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

[Nocturnal]

Sure looks like auto execs are losing the plot. BMW and Apple? Really? (edit, poor Toyota lol)

Amid those concerns, KPMG reports automotive executives are less bullish about the prevalence of all-electric vehicles in the U.S. and globally by 2030. Estimates of new vehicles sold being EVs by then globally ranged from 10% to 40% in this year’s survey, down from 20% to 70% a year earlier.

For the U.S., the median expectation for EV sales was 35% of the new vehicle market — down from 65% a year earlier and significantly lower than the Biden administration’s 50% goal by 2030 that was announced late last year.

Or perhaps now that the ship shortage is gone and can no longer be blamed for their lack of EV offerings, this will be the new excuse. "Oh it's because of interest rates and inflation."

 

[The Accountant]

Wow - will these dilute our stock?

It shouldn't.
When earnings per share (EPS) is computed, the share count used includes these 304m shares.
When you see the term "Full Diluted' EPS, it means it is taking all shares & options that would be dilutive to earnings.
As an example, the EPS in Q3 was

GAAP EPS - Basic $1.05
GAAP EPS - Fully Diluted $0.95 (includes Elon's and other's options)

It's the $0.95 that you will see on Yahoo for example.

Also, when analysts value a stock using Discounted Cash Flows, they use the fully diluted share count to determine price/share target.

 

[Mengy]

China weekly insured numbers: 10,254

https://twitter.com/x/status/1605141222313857024

So is Shanghai exporting more cars than usual, or are China sales really not ramping up? Because I'd expect them to sell a lot more cars in Q4 than in Q3 China given the production ramps, yet the sales trend (based on these insurance numbers) seems to be about the same number of China domestic total sales for Q3 / Q4?

Or am I missing something?

 

[elasalle]

Will these be seems as under what expected? The comments in this Twitter feed are not interesting to read

Bummer.

If we add Week 40-50, (4Q) we are at 107.9K, so they are trending towards Troy's estimations(126K)it seems.

reported numbers could be slightly lower and need adjustment (+1-2%) in final tally.

2 more weeks to go.

+This might already be baked in to the SP, which is already low

++
as far as we know, there are no exports in Dec. some at very end of Nov. WaWa has latest of some activity in docks but no ships.
the other recently announced discounts didn't seem to help
Shenzen has a new till end of year deal,

 

[elasalle]

I’m not convinced yet that these $3750 discounts and supercharger promotions are due to the IRA, or at least not solely due to it.

1) This is not the first time Tesla has offered end-of-quarter promotional discounts, which indicates Tesla has in the past had non-IRA reasons for doing so. Many consumer products companies offer occasional limited-time promotions. One typical reason why this is done is price discrimination between price-insensitive buyers and deal-hunting shoppers who are willing to wait. Another common reason is building goodwill with customers by appearing to be more generous, which can be a better long-term strategy than always charging the highest price the market will bear.

2) The $3750 discount covers M3 too, and the 10k miles of free supercharging (worth about $1k) comes with any Tesla vehicle delivered in the US in December including S&X. The S,X, 3P and 3LR are all priced above the credit eligibility MSRP limits, and the 3 RWD is made with battery cells imported from China that most likely are going to fail either the North American sourcing requirement for the battery components or the critical minerals or potentially both, leaving it too with no credit eligibility. With Ys likely to be the only Teslas eligible for the $7500 credits, why give discounts on the other models? Maybe because some customers mistakenly think the other models will be eligible but I think Tesla could clear that up with announcements on social media and notes on the US tesla.com order pages for 3/S/X rather than just solving the problem with substantial discounts.

3) Tesla might be resuming the traditional end-of-quarter delivery wave/inventory dump, at least for inventory that is currently sitting in delivery centers within the American domestic market. A decisive, blowout Q4 might crush the TSLA bears hammering the stock lately, and Elon has clearly expressed his disdain for manipulative shortsellers numerous times in the past. There also seems to be a lot of weight still given to coming close to the arbitrary 50% deliveries growth target. The American domestic market is not limited by access to transoceanic ships in the way Shanghai exports are limited. Limited shipping capacity was the primary reason Tesla gave for why so much inventory had built up in Q3. On the other hand, then I'd wonder why Canada and Mexico aren't also receiving similar discounts when they too can be served by truck transport from Fremont.

Thoughts?

simple thoughts ...
Surely, EOQ discounts are to clear up as much inventory as possible.
Some of the inventory buildup has to be attributed to IRA (the more people follow Tesla, EV, the more aware of the IRA discounts they are), other possibilities - recession worries and interest rate on the loans, etc ...
However, price increases last year need to be factored in before considering discounts, so net margin could still be above prior numbers....

Maybe they can throw in some software based discounts like free auto-pilot/FSD for a year etc as well ... cheers!!

 

[ZeApelido]

I only have $6.5b in Energy revenues in my 2023 model, I will be taking this number up. Let's see what Q4 shows us.

Carebear.

 

[Singuy]

So is Shanghai exporting more cars than usual, or are China sales really not ramping up? Because I'd expect them to sell a lot more cars in Q4 than in Q3 China given the production ramps, yet the sales trend (based on these insurance numbers) seems to be about the same number of China domestic total sales for Q3 / Q4?

Or am I missing something?

We will see what the last 2 weeks look like. Maybe there's a mini delivery wave in which many parts of china didn't get their shipment of cars due to NOV exports.

Also seems like Shanghai is phasing out green energy plates for PHEV on Jan 1st, resulting in a surge of demand for them.

 

[Speedr117]

So is Shanghai exporting more cars than usual, or are China sales really not ramping up? Because I'd expect them to sell a lot more cars in Q4 than in Q3 China given the production ramps, yet the sales trend (based on these insurance numbers) seems to be about the same number of China domestic total sales for Q3 / Q4?

