been:
12/31/15 148,333
9/23/16 148,333
12/31/16 164,154
(Likely reflects the conversion of pledged SCTY shares to TSLA shares) Kimbal's form 4s show he generally sells down to around the shares pledged.

I get the role that option awards play in SV compensation and the "corporate handcuffs" aspect of options and RSUs. My concerns are:
1. No officer nor director ever bought shares in the secondary market (even in February 2016) and most have sold frequently, even though their rights do not expire for years--(Elon has bought in some of the follow-on equity offerings but that appears to be more about maintaining effective control as the largest, but still minority owner and to help market the offering while using a line of credit from the banking affiliates of the underwriting syndicate.)
2. None of the criteria for option awards have ever been based on achieving Net Income goals.
YMMV.
 
  • Informative
Reactions: GoTslaGo and Lump
The following is not to exculpate Tesla's board members; rather it is to cast aspersion on the gamut of corporate boards (USA only; I've far less experience with non-American boards) -

Brian's observation that "No director ever bought shares in the secondary market" is horrifingly close to universal. But then again, why should they? They receive that steady stream of far lower-priced options.

It has been a pustule on the public corporation universe my entire life. Of course, I'm only 22, donchaknow.
 
  • Love
  • Funny
Reactions: neroden and SteveG3
What appeared would be a successful attempt by Warren Buffett to get Texas to allow vehicle manufacturers to also be their own retailers has been tabled due to Tea Party objections. Tesla may also have been allowed to sell directly to consumers in Texas, if this bill or a related one had become law.

Even in Texas, sometimes the billionaires lose

The bill could still be revived by May 29. If you are a Texan, I suggest writing your legislators.

Meanwhile, I suggest that Buffett sue Texas in federal court, just as Tesla is doing against Michigan.
 
Last edited:
Someone may need to have a sit down with Kimbal; so far in less than the first five months of 2017 his exercise/sells on Form 4s have been:

DATE SHARES
5/3/17 2,500
4/11/17 2,191
4/3/17 2,500
3/1/17 2,500
2/1/17 2,500
1/3/17 2,500
So far, selling those ~14,700 shares netted Kimbal a pre-tax gain of $3.5+ million.

In 2016 Kimbal sold ~20,800 shares in 4 fillings for a net pre-tax gain of $4.1+ million
In 2015 Kimbal sold ~24,600 shares in 4 fillings for a net pre-tax gain of $5.1+ million
In 2014 Kimbal sold ~31,600 shares in 5 fillings (basis not clearly reported)
In 2013 Kimbal sold ~22,500 shares in 5 fillings (basis not clearly reported)
In 2012 Kimbal sold ~18,200 shares in 2 fillings (basis not clearly reported)
In 2011 Kimbal sold ~6,700 shares in 2 fillings (basis not clearly reported)
In 2010 Kimbal sold ~50,800 shares in 1 filling (basis not clearly reported)

Likely all and most of the latter two transactions were cashing in his pre-IPO investment, but the rest are not bad compensation for attending 6 to 12 BoD meetings/year. SEC filings show Kimbal's pledges of TSLA shares have been:
12/31/15 148,333
9/23/16 148,333
12/31/16 164,154
(Likely reflects the conversion of pledged SCTY shares to TSLA shares) Kimbal's form 4s show he generally sells down to around the shares pledged.

Crikey! I've got a lot of drinking to do!
 
  • Funny
Reactions: anticitizen13.7
Volvo credits Tesla for creating EV demand, says they will stop developing diesel engines to focus on EVs

"Today, Volvo Chief Executive Officer Hakan Samuelsson said that the current generation of diesel engines will be the automaker’s last and that they will instead focus on electric vehicles.

And he also gave credit to Tesla for launching demand for electric vehicles, which actually plays right into the automaker’s mission."

I'm glad Volvo is giving some credit to Tesla here. I'll toss some back their way: they seem to be one of the only legacy auto manufacturers seriously preparing for the all-electric future. They have PHEV versions of the XC90, S90, V90, and as of this month the XC60 which sells around as much as the first three combined. We have an XC90 T8 PHEV, and it's quite good for a PHEV.

They have a series of full EVs planned for 2019. And now they're actively planning the beginning of their ICE obsolescence.

It's not as much as I'd like or as soon as I'd like, but it's more than I've seen from any other legacy manufacturer.
 
I'm glad Volvo is giving some credit to Tesla here. I'll toss some back their way: they seem to be one of the only legacy auto manufacturers seriously preparing for the all-electric future.

The Credit should probably go to Volvo owner Geely. The Chinese government is making Chinese automakers see the light or feel the heat. China is the biggest automotive market by units and within a decade by dollars. So goes China so goes the world. Japan trying to will fuel cells into existence is almost comical.
 
(Elon has bought in some of the follow-on equity offerings but that appears to be more about maintaining effective control as the largest, but still minority owner and to help market the offering while using a line of credit from the banking affiliates of the underwriting syndicate.)

He also converted a $10M bond into shares at $300 a piece.
 
  • Like
  • Informative
Reactions: neroden and TMSE
Status
Not open for further replies.