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I agree with you, but if there's one thing I realized in my investing career is that the vast majority of investors are risk-averse and want to see tangible evidence before putting their monies on the line, instead of taking management guidance at face value. This is true for all companies.
What has been surprising to me is the level at which investors are discounting EM's projections. The discount rate is extremely high. Not a single sell-side analyst expects Tesla to achieve its stated goal of 500,000 deliveries in 2018. Not a single one.
I think investors' skepticism has "super-exponentially" grown with respect to Tesla, because of repeated over-promises and under-deliveries. I wish this was not the case, but this is my best educated guess of why TSLA is still at $300. Investors will just need to sit on their hands.
Really? Do you recall the mountains of scorn that were heaped on Adam Jonas on this forum when the former darling analyst of TMC announced a piddling few thousand M3s before end of 2017?What has been surprising to me is the level at which investors are discounting EM's projections. The discount rate is extremely high. Not a single sell-side analyst expects Tesla to achieve its stated goal of 500,000 deliveries in 2018. Not a single one.
If you are referring Jeff Dahn, he makes some statements in his video that the challenge of mixing materials to produce the anode/cathode? maybe? is reaching a point where they are using half a dozen materials but its not getting that much better (they saw big gains using 3,4,5 materials), and that the number of combinations are extreme when you look at mixing 10 or more. And I don't believe this is something they can model virtually, they need to actually build the battery and test. This is done at the gigafactory as well, unbeknownst to many.Source?
It seems that I recall some videos by a guy who’s receiving money from Tesla to substantially increase the reliability of battery packs seems to think they’re making great progress.
Personally I think that with the specs revealed for the Roadster and Semi point to Tesla expecting a pretty substantial jump in capacity between now and late 2019. Fitting 200kWh into the roadster cant be a small feat without a decent improvement in battery energy density.
I think if you do the math, neither new project lends itself to the idea they have made great strides in battery technology over 6 months (beyond the 2160).
This is a truly shocking post. I have been reading on here for 4 years from literally every bull on this site, that the S and X don't matter, because it is all about the 3. And they said that because they were right. Not caring about the Model 3 ramp might be hazardous to your wealth.Several bearish analysts said it's all about Model 3. My view is different.
Great products (like Semi and Roadster) change the expectation of future cashflow, which changes today's valuation. As a long term investor, I care a lot about the valuation before I decide when to add more shares. Also, great products show the quality of the company, and affect what percentage I allocate to the stock.
Model 3 ramp indeed is important because it impacts cash position by a great deal. Bears say it's the only thing that matters because Tesla could run out of cash and bankrupt. That's the part I completely disagree.
Even I can tell Tesla is going to become a trillion dollar company based on future cashflow. I'm sure Elon knows that very well. Also consider the following: Tesla's mission; Elon's stock holding; Elon's view to debt that "debt should always be paid."; Tesla's capability to raise cash, etc,...... the view that Elon will let Tesla run out of cash and bankrupt is just ludicrous. Shorts spread this FUD so that longs will sell the shares, or at least stop buying. Elon will not let this company fail. Lots of shareholders will also not let this company fail.
That's why my approach is holding a lot, and add more if there is a big pullback. I don't care about the Model 3 ramp.
I think the prediction was a 500k *run rate* before end of 2018. So, deliveries will be far below that, say 250k. Maybe 2019 gets 500k deliveries.Really? Do you recall the mountains of scorn that were heaped on Adam Jonas on this forum when the former darling analyst of TMC announced a piddling few thousand M3s before end of 2017?
I am very curious how confident you are they will deliver 500k next year. Do you really think they will do it?
Ah, the familiar "rate" vs. actual production volume debate. I think it was actual production, but who knows. What does VA think it is referring to?I think the prediction was a 500k *run rate* before end of 2018. So, deliveries will be far below that, say 250k. Maybe 2019 gets 500k deliveries.
This is a truly shocking post. I have been reading on here for 4 years from literally every bull on this site, that the S and X don't matter, because it is all about the 3. And they said that because they were right. Not caring about the Model 3 ramp might be hazardous to your wealth.
Do you think Model 3 ramp is the only/major concern holding stock price? What production rate would alleviate that concern?This is a truly shocking post. I have been reading on here for 4 years from literally every bull on this site, that the S and X don't matter, because it is all about the 3. And they said that because they were right. Not caring about the Model 3 ramp might be hazardous to your wealth.
Given that people have come to expect less than perfect performance, I think if they are 3k per week by the end of Q1, people will start to settle down. If it is that rate or higher at the end of Q2, things will still be OK if the GM goes positive. That's just my two cents. I don't really know.Do you think Model 3 ramp is the only/major concern holding stock price? What production rate would alleviate that concern?
The problem is that this isn't necessarily true. Even if you back out all R&D, the company would still post an operating loss. Given the current (much improved but still relatively high) average waits for service, the service network is certainly not oversized for the S and X fleet, so there really isn't much proof that the S and X are profitable on their own. We aren't talking about cash burn here, we are talking about operating profits. The operation of the company, not including any investments into the future, does not turn a profit most quarters.It's all about model 3 because S/X are proven and would be profitable without massive investments that are currently purely model 3, storage and solar related.
Right you are, right you are.Minor thing the new cells are a 2170 format, not 2160.
What's the expected range of roadster production? 25,000 units? 35,000?
This is well within Tesla's proven capacity to scale.
The real bottom line is revenue and profit. That won't come with a ramp, it will come with large scale rapid production and sale of M3. Still not sure why market doubts tesla execution, after continuing to sell MS and MX, high priced widgets.Do you think Model 3 ramp is the only/major concern holding stock price? What production rate would alleviate that concern?
Oh, no... they definitely run out of money. The issue is how long will investors continue to give Tesla money to fund expansion. Tesla has not had an issue raising money at thus far since spring 2013. As long as the story is intact and the path to massive growth stays clear, then I don't think Tesla will have a problem raising money.
I agree with you, but if there's one thing I realized in my investing career is that the vast majority of investors are risk-averse and want to see tangible evidence before putting their monies on the line, instead of taking management guidance at face value. This is true for all companies.
What has been surprising to me is the level at which investors are discounting EM's projections. The discount rate is extremely high. Not a single sell-side analyst expects Tesla to achieve its stated goal of 500,000 deliveries in 2018. Not a single one.
I think investors' skepticism has "super-exponentially" grown with respect to Tesla, because of repeated over-promises and under-deliveries. I wish this was not the case, but this is my best educated guess of why TSLA is still at $300. Investors will just need to sit on their hands.
I agree, with bear sentimebts. TSLA dropped the ball on model 3 manufacturing like they did on X. My guess is because of doing too many things at once.
If the rumoured high speed welding of the battery pack is the cause, then the fault is purely on them again. it is a releatively easy thing to do and there should be lots of people who are extremely knowledgeable on this in the USA. So I am scratching my head and wondering if this is actually the cause.
My guess is that leaked middle manager complaint was true. Too much hubris on the upper management who are too proud to seek outside help, esprcially from traditional tech ppl.