2017 Investor Roundtable:General Discussion

[Curt Renz]

CBS This Morning - Saturday July 29

 

[Matias]

if you think Tesla's target is 800k/yr... then you'd better dump all of your holdings in TSLA in minute one of premarket on Monday.

Clearly less than 10% of my investments are on TSLA and my horisont is over ten years. Maybe ten years from now Tesla sells more than 800k in a year. Maybe not.

 

[ValueAnalyst]

It looks like the only WAG on Model 3 I made that so far is still standing (for now) is that roughly 25-30k Model 3 vehicles will likely ship in 2017.

That WAG will likely not stand either.

A quick look at the exponential ramp graph Elon shared shows at least 2,500/week avg for 4Q17, so more than 30k deliveries.

Given that Elon also said he knows he's "sandbagging [production rate] a lot," 30k in 4Q17 may also prove conservative.

 

[ValueAnalyst]

On the reservation number: I bet the net number is high (reservations - cancellations) and I also bet the turnover is high. Like to pick an example, they have had 2M reservations and 1.5M cancellations or something. And after the event, they turnover might be nearly 100% again as new people pile in for reservations and others give up due to controversial design choices and/or pricing. The list might just need to sort itself out now to hold people who want *this* car at *this* price whereas before it had a lot of speculative reservation holders. All this is fine and healthy and I wouldn't show a tally either. People would data mine it to death. Any time there was a week-on-week decline the press would lose its mind with articles.

I'm sorry. I appreciate the vast majority of posts, but your example is likely way off mark. Why would the turnover of reservations be so high?! How many people do you know that have canceled their reservation? I have two and I haven't even thought about canceling either, and I know at least 5 people who reserved 2 Model 3's and all of them are increasingly excited about the car.

Also, the following shows how the unofficial Model X reservation count progressed even though Model X was massively delayed with lots of negative press around Falcon Wing door production leading up to initial production and beyond.

I think this type of progression is very reasonable: accelerating reservations and low cancellation rate despite heavy negative press around Falcon Wing doors. I would expect this trend to be even better for Model 3 because of higher brand value, better Supercharger coverage, and better execution thus far.

 

[anticitizen13.7]

why not?... i thought the primary objective was to save the world... the more cars sold the better... or am I way off the mark on this too?

if Tesla completely replaces BMW with the M3... what do you think its market cap should be? 10X BMW?... right now it's 1X BMW... but they'll just keep growing, right?... that was the whole argument for for why TSLA trades at current auto company's value... because Tesla's sales will just keep growing right past BMW and beyond...

but wait... you just pinned the M3 in the 3 series market. so... when will Tesla justify that $1000 share price ($200b market cap) with 10m/year (Toyota sized sales)?

now is where you start talking about the Model Y, right?... and Tesla Energy, Solar Roofs, etc., right?

so, again, I guess I was off the mark on this one too... it turns out the Model 3 wasn't the product that would save the world and justify TSLA heading to $1T... I'm just supposed to keep believing.

man... i've had this all wrong.

Worldwide, the 3-Series and C-Class market was around 900k units total for 2016. Throw in another 340k worldwide for the Audi A4.

In just the US market, figure 90-100k Lexus ES and IS sales, 50k for Acura TLX and ILX, 20k for Infinity Q50. Then there are the more upmarket mainstream midsize sedans that sell for $26,000-$36,000. Honda sells about 30k/month of these in the US alone (though some are base models, most are at least EX trim). On a TCO basis the Model 3 could be price competitive with nicer mid-sizers.

My point in all of this is that Tesla has a large addressable market with Model 3. If Tesla can take a large % of this market, while using economies of scale and advanced manufacturing to bring costs down, there could be a path to future profits that justify a higher share price. Like all growth stocks, this is a bet. People like you want certainty, which is unfortunately not an aspect of companies like Tesla. Invest elsewhere. TSLA is clearly beyond your risk tolerance.

 

[Intl Professor]

They no longer feel they have unproven technology from an unproven company that requires much more warranty than the competition. Just needs to be competitive.

Also, aren't the batteries the new type and they have less experience with them?

 

[D-egg-O]

i went out for some drinks tonight... came back... decided to spin up the "reveal" videos... and so far... about 15 minutes in... i think i might hang myself with my own vomit. this is ridiculous.

 

[anticitizen13.7]

Please stop allowing perma-bears leverage TMC to spread their FUD.

Responding to FUD detracts from quality of the discussion, not add to our collective knowledge of the company.

IMO, bad argument should always be contested.

Allowing FUD to be posted without rebuttal means that less knowledgeable readers don't hear the other side of the issue.

 

[myusername]

That WAG will likely not stand either.