Or am I missing something?

COVID!

 

[Singuy]

So the thing with China is complicated.

The demand for cars is country controlled. NEV plates are free, but has a quota. For example Beijing the city released 70k for year 2022. So as competitors ramp up production, you are in a situation of being demand controlled because everyone is fighting for those plates. There are 500k registration for plates in Beijing with only 100k plates release total for the year(30k ICE, 70K NEV). So it's not an overall demand thing but it's a matter of which competitor can fight for those precious plates thing.

 

[Singuy]

COVID!

Well BYD weekly insured units was 50k, increasing from last week. We can't chalk it up to Covid.

 

[Speedr117]

Well BYD weekly insured units was 50k, increasing from last week. We can't chalk it up to Covid.

Fair, but they have more flexibility than Tesla on pricing (i.e. they can blow out cars at their dealerships without sending the press into a frenzy due to demand issues).

 

[willow_hiller]

Maybe they can throw in some software based discounts like free auto-pilot/FSD for a year etc as well ... cheers!!

The fact that they haven't done this yet is very interesting to me. Especially coupled with that FCC confidentiality extension, it makes me think we'll see some big FSD hardware announcements come mid-January.

Almost all of Tesla's inventory had FSD included as recently as last quarter. But for the vehicles within 200 miles of my zipcode I'm now seeing:

• 32 New Model S (0 EAP, 0 FSD)
• 11 Used Model S (4 EAP, 6 FSD)
• 34 New Model 3 (2 EAP, 0 FSD)
• 32 Used Model 3 (13 EAP, 7 FSD)
• 8 New Model X (0 EAP, 0 FSD)
• 22 Used Model X (8 EAP, 14 FSD)
• 54 New Model Y (8 EAP, 0 FSD)
• 31 Used Model Y (1 EAP, 30 FSD)

So out of 128 new vehicles, not a single one is being sold with FSD included. My best guess as to why would be that there will be a new FSD hardware announcement and a retrofit for those that have purchased FSD. That being said, they haven't removed FSD from the used vehicles.

 

[elasalle]

No morning is worse than seeing SP down and GOJO's smiling face of CNBS saying demand problemo

 

[Nocturnal]

+This might already be baked in to the SP, which is already low

I'm no longer that optimistic.

 

[OrthoSurg]

No morning is worse than seeing SP down and GOJO's smiling face of CNBS saying demand problemo

Well yesterday we were up +5% premarket en closed red so I prefer to start red premarket now maybe the opposite will happen since everyone will be buying puts at market open so Market makers might turn things around since we learned over the years that nothing is rational about the stock market, well, in the short term.

 

[Discoducky]

Carsonight agrees, cites CATL 90 GWh battery supply supporting TE

https://twitter.com/x/status/1605081134391447552

Prismatic powerwalls? How definite is this?

 

[y_naught]

I’m not convinced yet that these $3750 discounts and supercharger promotions are due to the IRA, or at least not solely due to it.

1) This is not the first time Tesla has offered end-of-quarter promotional discounts, which indicates Tesla has in the past had non-IRA reasons for doing so. Many consumer products companies offer occasional limited-time promotions. One typical reason why this is done is price discrimination between price-insensitive buyers and deal-hunting shoppers who are willing to wait. Another common reason is building goodwill with customers by appearing to be more generous, which can be a better long-term strategy than always charging the highest price the market will bear.

2) The $3750 discount covers M3 too, and the 10k miles of free supercharging (worth about $1k) comes with any Tesla vehicle delivered in the US in December including S&X. The S,X, 3P and 3LR are all priced above the credit eligibility MSRP limits, and the 3 RWD is made with battery cells imported from China that most likely are going to fail either the North American sourcing requirement for the battery components or the critical minerals or potentially both, leaving it too with no credit eligibility. With Ys likely to be the only Teslas eligible for the $7500 credits, why give discounts on the other models? Maybe because some customers mistakenly think the other models will be eligible but I think Tesla could clear that up with announcements on social media and notes on the US tesla.com order pages for 3/S/X rather than just solving the problem with substantial discounts.

3) Tesla might be resuming the traditional end-of-quarter delivery wave/inventory dump, at least for inventory that is currently sitting in delivery centers within the American domestic market. A decisive, blowout Q4 might crush the TSLA bears hammering the stock lately, and Elon has clearly expressed his disdain for manipulative shortsellers numerous times in the past. There also seems to be a lot of weight still given to coming close to the arbitrary 50% deliveries growth target. The American domestic market is not limited by access to transoceanic ships in the way Shanghai exports are limited. Limited shipping capacity was the primary reason Tesla gave for why so much inventory had built up in Q3. On the other hand, then I'd wonder why Canada and Mexico aren't also receiving similar discounts when they too can be served by truck transport from Fremont.

Thoughts?

I think it may be IRA related if Tesla is planning to change (lower) pricing to meet the requirements for more cars. You would t want to feel like a sucker for buying this year and then see the price get lowered. But they don’t want to lower the price now officially, because people will wait anyway to get both discounts.

 

[Discoducky]

Also seems like Shanghai is phasing out green energy plates for PHEV on Jan 1st, resulting in a surge of demand for them.

and New BEV discounts start Jan 1st and EOQ wave/surge is ending.

 

[Garlands]

and New BEV discounts start Jan 1st and EOQ wave/surge is ending.

Are you sure new BEV discounts starting on Jan 1? i thought they were ending this year?

 

[2daMoon]

Finding something to do with your time that makes you feel good may be a more therapeutic way to spend this Monday.

For me, building mtb trail in the cold and wet seems preferable to watching the SP this morning. I'm getting away from the computer and encourage others to do so.

I'll catch up on TMC some time after the closing bell rings.

Happy HODLidays