Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Chunky Jr.]

The Model 3 Tracker will remain a work in progress for now. After five quarters of producing cars, however, it may have passed its peak usefulness.

Bloomberg - Are you a robot?

Sounds like the tracker may be on its last legs.

 

[TheGrimSweeper]

I feel like Tesla could literally just take user posted videos on Youtube and Instagram and have years worth of marketing and advertising.

Videos like this would make great commercials.

 

[NicoV]

From all the analyst reactions out there, I like this one the best:

Toni Sacconaghi, at Bernstein, reiterated a Market Perform rating and a $325 price target.

“We believe that Tesla should have raised capital in the second half of 2019 and eschewed near-profitability to press its first-mover advantage and grow as quickly as possible in 2019 and 2020,” Sacconaghi wrote. “It is now in the uncomfortable position of likely needing to raise capital from a position of relative weakness.”

It’s all in hindsight but it would have made more sense to double down investments to grow faster with multiple new GF plans. Now we are seeing the production and delivery problems, signs of Fremont to simply not able to produce more. It is slowing the company down and giving the competition a chance to catch up.

Hopes of total dominance of the EV market (and $1000+ share price in a few years) have been dealt a big blow today. I do no longer see a chance of us reaching $400 any time soon, and will have to adjust my own expectations and rethink my investment in TSLA all together, unfortunately.

The way I see it, Tesla chose not to raise capital in order to avoid diluting the current shareholders, and chose to suffer the consequences of that. So far, the only consequence I see is that they could have sold max 10K cars more this quarter by not stepping on then production brake. And it’s not clear they actually did that, it is possible that the various product mix changes caused the lower production.
Nothing changed long term. Today I gave my insurance agent a test ride, as I’m his first customer with a Model 3 (and also his first customer with a Model S). He basically said that he saw no competiton for Tesla. He said he felt sorry for his first i-pace customer. Then I showed him how he could analyse the charge times for different EVs with abetterrouteplanner and he felt even more sorry for his first i-pace customer.
BTW: he already knew that the i-pace takes 30 hours to get fully charged at home. That is not good for the i-pace demand.
BTW2: I show abetterrouteplanner to everybody who mentions interest in a non-Tesla EV, and let them analyse the archetypical (for our region) holiday destination of south of France and the charging times for the different brands and models. That quantifies the advantages Tesla has over the competition, and invalidates the claims they hear from Jaguar and Audi that they’re as good as Tesla.
BTW3: He actually found the Model 3 inexpensive for what you get.
BTW4: I also discussed Model 3 with a guy from a very eco-conscious family (prius owner and vegatarian and such). His only concern was the availability of a cheap enough Tesla (SR was ok) and the timing of his purchase.
In short: there is no demand problem. In Europe, hundreds of thousands of people have already decided that their next car will be a Tesla, their purchase is just a matter of time.

 

[EVNow]

Yesterday on Q101.9 The Mix's morning show "Eric in the morning", which is the most listened to radio show in Chicago, Eric said "every day I see stories about Tesla's catching on fire." Complete FUD. Like I never see those stories and I follow a lot of Tesla news.

Yes - it is important to counter FUD. Tesla needs a real PR team.

A good example is the "swift boat" ads against Kerry. Kerry didn't respond thinking it will just give credibility to an obvious smear. He figured out he has to respond to the FUD - but turned out to be too late.

ps : Now campaigns have quick response teams that respond within an hour of any such FUD and sometime even have a counter ad on air within hours.

 

[anthonyj]

At a minimum, Tesla should be funding brand perception research. They start with a very strong brand, but there is a pack of dogs out there working to poison brand perception. I think they would see that there are a set of negative messages out there that are currently undermining the brand. This can accumulate for years and decades. Once Tesla begins to measure and track these things, they will likely find that there are many different ways (including product feature development, PR and advertising) that can move the needle on these metrics in a cost effective manner.

For example, a persistent message against Tesla has been that EVs use dirty power, "coal powered cars." In the past, Tesla has posted information about how little CO2 is emitted based on geography. That's a good start. But there is a more compelling message that can be delivered via advertising about how quickly CO2 emission per mile are coming down each year. Your Tesla is amplifying the climate saving value of adding solar and wind to the power grid. Or for a product feature idea: consider carbon-defeat adaptive charging. Tesla can program your car to charge when your utility is delivering the most clean energy. Some code and local grid emissions data stream can suffice to optimize your charging session for least emissions. Such a product feature would also generate PR and positive media. I think it could help shift public perception away from the "coal car" nonsense. It actually empowers customers to defeat carbon emissions just by plugging in whenever they park. I also think it would be relatively cheap for Tesla to deliver this.

Outside of well-to-do environmentalists in California, the mainstream buyer isn’t influenced by the environmental benefits of an electric car. They want a practical, low maintenance car, high in tech and fun to drive. That is what the Model 3 is, and the mainstream doesn’t know this.

