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

[traxila]

Can't wait to see how CNBC spins a 47% increase in production YoY and a 1 3/4 million annual run rate based on Q4 as a bad thing.

If this headline doesn't mean that all the big boys are in and that they want a rally from here for at least a bit then I dunno what it means. Nothing about missing expectations until the bottom of the article. Written by Lara no less.

Maybe it will change by tomorrow.

 

[Singuy]

Roughly 10% of a quarters production appears to be in transit. There are 13 weeks in a quarter. 10% would imply average transit time for a tesla in an ideal delivery cycle would be 1.3 weeks.

Does anyone know what the average transit time for a tesla sold is?

View attachment 891459

When I first looked at this graph, I was like "huh, so their ideal state is to have 50% of production in transit?". That's where that red line seems to be.

 

[Budding]

Just taking a step back, you're relying on...what a person that leads 100,000's of people says, in 140 characters or less at a time, on a platform that allows you real-time access to him (and who chooses to give you real time access to what he wants to say in 140 characters or less in the public)...

...for your personal financial decisions?

You mean we should not base decisions on what the CEO publicly says?

 

[NicoV]

Norway have zero deliveries today. Unlike the US today is not a holiday in most of Europe. Pretty sure it's not in Norway either so it does seem like they did deliver almost everything they had.

While lower than the two previous weeks they were still at over 200 deliveries the day before New Year which that late is much higher than most quarters. Without checking I would say it's been quite awhile since they had as many deliveries in the last week of a quarter.

So straight to zero the first day of 2023 seems to indicate there aren't that many unsold cars in Norway and they timed it perfectly. Of course there are some tax changes for 2023 that could mean the numbers will be low early on in Q1 no matter the availability.

We need more data to conclude that. E.g. avoigt reported on Twitter that his Plaid S couldn’t be delivered the last day of the year because the truck didn’t arrive on time and his new appointment was for a week later. Somebody mentioned 2900 cars in Zeebrugge last week. They delivered many hundreds in Belgium and The Netherlands but there may still be 2000 cars there.

 

[StealthP3D]

Frankly I think a lot of this has been priced in already.

EDIT: As vocally frustrated as I’ve been over the Twitter thing, I think it’s naive to think that our December performance wasn’t primarily about serious short term demand concerns.

Even people like me who have, for years, been one of the louder voices against the perspective that Tesla would run out of demand, fully acknowledged that the start of $7,500 tax incentives on Jan 1, 2023 would likely pull some of that demand out of Q4 and into Q1. But that's not a demand problem because the demand is still there.

In fact, I don't think there was one person who was dumb enough to say that the 2023 IRA tax incentives wouldn't make it harder to clear inventory as fully as in a normal quarter. But the demand did not go away, it was just moved forward.

C'mon people, these are not difficult concepts to process.

 

[mongo]

Roughly 10% of a quarters production appears to be in transit. There are 13 weeks in a quarter. 10% would imply average transit time for a tesla in an ideal delivery cycle would be 1.3 weeks.

Does anyone know what the average transit time for a tesla sold is?

View attachment 891459


Edit: Little more napkin math. If tesla is to grow so to will the number of cars in transit at the end of every quarter. It should have been a red flag from last quarter that expectations were that production and deliveries were so close together. We should be ready for at least 7% or 1 weeks of any given quarters production to be in transit moving forward. Obviously the previous quarters in transit vehicles will be sold in the current quarter but as tesla is constantly growing production volume it will always have more in transit the current quarter than the previous quarter.

When I first looked at this graph, I was like "huh, so their ideal state is to have 50% of production in transit?". That's where that red line seems to be.

Emphasis on "Hypothetical "

 

[TN Mtn Man]

I think those of you who are long term shareholders should be thinking more like long term shareholders. These numbers don’t matter long term. Really this recession is Tesla’s opportunity to take market share. That’s thinking like Silicon Valley and Tesla was born in Silicon Valley. Cut prices, keep earnings low, don’t worry about stock price which may still drop, gain market share…

Some of us like myself sold shares past few years and felt horrible when price went to 400. This is our chance to get those shares back at a discount.

