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

[MartinAustin]

More than 15,000 shares traded so far, which is very high level of trading for Frankfurt.

They're converting their TSLA shorts back to lederhosen!!!

 

[MC3OZ]

5G covers that much more effectively. Starlink is more likely to be at a supercharger providing local wifi to parked movie watchers.

I do wonder if Starlink can be back-haul for 5G towers and Supercharger WifFi ..

They run fibre to a lot of mobile towers, with StarLink you can possibly save that step.

 

[Bet TSLA]

5G covers that much more effectively. Starlink is more likely to be at a supercharger providing local wifi to parked movie watchers.

In much of the world where there is little population there will be no 5G. There will be no economic incentive to cover much of the land area of even a place like California (where there are huge holes in coverage even now). Starlink will cover it all.

 

[printf42]

FYI for Y order holders -

It seems wheels got auto-updated +1 inch for the same price, check your order.

If you change it back, keep in mind the price is now +$1k, unless you didn't update your order since the reveal, in which case the price may be cheaper, b/c it went down $2k before today's bump plus the white color became free.

I guess RWD or 18" are no longer an option, maybe they still honor existing RWD?

I got the feeling those RWD orders would be given the option to “upgrade” to AWD after delivery.
Maybe the take rate of M3 AWD performance upgrade give them the confidence to absorb the costs of the extra motor for existing orders.

 

[FrankSG]

While a decent indicator, I am not sold on the website's estimates as a fully reliable metric, unfortunately. S/X orders have dropped from 8-10 weeks to 6-8 weeks sometime within the last week, for instance. I view it as a data point, in other words.

Weren't Model S + X sold out in China until Q3'20 before? I just checked again and now it's saying Q1'20.

Is there any chance they decided to add a 2nd shift to the S+X line, because the China demand has been out of control? Is it possible we'll go back to 20-25k S + X per quarter?

EDIT: @kengchang just corrected this. I believe MiC M3 is Q3'20, but I'm pretty sure S+X delivery estimates in China were showing Q2'20 before, right?

 

[mrdoubleb]

Just got done reading transcript from the earnings call. Some thoughts and feelings I got after reading between the lines.
- Elon has no plans of putting Tesla in “autopilot” he’s that kid in school that only functions when he’s working on something last minute. Tesla will continue to live on the edge because in some sick way that urgency to meet deadlines, deliver cars, build up production is a rush that makes everything work.
- this will continue to frustrate investors as we are nearing a time when it would seem so easy to relax, focus on what is making money and just keep putting out profitable quarters. However, that’s boring. Most of us invested in this because there is this belief that the company can change the world. I firmly believe only one man is capable of seeing that through so I’m willing to ride this roller coaster to the end.
- the last minute urgency Musk operates in is seemingly how he views our chance of beating global warming, it’s that sense of urgency that we all need to be part of. It’s unknown if we are early to adopting to renewables or late but regardless we should operate as if tomorrow is the deadline. (Might sound a bit dramatic but I like the symbolic nature of it)
- The battery production is driving him nuts. I think he repeated himself several times that Tesla can only go as fast as battery production moves. Questions about vans and semi led him basically say “look it would make no sense to start a project if we don’t have the essential part to it...semi uses a ton of packs”

Personally I’m equally excited and scared as hell hearing him talk about how fast they will be growing and how much money they will be spending, but this is the only way forward. My fear is people not understanding this, and not on board with the process. It’s been an incredible ride the last few months, but at some point we will run into the headwinds of growth. The best is ahead though, just sit back and enjoy the ride.

I just finished listening to the earnings call as well - first time ever, that I did not do that live as it happened.

As he was talking about the need to increase battery production and how that is limiting their future projects, I kept thinking "but why?" when they have the biggest and most efficient production process for this in the world.

The only explanation I have, is that while they could just simply continue expanding GF1 (remember it is till only 1/3 if the intended footprint!), they must be waiting for their next gen battery design (i.e. Maxwell + other fairy dust) to come online before doing that. Towards the very end he was practically saying, why don't you fancy WS analysts read what some of the retail investors have figured out about this as they have been really good at reading between the lines. To me it would be logical,that, as we were theorizing, if you intend to introduce dry electrodes that require 1/16 of the production space due to eliminating those drying ovens, you would not want to build factories and production lines supporting the old technology at this point. This is also supported by how small the footprint of GF3 (under construction) and GF4 (on those blueprints) cell factories are compared to GF1 original design size. It also explains why they contracted LG and CATL (i think the latter was new info) to supply GF3 cells as they intend to open their own cell factory in Shanghai already with the new technology and just needed something to bridge that gap.

 

[kengchang]

Weren't Model S + X sold out in China until Q3'20 before? I just checked again and now it's saying Q1'20.

Is there any chance they decided to add a 2nd shift to the S+X line, because the China demand has been out of control? Is it possible we'll go back to 20-25k S + X per quarter?

Nope S/X never reached past Q1 for delivery.

Edit: S/X still Q1 when 3 reached Q3.