If Tesla educates the consumer solely on its environmental benefits, the consumer will say “well I want to be able to get to work without waiting to charge for two hours, or have the car set on fire like CNN, Fox, NBC reports daily” which we know is not true. Tesla needs to make fun of other crappy cars like what Apple did with Mac vs PC (for the record I am a Windows user and custom PC builder, but I can see how those ads were effective!)

 

[jhm]

There is no sense spending money to advertise a product and create demand you can't meet.

I would disagree with this. Azaz was specifically referring to brand marketing. It is of long-term strategic value to cultivate and defend the Tesla brand. Not all advertising is about short term demand response, but if we look at the ebb and flow of demand over the whole year, there are definitely times like Q1 Model S/X deliveries when a little advertising pulse to boost net order rates would be beneficial.

 

[anthonyj]

I feel like Tesla could literally just take user posted videos on Youtube and Instagram and have years worth of marketing and advertising.

Videos like this would make great commercials.

Tesla actually made that video but took it down, I guess because Sesame Street got angwy that a bankwupt company wouldn’t let Cookie Monster have his cookies

 

[wnorris]

I’m being overly dramatic. Lately Elon announcements have been underwhelming

Fortunately this event will feature more than just Elon. Appears someone is noticing that rolling with just Elon is not working out well for Tesla of late.

"Investors will also hear directly from Elon Musk, as well as VP of Engineering, Stuart Bowers, VP of Hardware Engineering, Pete Bannon, and Sr. Director of AI, Andrej Karpathy. "

 

[azaz]

Outside of well-to-do environmentalists in California, the mainstream buyer isn’t influenced by the environmental benefits of an electric car. They want a practical, low maintenance car, high in tech and fun to drive. That is what the Model 3 is, and the mainstream doesn’t know this.

If Tesla educates the consumer solely on its environmental benefits, the consumer will say “well I want to be able to get to work without waiting to charge for two hours, or have the car set on fire like CNN, Fox, NBC reports daily” which we know is not true. Tesla needs to make fun of other crappy cars like what Apple did with Mac vs PC (for the record I am a Windows user and custom PC builder, but I can see how those ads were effective!)

The cars sell themselves once consumers actually view Tesla as an option and go to their local store or whatever to try it out. What I see as the big cliff is making more people realize that Tesla is a legitamite option for them. That there are charging stations for road trips, 220+ mile range etc etc.

If Tesla can just focus on broadening the base of people being willing to consider a Tesla they will have no issue selling the cars because the product was, is and remains top of class.

 

[2virgule5]

Meanwhile, the next in-line-Tesla-Killer Audi e-Tron gets an official EPA range of 204 miles...

 

[lklundin]

Not sure you can get 10% from motor/electronics.

In addition to the (possibly less than) 10% gain in performance, replacing motor/electronics parts of the Model S/X with that of the Model 3 should increase profit margins and free up capacity at Fremont.

 

[Drax7]

Meanwhile, the next in-line-Tesla-Killer Audi e-Tron gets an official EPA range of 204 miles...

On a sunny day that’s about 175 miles

 

[2virgule5]

The cars sell themselves once consumers actually view Tesla as an option and go to their local store or whatever to try it out. What I see as the big cliff is making more people realize that Tesla is a legitamite option for them. That there are charging stations for road trips, 220+ mile range etc etc.

If Tesla can just focus on broadening the base of people being willing to consider a Tesla they will have no issue selling the cars because the product was, is and remains top of class.

We can all agree here. If word of mouth becomes insufficient we need to bring more people to consider Tesla given how superior the product is. The question is did we reach that point or was Q1 another seasonal fluke?

 

[oneday]

OT

Yesterday on Q101.9 The Mix's morning show "Eric in the morning", which is the most listened to radio show in Chicago, Eric said "every day I see stories about Tesla's catching on fire." Complete FUD. Like I never see those stories and I follow a lot of Tesla news.

Another anecdotal example. On Monday, the wife of the general engineering contractor I hired came by my commercial building. Not sure how we ended up talking cars, but she said she wanted to buy a fast car. That she loves the feeling of fast acceleration. I told her, there is no car on the market that can match a Tesla when it comes to acceleration. She responded, “They catch on fire all the time, I don’t want one of those.” It’s sad, the FUD works, is working, and will continue to work. I told her, that she was the victim of a misinformation campaign and that statistically Tesla cars are much less likely to catch fire.

 

[ZachF]

Outside of well-to-do environmentalists in California, the mainstream buyer isn’t influenced by the environmental benefits of an electric car. They want a practical, low maintenance car, high in tech and fun to drive. That is what the Model 3 is, and the mainstream doesn’t know this.