Elon sold many shares which increased the float substantially so there is much more share supply and share price is not longer as resilient as it once was. Do you think Elon cares if share price goes to $75? Neither should you.

Think bigger, longer term, consider buying more with spare funds, and wait. This undoubtedly will be the longest game you’ll ever play. But economies of scale will come into play and prices will drop and people will buy no matter what elon says on twitter. People care most about their bank account first and foremost with rare exception.

Just my 2 cents, could be wrong.

I agree with the general point. Tesla's deliveries are up 40% YoY, production 47%. As long as they are still making the exceptional margins they have (and should be lowering production costs), they can easily afford to cut prices (as needed anyway to further "mainstream" EVs; most Americans can't spend $70k on a compact crossover) they can continue to gain market share. Real question IMO is how are GM, F, Stellantis, Toyota and VW doing relative? If Tesla sales are up 40% while others are flat or down-that's a very good thing. And if they can continue the trend as the recession deepens (or as the economy slows down, if you don't like the R word) TSLA can come out stronger than ever, especially compared to the competition.

 

[EVWatcher]

When I first looked at this graph, I was like "huh, so their ideal state is to have 50% of production in transit?". That's where that red line seems to be.

Ya. The lack of y axis labeling and weird y axis scale isn’t going to win any awards over at /r dataisbeautiful

 

[SunCatcher]

Can't wait to see how CNBC spins a 47% increase in production YoY and a 1 3/4 million annual run rate based on Q4 as a bad thing.

"Tesla reports 1.31 million deliveries in 2022, growth of 40% over last year"​

CNBC headline from just now. Article actually pretty much just telling it how it is. A bit surprising they didn't stick the knife in and twist it. I'm somewhat impressed.

You can go find the link yourself. You're welcome!

edit; Ninja'd by @traxila

 

[generalenthu]

72k/439,701*75 days = 12 days

Dont follow the 440k denominator or the 75 days steady state unless you assume Tesla is supply constrained at these prices. At these prices they're not in China or US (especially w/o the credit on the 5 seater Y).

 

[elasalle]

Safe to say incentives directly proportional to inventory build-up?
If above is true, then US is where deliveries lagged the most- and was also where there was a super valid reason- that goes away in Q1

 

[EVNow]

Does anyone know what the average transit time for a tesla sold is?

In the finance thread I was saying about 2 weeks of production in transit / inventory seems ideal when production in all plants is ramped up and serving local/regional needs. That would be 14 days of inventory, historically very low for an automaker. With about 55k now in inventory, Tesla is close to 11 days now. 2 weeks to move inventory from factory to delivery sounds good on average (may be a bit aggressive).

Tesla could do all their maintenance/upgrade shutdowns at the end of quarters to reduce inventory further.

ps : Better numbers here. I was considering only additional inventory in the last 2 quarters. So, ~12 days.

That's Q4 inventory growth of 34,423.
On top of the prior Q3 inventory of 30.144 (i.e. 8-days of sales)

 

[Stretch2727]

This is incorrect. 3750 and 10,000 SC miles already existed prior to the treasury announcement. They tacked on an additional 3750 to help with EoQ push.

Dec 1st: 3750 price adjustment
Dec 15th: 10,000 SC miles
Dec 22: Additional 3750 incentive

I am more concerned we have not seen a clear strategy to take advantage of the IRA act. At minimum on the Model 3 as it has been known for a while the LR Model 3 will not meet the price cap.

When Tesla lost some of the incentive in Jan 2019 they made up for it by adding a discount for the $3750 they lost. It was noted in the Q4 2018 P & D report.

Today we don't see a clear plan. I just hope Elon has not sworn off incentives to the point of doing nothing. There is a lot they can do to make the cars very attractive from a price point to drive even more demand in a slowing market in the US.

 

[bballshinobi]

3.8% miss on deliveries, right? Is that big or small for WS?