S/X is limited by the 18650 capacity which Tesla/Panasonic is not going to expand. So not much unit growth on the S/X unless a smaller pack returns

 

[FrankSG]

Why would it be seriously insufficient once GF3 & GF4 come online ?

I'm re-listening to the call just now, and during his opening remarks Elon states:

...the current production rate was achieved before we even started to produce the Model Y out of Fremont, so there is a lot of potential to go beyond that number.

That doesn't sound like they'll be capped at 10k/week to be honest.

 

[avoigt]

Another day for the history books.

I agree to the assessment of most that the numbers look good but they did not surprise me at all. Instead I expected a higher forecast than the 500k for 2020 and believe its underpromising to enable them to overdeliver in 2020. What surprised me was the quite hefty reaction of the stock which I naturally love.

The explanation has been stated here already which is that the broader market never has seen what many bright people here at TMC predicted and which really is obvious looking at the information available and I speak about the last years as well. That may sound arrogant but I am still puzzled how people could overlook the obvious.

Clearly media, analysts, shorts and bears have not expected that and the call as well as the numbers do not give really any fundamental opportunity to argue against Tesla. They used all what they had the last years to find the negative and the development proved them wrong while the hard numbers prove Elon right. It will get much better from here and the 2nd half 2020 will be fun.

One particular factor I really enjoyed is the 'boring execution' of what has been said before. While the financial health is getting now more obvious we have not heard a lot of future predictions other than and thats very exciting, the battery drive train and battery improvements on costs, capacity and performance. IMO that alone is a killer for all other BEV manufacturers as we won't see Tesla just twice as good as a Taycan but maybe soon trice or more. Thats impressive and exciting together and will Tesla lift on another level. Its gonna be hard for any other manufacturer to sell BEVs with such a technology lead of Tesla and unfortunately or fortunately based on your perspective that will mean a stronger pressure on ICE with predicted merger, bail out or even bankruptcy.

Also, we have seen more a team effort at the call and not only Elon standing in the limelight which is another positive. Would be good for him not being all the time that exposed and there has been moments in the call where Elons emotions went high, which I fully understand but Analysts don't. So if I say boring then I mean that emotions are usually not well received although many here including me like them.

Big Kudos to the retail investor community from Elon about our ability to get thinks right. It's a justified statement and also explains his preference of having Retail questions in calls. Also his continues push to e.g. podcasters and youtubers to get the message out is a sign of his appreciation of the work we all do daily and in return not surprisingly understanding Tesla much better than most. Thats an asset which no other company I know has including Apple or its like.

Its gonna be an exciting trading day today but much more important is that this is a fundamentally triggered justified stock price rise and not a bubble or just driven by short covering. Sure, people argue against the market valuation already today and yesterday but they don't understand that this are factored in improvements of Tesla growing into one if not the largest automotive/technology/energy company globally.

My trading strategy is boring and I told everybody before that swing trading is IMO very risky as you may get it right but more because of being lucky than right. Its hard to differentiate the two at Wall Street. Many who thought a pattern from the past will repeat in the future did sell waiting for a dip after ER and are now in an uncomfortable situation. Sure you can have a trading depot and play with it but for me leverage was more important and I did go to my very maximum long time ago and can claim to have done everything right. Sometimes the most hard thing when investing is to do nothing and stick to a strategy.

I recommended in the past when we have been below $200 to stay calm and look at that what I call 'inner value' and I do now the same. Emotions won't help you to win anything trading so be happy if you did it right but avoid to act much unless its a part of your defined longer strategy. We may see the market overdoing it in 2020 and corrections and consolidations which means again nothing because what counts is that Tesla does execute on the plan and they do that just fine.

Enjoy the ride!

 

[Fact Checking]

To me it would be logical,that, as we were theorizing, if you intend to introduce dry electrodes that require 1/16 of the production space due to eliminating those drying ovens, you would not want to build factories and production lines supporting the old technology at this point. This is also supported by how small the footprint of GF3 (under construction) and GF4 (on those blueprints) cell factories are compared to GF1 original design size.

Absolutely, the Maxwell "dry cell" process reduces cell manufacturing from a messy, capital intensive chemical factory in essence that has to work very hard to recover nasty solvents and has to waste a lot of energy warming and cooling things, to basically a plastics factory with a mild use of chemicals and no big energy needs. As a happy side effect of not using solvents energy density increases as well ...

It's indeed transformative.

 

[jeewee3000]

I just finished listening to the earnings call as well - first time ever, that I did not do that live as it happened.

As he was talking about the need to increase battery production and how that is limiting their future projects, I kept thinking "but why?" when they have the biggest and most efficient production process for this in the world.

The only explanation I have, is that while they could just simply continue expanding GF1 (remember it is till only 1/3 if the intended footprint!), they must be waiting for their next gen battery design (i.e. Maxwell + other fairy dust) to come online before doing that. Towards the very end he was practically saying, why don't you fancy WS analysts read what some of the retail investors have figured out about this as they have been really good at reading between the lines. To me it would be logical,that, as we were theorizing, if you intend to introduce dry electrodes that require 1/16 of the production space due to eliminating those drying ovens, you would not want to build factories and production lines supporting the old technology at this point. This is also supported by how small the footprint of GF3 (under construction) and GF4 (on those blueprints) cell factories are compared to GF1 original design size. It also explains why they contracted LG and CATL (i think the latter was new info) to supply GF3 cells as they intend to open their own cell factory in Shanghai already with the new technology and just needed something to bridge that gap.