If Tesla educates the consumer solely on its environmental benefits, the consumer will say “well I want to be able to get to work without waiting to charge for two hours, or have the car set on fire like CNN, Fox, NBC reports daily” which we know is not true. Tesla needs to make fun of other crappy cars like what Apple did with Mac vs PC (for the record I am a Windows user and custom PC builder, but I can see how those ads were effective!)

ya...

Like an ad of a mother, in a Tesla S or X, frustrated with her busy schedule picking up her kids and a bunch of groceries. At a stoplight a chode/douchey looking guy revving his Ferrari/Lamborghini pulls up. The mother puts on a smile, then when the light turns green leaves him in the dust. The kids in the back, are laughing and giggling, and one of them says "Mom, gas cars are so loud and lame!!"

 

[MP3Mike]

That's good work by those networks. We should work on getting adapters placed at those locations (esp. when 3-compatibility is rolled out) so any Tesla can utilize them, not just Teslas with a CHAdeMO adapter in their frunk.
Unrealistic you say? Here's one I placed in New Orleans that fills a need until there's a SC there. I scouted out where there was a need, talked to the management. I have never even used it. It stays at the station, like a good adapter should.
I'll get it updated when there's an update to cover M3. I don't want anyone to roll up to Rouses in a 3 counting on a DCFC and not be able to DCFC.

Maybe you have missed two rumors that have been going around:

1. The CCS adapter will have to be paired to the car. (So no sharing of adapters.)
2. Tesla isn't going to make the CHAdeMO compatible with the Model 3, they are putting their effort into the CCS adapter that will be able to charge much faster.

The first rumor came from a really good source, I am less confident in the second rumor, but it does make sense as the CCS network is expanding much faster than the CHAdeMO network.

 

[ZsoZso]

Outlook:

Long term, everything will be fine, Tesla will still dominate the EV market, thus be #1 automaker
The rest of this year and even the next year, does not "long term" make
This quarter breaks both the crazy growth story (S curve not supposed to go negative) and the sequence of profitable quarters

As a consequence, it will be much harder to get rid of the shorts, so volatility will rule for long while. We had single profitable quarters before (2013, 2016), so shorts did not care about 2018Q3. After Q4, some may have been shaking, but most held on. Now, with this dip, they will say, oh 2 profitable Qs mean nothing, so even 3 will not be a big difference. So Tesla needs at least 4 very strong quarters in a row to make shorts blink. With gigafactory buildups + capex for Model Y coming up, I don't think the next 4 quarters have a chance to be all strong profit.

So we have a long road ahead, buckle up because its gonna be bumpy!

 

[KarenRei]

OT
Another anecdotal example. On Monday, the wife of the general engineering contractor I hired came by my commercial building. Not sure how we ended up talking cars, but she said she wanted to buy a fast car. That she loves the feeling of fast acceleration. I told her, there is no car on the market that can match a Tesla when it comes to acceleration. She responded, “They catch on fire all the time, I don’t want one of those.” It’s sad, the FUD works, is working, and will continue to work. I told her, that she was the victim of a misinformation campaign and that statistically Tesla cars are much less likely to catch fire.

And that's how people learn. If she doubts you, she may end up googling the statistics, wherein she'll find that you're correct.

She might just be closed-minded to EVs and have latched onto that as an excuse, of course. Wherein she'll never change her mind. But people with a genuine interest in EVs will check the numbers.

(I like to mention to ICE drivers that they're sitting beside a big tank of gasoline, a fuel specifically chosen for its ease of ignition and high energy content, which contains no fire suppression system and is plumbed up to a hot engine block)

 

[Nocturnal]

Elon was in a good mood at least. But I think it's hard to be overwhelmed with a car that's almost exactly a scaled-up Model 3, with pricing and stats precisely what you'd expect.

Thing is, they showed one side of the car for like 3 minutes and then the webcast was over... it was kind of disappointing. I did order one though

I LOVE my 3 but I think the Y is an overall better looking car. The dimensions resolve some of the issues I have with the 3's design. Plus no "Hi, I'm driving a 30k boring sedan" chrome trim.

And that's how people learn. If she doubts you, she may end up googling the statistics, wherein she'll find that you're correct.

She might just be closed-minded to EVs and have latched onto that as an excuse, of course. Wherein she'll never change her mind. But people with a genuine interest in EVs will check the numbers.

(I like to mention to ICE drivers that they're sitting beside a big tank of gasoline, a fuel specifically chosen for its ease of ignition and high energy content, which contains no fire suppression system and is plumbed up to a hot engine block)

Getting to the real objection. Another guy on FB mentioned his mom used the "I don't want to bother plugging it in" as the reason she didn't want a Tesla. No, that's just the excuse to make the conversation end. The real reasoning is problem fear of the unknown and few of us will ever admit that we are afraid or intimidated by a new technology.

 

[KarenRei]

This quarter breaks both the crazy growth story (S curve not supposed to go negative) and the sequence of profitable quarters

It's happened plenty of times.