General Discussion: 2018 Investor Roundtable

[Reciprocity]

Tesla agrees to partially reimburse people who bought Autopilot 2.0 in $5 million settlement of class action lawsuit



$20-$280? Even the high end seems rather low considering what was delivered compared to what was implied.

It's probably something like.. $4000 option on a $100,000 car is 4% x some percentage of complete over the year x the average payment over the year. So roughly 2% of the average payment x 12. $1200 x .02 x 12 = 288.

 

[hacer]

Even more obvious if you go to their page. There is an asterisk on the Tesla numbers, and the footnote is:View attachment 298141
So, Yes, they adjust the numbers at the end of quarter to match the reported number from Tesla.

And the monthly numbers are always significantly higher in the last month when the adjustment happens. This means they are consistently underestimating monthly Tesla sales when they have to estimate them.

 

[Waiting4M3]

I think shorts understand Tesla's CapEx very well. It's a key part of the bear argument.

Their Q4 letter said they expected higher CapEx in 2018 than 2017. Tesla's CFO said "way more than 50%" of that would go to the Model 3 ramp.

So, reading into that: Tesla has 3.5B cash and they're expecting to spend more than 3.4B on CapEx. Roughly 2B of the 3.5B cash on hand going just to CapEx for the Model 3.

This is the central argument! Cash is king, and if Tesla can't start producing the Model 3 profitably and at scale soon, they're screwed. It's right there in the 10K.

It's probably why Tesla is switching to 24/7 production. They've looked into the future, they see they can't afford the CapEx, and so their solution is to increase capital utilization. It's desperate and stroke evidence of a cash crunch. It's why I'm confidently short heading into earnings.

Plans can obviously change, and Tesla may be able to recover from a Model 3 blunder.

The issue is that, when you take out that Model 3 CapEx and customer deposits, you're left with maybe 1B cash, much of which was planned for other business functions.

How are they going to scale the Semi AND invest in autonomous driving AND begin Model Y production AND create a Roadster line AND pay off their debts?



... The shorts point to this as the trigger for a supplier run. When they pay is different from a commitment to pay. These machines are ordered months in advance. They can't just tell suppliers "hey, that machine we ordered, we don't want it anymore."

It's pretty meaningless discussing Tesla's cash position without discussing how much cash they can generate from the M3. What is your projection on their 3Q and 4Q M3 production number, gross margin? Obviously you don't think it will be enough, so hypothetically, what would be a good M3 production rate/margin that would give enough cash?

 

[Jonathan Hewitt]

Ah, the old "If you can't beat them, sue them" strategy.

Tesla sued for more than $2 billion, accused of copying design of Nikola hydrogen trucks

 

[EinSV]

The settlement of the AP 2.0 class action lawsuit was announced today, subject to court approval ($5 million including attorneys' fees according to Electrek Tesla agrees to partially reimburse people who bought Autopilot 2.0 in $5 million settlement of class action lawsuit).

Nikola has now popped up with a design patent lawsuit over the Semi. Tesla sued for $2 billion by hydrogen truck startup over alleged patent infringement

The law firm that brought the suit does not list patent litigation as an area of expertise on their website. Practice - Beus Gilbert

Tesla said, "it’s patently obvious there is no merit to this lawsuit." And based on the way the complaint is written, it appears Nikola's lawyers don't understand the difference between a design patent and a regular (utility) patent.

Apparently Nikola realizes its about to get crushed by the Semi. This lawsuit looks more like a publicity stunt than anything else.

Edit: Mr. Hewitt beat me to the punch!

 

[elasalle]

The settlement of the AP 2.0 class action lawsuit was announced today, subject to court approval ($5 million including attorneys' fees according to Electrek Tesla agrees to partially reimburse people who bought Autopilot 2.0 in $5 million settlement of class action lawsuit).

Nikola has now popped up with a design patent lawsuit over the Semi. Tesla sued for $2 billion by hydrogen truck startup over alleged patent infringement

The law firm that brought the suit does not list patent litigation as an area of expertise on their website. Practice - Beus Gilbert

Tesla said, "it’s patently obvious there is no merit to this lawsuit." And based on the way the complaint is written, it appears Nikola's lawyers don't understand the difference between a design patent and a regular (utility) patent.

Apparently Nikola realizes its about to get crushed by the Semi. This lawsuit looks more like a publicity stunt than anything else.

Edit: Mr. Hewitt beat me to the punch!

Looks like Nikola needs monies to return reservation deposits.

 

[RobStark]

"Nikola said the introduction of Tesla’s truck has caused “confusion in the market” and hurt its ability to attract investors and partners, and the company is seeking damages “in excess of $2 billion” — roughly the jump in Tesla’s market cap after it unveiled the Semi."

No, naming your company "Nikola" causes confusion with Tesla in the marketplace.

And fighting physics is why you can't attract investors and partners.

 

[Curt Renz]

Ah, the old "If you can't beat them, sue them" strategy.

Tesla sued for more than $2 billion, accused of copying design of Nikola hydrogen trucks

Tesla could receive receive millions after countersuing against Nikola's frivolous lawsuit.