A quick look at the exponential ramp graph Elon shared shows at least 2,500/week avg for 4Q17, so more than 30k deliveries.

Given that Elon also said he knows he's "sandbagging [production rate] a lot," 30k in 4Q17 may also prove conservative.

ok VA... you were arguing with us for 100k+ last spring... so how about we hold Elon to this graph this time instead of conveniently forget the past...

you see what I did there?... I drew lines at the significant months at the mid-point of what is roughly the avg weekly rate for the month. To me it looks like:

Aug: nothing
Sep: nothing (maybe 400)
Oct: avg: ~1.25k/wk -- total: 5k
Nov: avg: ~2.5k/wk -- total: 10k
Dec: avg: ~4.5k/wk -- total: 18k

or a total of 33k in 2017... just like you said. but here's the thing(s):

A) this graph is BS... Elon is supposed to be an engineer?... then you don't put a Y-axis on a graph without multiple reference points while also not stating whether or not it's linear.

B) why does this S-curve start plateauing in Dec?... should the S-curve be MUCH larger extending well into 2018/19 before it plateaus?... to me this looks like something they just whipped up really quick to keep the speculation of 2017 deliveries alive.

my expectation for 2017 is 10k or less.

 

[ZenMan]

For all that have a certain user on ignore, I need to highlight this post. It is absolutely great. @myusername posted "i went out for some drinks tonight... came back... decided to spin up the "reveal" videos... and so far... about 15 minutes in... i think i might hang myself with my own vomit. this is ridiculous." And then D-egg-O posted the "Do it" Video. Love it!

 

[kbM3]

I understand moving away from having the capacity as the defining model number as with the S/X. But not even mentioning it in the spec sheet signals that Tesla is not very confident about something. And I guess it's their base model that's the problem. Doing the math we are looking at a 53kWh car that is topping out with a max charging rate of 60kW. That does not leave a lot of room to better than the Bolt for long distance driving. It would no surprise me if the base 3 will eventually go the Model S40 way : produce some and then can it as soon as your larger models get traction.

The key charge rate is miles per minute. The model three kills the bolt In this metric. 130 to 170 mi in 30 min. vs 90 mi in 30 min. for the Bolt ( if you pay an extra 750 over the base price which is already 2500 above the M3).

Edit: I just realized the difference is more dramatic than I stated. Because of the aerodynamics, the model three will have even more advantage in highway driving where the charging speed matters most.

 

[MXWing]

My estimated delivery for a first production car is October-December 2017. My best estimate would put me at about reservation number 100,000 factoring in employees and Tesla owners in front of me.

I buy more stock if I get my car in December.

I take a HELOC on the home if I get my car in October.

 

[graphite]

For those trying to reconcile 500k+ reservations with new reservations being delivered at the end of 2018, correct me if I'm wrong, but aren't those reservations split among multiple "buckets" - North America, Overseas, Right-Hand Drive. A new North American reservation now might deliver before the first right-hand drive model. Do we have an idea how the the reservations are distributed between markets?

 

[D-egg-O]

ok VA... you were arguing with us for 100k+ last spring... so how about we hold Elon to this graph this time instead of conveniently forget the past...

View attachment 238463

you see what I did there?... I drew lines at the significant months at the mid-point of what is roughly the avg weekly rate for the month. To me it looks like:

Aug: nothing
Sep: nothing (maybe 400)
Oct: avg: ~1.25k/wk -- total: 5k
Nov: avg: ~2.5k/wk -- total: 10k
Dec: avg: ~4.5k/wk -- total: 18k

or a total of 33k in 2017... just like you said. but here's the thing(s):

A) this graph is BS... Elon is supposed to be an engineer?... then you don't put a Y-axis on a graph without multiple reference points while also not stating whether or not it's linear.

B) why does this S-curve start plateauing in Dec?... should the S-curve be MUCH larger extending well into 2018/19 before it plateaus?... to me this looks like something they just whipped up really quick to keep the speculation of 2017 deliveries alive.

my expectation for 2017 is 10k or less.

This post is a perfect example of how you wee little mind works. If you actually had critical thinking skills you could deduce this is the production ramp curve for the Model 3 production line in the Fremont factory only.

 

[Snapdragon III]

For those trying to reconcile 500k+ reservations with new reservations being delivered at the end of 2018, correct me if I'm wrong, but aren't those reservations split among multiple "buckets" - North America, Overseas, Right-Hand Drive. A new North American reservation now might deliver before the first right-hand drive model. Do we have an idea how the the reservations are distributed between markets?

I think you are right. I got excited when I heard they had over 500k reservations, and if you reserved one today you would get it by the end of 2018. As others, including you, have pointed out, the latter statement only applies for orders in the United states, which is only a percentage of the 500k reservations.