Great points, but that would also imply the new battery tech is not yet ready for production? (I mean still in development fase.)

That could be the reason of the battery day delays.

Let's just hope by april the tech will be ready for mass production.

 

[Fact Checking]

I'm re-listening to the call just now, and during his opening remarks Elon states:

...the current production rate was achieved before we even started to produce the Model Y out of Fremont, so there is a lot of potential to go beyond that number.​

That doesn't sound like they'll be capped at 10k/week to be honest.

Yep, that's my interpretation as well.

One thing many still have not realized I think is how much the metal casting machine magic is going to help Fremont production capacity: the chassis lines used a lot of expensive welding robots to weld together 70+ stamped pieces of the Model 3 underbody...

With the casting machine that's just ~4 pieces which are shipped in from the foundry.

Much lower capex footprint plus better utilization of factory footprint, less workload for the stamping lines plus significantly lower cost of goods ...

 

[Tslynk67]

I just developed a huge crush on Tasha. DM me if you read these forums?

Hands off, I was in love with her first!!

But seriously, she's super smart, an excellent presenter/debater, comes across as a nice and happy person, and she's rather pleasing to the eye too.

 

[avoigt]

Gene Munster:

"The key question remains: how much is a foundational company in the future of transportation worth? We think more than the current $110B."
Tesla: How Much Is the Future of Transportation Worth? | Loup Ventures

 

[lklundin]

Ho-hum, another year that Tesla should grow 50% YoY. So boring.

Yes, for Tesla to maintain their staggering annual growth of 50%, 2020 needs to see 550k cars sold.

With the ramp up of Tesla Energy - and of the Tesla Semi, it could make sense to start measuring their growth in battery capacity delivered.

 

[Fact Checking]

I agree to the assessment of most that the numbers look good but they did not surprise me at all. Instead I expected a higher forecast than the 500k for 2020 and believe its underpromising to enable them to overdeliver in 2020. What surprised me was the quite hefty reaction of the stock which I naturally love.

They actually guided for a production capacity of 740,000/year sometime in 2020 - and guided that they will "comfortably" exceed 500k deliveries.

Production capacity is currently at ~415k/year, as they scale that up to 740k/year "by mid-2020" and they conservatively guided for whole year 2020 deliveries to be "above 500k".

They also said this about Shanghai:

Shanghai

"We have been gradually ramping local production of battery packs since late Q4 2019. The rest of the Model 3 manufacturing processes are running as expected. Due to strong initial customer response in China, our goal is to increase Model 3 capacity even further using existing facilities."

"We have already broken ground on the next phase of Gigafactory Shanghai. Given the popularity of the SUV vehicle segment, we are planning for Model Y capacity to be at least equivalent to Model 3 capacity."​

I.e. the 150k/year Model 3 capacity will be expanded - and at least 150/year Model Y capacity will come online at GF3 as well.

I.e. the annual production capacity Tesla has guided for to reach in 2020 is 790,000 vehicles/year plus unspecified upgrades in GF3, which is at least +90% growth over their end-of-2019 production capacity ...

This guided rate of growth is mind-boggling, especially in light of Tesla's now conservative and cautious guidance language, and I think the after-hours +10% rise on heavy volume was well justified, and it might potentially only be the beginning of the TSLA price correction.

Still not advice.

 

[Tslynk67]

While you're waiting for pre-market, here's Steven's commentary on Gali vs Gordon

 

[lklundin]

With AH over 620$ I am thinking forced covering from margin calls...

On re-reading my post, I can see that it is inaccurate.
With the AH over 620$ (just now ca. 640$), I am thinking that forced covering from margin calls are coming.

 

[MC3OZ]

Nope S/X never reached past Q1 for delivery.

Edit: S/X still Q1 when 3 reached Q3.

S/X is limited by the 18650 capacity which Tesla/Panasonic is not going to expand. So not much unit growth on the S/X unless a smaller pack returns

The Q4 Update mentions Model S/X Fremont Capacity of 90K.

My guess with Plaid using a different pack, and 18650s being used for some smaller packs it is possible...

 

[Fact Checking]

On re-reading my post, I can see that it is inaccurate.
With the AH over 620$ (just now ca. 640$), I am thinking that forced covering from margin calls are coming.

Yeah, that's my guess too, the main theme in Nasdaq pre-market trading is going to be margin calls (or other things equal, which they might not be), plus there will be another round of margin calls if TSLA closes at new all-time-highs: first level of margin protection is usually marked to market based on closing price, which was $580 yesterday.

I believe a couple of weeks ago @Curt Renz also alluded to ~2pm ET margin calls during the trading session - does anyone know the timing/conditions of those kinds of margin calls?