 

[mongo]

Ah, the old "If you can't beat them, sue them" strategy.

Tesla sued for more than $2 billion, accused of copying design of Nikola hydrogen trucks

What a load of hydrogen sulfide. You can't sue based on a provisional patent application, period. Even if it were a granted design patent, you can't sue for infringement when it hasn't been sold yet (and you have no direct damages). You also can't sue someone just for making a better product.

From this site:

Design patent infringement occurs when a company or person violates a design patent's terms. A design patent protects a manufactured product's ornamental features. To claim infringement, you must prove that an ordinary observer wouldn't be able to tell the difference between a patented object's design and an accused object's design when both designs are side by side.

As part of a unanimous decision, the U.S. Supreme Court justices overturned the earlier decision made in Apple's favor. The court's opinion stated that an award for damages for design patent infringement may be restricted to profits that a company can attribute to a part of an article of manufacture, not the entire product itself.

 

[Waiting4M3]

What a load of hydrogen sulfide. You can't sue based on a provisional patent application, period. Even if it were a granted design patent, you can't sue for infringement when it hasn't been sold yet (and you have no direct damages). You also can't sue someone just for making a better product.

From this site:

As if anyone will confuse a Tesla semi with a Nikola truck with the ugly grill

 

[BioSehnsucht]

Tesla could receive receive millions after countersuing against Nikola's frivolous lawsuit.

If they lose their suit against Tesla and they have refunded their reservations, what money are they going to fork over to Tesla?

 

[defc0n]

Oh Nikola you silly goose

 

[hobbes]

Found this on Franz von Holzhausen´s twitter: Popular Mechanics magazine awarded the Model 3 their Car of the Year: Best Cars 2018 | The 2018 Popular Mechanics Automotive Excellence Awards

And Tesla built a mass-market electric car that appeals not on piety but performance. It’s hard not to wonder if we’re at the apogee of driver enjoyment, the final years of automotive technology being directed toward the human behind the wheel, not the A.I. plotting course vectors to Walmart. That’s why this year’s awards celebrate the cars that make us happy to still be in the driver’s seat.

Tesla literally can’t build this thing fast enough. So the question to be answered, the only one that really matters, is whether the Model 3’s biggest problem is that too many people want one. Because that’s a dilemma that hasn’t existed since maybe 1964, when a million people wanted the new Mustang.

No, the Model 3 isn’t perfect. I’d like a heads-up display, some way to put the speedometer in my line of sight. And there are some places where you can see the cost-cutting, like in the rear trunk, where there’s no trim panel up top, just bare metal and cutouts for the air vent that makes the lid easier to close.

But I think I could live with such compromises. In fact, I know I can, because when I get home, I do something that I’ve never done with any of the other thousands of cars I’ve tested: I put down a deposit.

 

[schonelucht]

The settlement of the AP 2.0 class action lawsuit was announced today, subject to court approval ($5 million including attorneys' fees according to Electrek Tesla agrees to partially reimburse people who bought Autopilot 2.0 in $5 million settlement of class action lawsuit).

This is an excellent win for Tesla, but the Electrek article is a little bit more than naive.

 

[aubreymcfato]

Tesla sold 719 cars in Norway, almost 10x the 75 cars the sold in April 2017.
It even surpassed December 2016, that was the last month of the year...
Even if we account for the delay in March 2018 (Musk asked explicitly not tu rush deliveries) we got 1400+700 in two months, which is definitely not bad.
We'll see how May goes, but I expect a great Q2 in Norway (maybe few Model 3 as well?).
View attachment 298060

aaaand today we're already at 53 cars: incredible start of the month.

 

[vigleik]

History suggests Tesla’s cashflow situation is likely to improve this year:
https://arstechnica.com/tech-policy/2018/05/elon-musk-says-dont-worry-about-teslas-burn-rate-he-might-be-right/

 

[ValueAnalyst]

ValueAnalyst on Twitter: Tesla's used vehicle business is the immediate antidote to surging gas prices:

This is just the beginning: Oil Hedge Fund Manager Says $300 Oil ‘Not Impossible’

 

[elasalle]

ValueAnalyst on Twitter: Tesla's used vehicle business is the immediate antidote to surging gas prices:

View attachment 298275

This is just the beginning: Oil Hedge Fund Manager Says $300 Oil ‘Not Impossible’

How does oil get to 300, without a major spike in fracking?

 

[mongo]

How does oil get to 300, without a major spike in fracking?

swag:
Time lag. They won't start the higher cost extraction until the price is high enough, then they need to get all the people/ equipment in place and operating. At which point they set production to maximize profit.

 

[elasalle]

swag:
Time lag. They won't start the higher cost extraction until the price is high enough, then they need to get all the people/ equipment in place and operating. At which point they set production to maximize profit.

Even with that, last time around oil prices was in $100 range before it came crashing.

The Cost of Shale Oil Versus Conventional Oil
Some shale oil wells may have a break even point of $40 a barrel over their production life despite the higher drilling and fracking costs. However, many sources put the average break-even point for a fracked horizontal well above $60 a barrel with the higher-cost wells coming in at over $90 a barrel.

Also, lot of these wells are already built and in standby mode...