I am sure the numbers were even worse when he sold his last batch of shares because it was around the same time the discount was increased to $7.5k. And since we barely broke 400k delivery, unless you don’t think the $7.5 discount helped move cars, then we must be tracking to do a lot worse than 400k. We were in danger of doing less than Q3 so the discount was introduced. Elon knew the numbers were bad so he sold more shares for “dry powder”.

 

[Beltsbear]

We need more data to conclude that. E.g. avoigt reported on Twitter that his Plaid S couldn’t be delivered the last day of the year because the truck didn’t arrive on time and his new appointment was for a week later. Somebody mentioned 2900 cars in Zeebrugge last week. They delivered many hundreds in Belgium and The Netherlands but there may still be 2000 cars there.

This mad rush at the end of the quarter is quite inefficient. And as production rises, it becomes harder and harder to do. I have no problem with 10 days worth of cars laying around so long as they are moving efficiently. There is also an advantage to people being able to buy Tesla's on the spot, vs waiting for an order.

 

[Discoducky]

Can't wait to see how CNBC spins a 47% increase in production YoY and a 1 3/4 million annual run rate based on Q4 as a bad thing.

They'll spin it negative no matter what.

The news I'm interested in is how many cars were sold in Q4 by the Top 15 car makers as compared to Q4 2021. Here's Q3 2022 for the US (couldn't find the global figures).

 

[mongo]

Dont follow the 440k denominator or the 75 days steady state unless you assume Tesla is supply constrained at these prices. At these prices they're not in China or US (especially w/o the credit on the 5 seater Y).

That is how Tesla calculates it in the quarterly reports. So we need to use that to have comparable numbers.
12 becomes 10 days [14.5] if you use a 91 day quarter.

Crud, I did mess up though, it's based on quarterly deliveries, not production.
Q3: 8/75*344 = 37k cars
Plus 34k = 71k
71k/405k*75=13 days of inventory.

 

[EVWatcher]

Am I the only one who doesn’t think this is sign anything is bad? Sure the media may spin it that way but everything seems to line up pretty sensibly with an attempt to smooth the delivery wave.

Edit: with the exception of the mad dash to sell out inventory at the end of the quarter. Almost wish they hadn’t don’t that now so they would have more inventory to sell today.

 

[geometro]

Didn’t take long…

Elon Musk’s Tesla Comes Up Short of 2022 Delivery Target as Growth Slows

Elon Musk’s electric-car maker didn’t meet its initial goal of increasing annual deliveries by 50% or more last year

www.wsj.com

 

[Mengy]

From the list posted earlier Wall Street consensus itself got nearest to correct on production -- 438.8k vs 439k actual. Best single estimate was Gary Black (436k), followed by Farzad and Troy at 443k and 430k respectively.

For deliveries everyone estimated much higher than the 405k actual, with the "nearest" being the IR compilied consenus at ~418k and then 4 others bunched up within a couple of 420k... (troy at 423k and Farzad and Rob Maurer way off at over 430k).

Production being that much higher than deliveries will reinforce the demand cliff narrative and be cited every time someone repeats the "Tesla sells all the cars they can make" line

Yep, Tuesday is going to be a bad day for TSLA given these numbers. Expect to hear lots more "demand issue" discussions by the media, and honestly I can't blame anyone for thinking that after this, especially after all the incentives Tesla pushed for end of Q4. Coupled with the IRA fiasco which excludes Tesla's best selling model and yeah, TSLA will likely have a hard time in early 2023.

I'm still shocked that even my own very conservative estimates in my spreadsheet were STILL not conservative enough....

Also, it would appear even Troy was too optimistic, despite so many TMC members attacking him for his "lowball" estimates. I wonder if we'll see any apologies to Troy from members here?

On the plus side, despite deliveries being low, production wasn't too bad, although I'm starting to doubt we'll cross the 2 million produced mark for 2023 given the economic environment. I still think we'll see a nice Megapack surprise in the Q4 earnings though. Long term I'm still bullish, but I'm starting to get a bad feeling about 2023. If we do have a demand problem, coupled with a lack of $7500 rebate and a potential big recession, well buckle in folks because dang it the road is looking bumpy....