 

[GoTslaGo]

IMHO, attempts to compare the Chevy Bolt to the Model 3 is the usual ICE maker auto trap. They want you to always compare the EVs to the EVs... so they can keep them gimped and barely usable. That's why the Bolt is such a stand out car, from the ICE maker's perspective. It beats the pants off of other ICE EVs.

The Model 3 is not competing against other EVs. It's competing against the ICEs.

What we are seeing now is a build out of EV fleet options from the low end to the high end. Used Leafs at the bottom, Teslas at the top. This will eventually entirely replace the ICE fleet. Whether other automakers can continue to provide viable competition to build out the fleet is debatable.

Interesting times.

 

[myusername]

Worldwide, the 3-Series and C-Class market was around 900k units total for 2016. Throw in another 340k worldwide for the Audi A4.

In just the US market, figure 90-100k Lexus ES and IS sales, 50k for Acura TLX and ILX, 20k for Infinity Q50. Then there are the more upmarket mainstream midsize sedans that sell for $26,000-$36,000. Honda sells about 30k/month of these in the US alone (though some are base models, most are at least EX trim). On a TCO basis the Model 3 could be price competitive with nicer mid-sizers.

My point in all of this is that Tesla has a large addressable market with Model 3. If Tesla can take a large % of this market, while using economies of scale and advanced manufacturing to bring costs down, there could be a path to future profits that justify a higher share price. Like all growth stocks, this is a bet. People like you want certainty, which is unfortunately not an aspect of companies like Tesla. Invest elsewhere. TSLA is clearly beyond your risk tolerance.

I agree... it's a large addressable market... but it's not 10m/yr... what does the current share price mean if the M3 does nothing more than eat some portion of a 3-series and C-class market? that amount of growth is already priced into the SP... to pay $300+ today for this stock means there's some sort of clear path to a much larger market in a reasonable amount of time.

 

[EnzoXYZ]

It's funny - with all the talk in the aftermath of the initial event there was tons of hype about a "mindblowing" second reveal, super next level, will be tons of reservations afterwards, etc. Instead, we get about the lowest key event ever.

What happened?

2 things I think: Model X and insane demand beyond their expectations. The first event was in the throes of Model X production hell and it soon became apparent that new features should be in later versions of new cars to help the ramp. Thus, no spaceship interior, HUD, etc.

The 3 demand was also crazy even with the minimal reveal. Reality set in that it made no sense to push sales on this car as it will sell itself. As Elon always says, what's the point in selling 2019 and 2020 production slots for the 3 now? All that does is delay an interested buyer's purchase for a couple years when they could instead get in a CPO S/X or step up to a new one.

Hence the S/X campaign and the constant talking down of the 3. Demand is never going to be a problem for Tesla, production is. When you have limited production capacity you talk up the high margin cars. Elon is a smart dude.

All eyes on September now. I can't wait to see what happens with the Semi.

Mind blown is delivering the car in 7/17 when it was JUST revealed in 3/16.

 

[anticitizen13.7]

I agree... it's a large addressable market... but it's not 10m/yr... what does the current share price mean if the M3 does nothing more than eat some portion of a 3-series and C-class market? that amount of growth is already priced into the SP... to pay $300+ today for this stock means there's some sort of clear path to a much larger market in a reasonable amount of time.

I have never claimed Tesla would sell 10M units/year. Frankly I have no idea why you attribute this to me.

My most optimistic projections have been 1M units by 2020 and 2M units by 2022-2023. I have also outlined many risk factors such as poor macro conditions, natural disasters that disrupt supply chain, and loss of key personnel. Risk is high but for the small amount I invested I simply do not care.

 

[myusername]

IMHO, attempts to compare the Chevy Bolt to the Model 3 is the usual ICE maker auto trap. They want you to always compare the EVs to the EVs... so they can keep them gimped and barely usable. That's why the Bolt is such a stand out car, from the ICE maker's perspective. It beats the pants off of other ICE EVs.

The Model 3 is not competing against other EVs. It's competing against the ICEs.

What we are seeing now is a build out of EV fleet options from the low end to the high end. Used Leafs at the bottom, Teslas at the top. This will eventually entirely replace the ICE fleet. Whether other automakers can continue to provide viable competition to build out the fleet is debatable.

Interesting times.

then why isn't the Bolt doing the same thing?

Tale of the Tape: Tesla Model 3 vs. Chevrolet Bolt EV

EDIT: And I can tell you right now... nobody in Colorado (in their right mind) is going to buy a high-torque rear wheel drive M3... the Bolt is front wheel drive.