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

[Green46]

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.

Indeed. The important bottle neck is still battery quantities. A little frustrating as we have known this for a long while already, but I wonder if having 20-30% more batteries (cells and packs) atm would translate in the Semi (or any other model in volume) coming out any earlier.

They already have their hands very full with building new capacity, so maybe having more batts now would not necessarily bring pipeline models much earlier.

 

[MC3OZ]

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.

Possibly GF1 has some natural limit determined by the ovens and the footprint, then they have to spend more Capex to significantly expand - less efficient..

If the next gen battery tech allows them to scale quick in a capital efficient way, that is worth waiting for...

Similarly with 10K per week Model 3+Y they can do that efficiently with minimal additional spend at present, if going beyond that requires more stamping and/or more cells. They need to wait and time those investments at the right time...

I don't think 490K production per year at Fremont is some hard limit they can never exceed,,,,

But making Model 3+Y in Shanghai and Berlin is probably a higher priority...

Actually I curious as to why Plaid is only coming at the end of the year, seems to me they are working through a systematic step by step plan... and some things are going to take time.. If I had to guess Plaid is the new Maxwell battery.

 

[JBRR]

CANACCORD GENUITY RAISES $TSLA TARGET PRICE TO $750 FROM $515

Barclay: “Is $TSLA safe to short yet?” "WE EXPECT THAT THE aPRIL BATTERY INVESTOR DAY WILL OUTLINE AGGRESSIVE COST REDUCTION AND CAPACITY ADDITION TARGETS – MAKING IT OVERALL HARD TO PRESS A SHORT UNTIL PRICE MOMENTUM BREAKS."

Piper Raising $TSLA Price Target to $729 After Another Good Q; $TSLA is Still Our Top Pick
"It's becoming clear, in our view, that TSLA is on a path toward becoming the world's only relevant publicly-listed auto maker." - Alex Potter / Piper Sandler

Earnings call transcript.
https://seekingalpha.com/article/43...-results-earnings-call-transcript?part=single

 

[Tslynk67]

Well, this marks 300 dollars since I sold all 59 of my Jan21s calls and started a short straddle. I don't even know what to say or do or think at this point. Not only did I leave over 1 million dollars on the table because I ended up being weak long after all, but I actually lost a ton of money trying to short straddle it. Worst part of this is that I love this company and I want to hop back in and go long again, but I don't know if the parabolic movement will hold.

No offence, but I think we've had this discussion before, no?

Hope macros don't piss on our chips today (chips as in fries for you yanks), but Nasdaq Futures are down 0.68% at the moment. Historically is hasn't tended to impact $TSLA as much as other stocks, might even play into our favour today = offload $FB, invest in the future, listen to what BlackRock said, maybe they're right... etc.

 

[Tslynk67]

Pre-market now open

 

[Fact Checking]

CANACCORD GENUITY RAISES $TSLA TARGET PRICE TO $750 FROM $515

Barclay: “Is $TSLA safe to short yet?” "WE EXPECT THAT THE aPRIL BATTERY INVESTOR DAY WILL OUTLINE AGGRESSIVE COST REDUCTION AND CAPACITY ADDITION TARGETS – MAKING IT OVERALL HARD TO PRESS A SHORT UNTIL PRICE MOMENTUM BREAKS."

Piper Raising $TSLA Price Target to $729 After Another Good Q; $TSLA is Still Our Top Pick
"It's becoming clear, in our view, that TSLA is on a path toward becoming the world's only relevant publicly-listed auto maker." - Alex Potter / Piper Sandler

Wow, I think Alex Potter just called the death of the ICE industry, which is pretty brave from an analyst.

Also, going into Battery Investor Day there might also be other catalysts for Tesla:

• Tesla's well deserved Moody's upgrade is overdue. No excuse not to do it after Q4 results ...
• in a similar fashion, S&P upgrade is overdue as well
  
• S&P 500 inclusion is still entirely possible after Q1, even on marginal profits, because they'll be able to recognize a fair chunk of the $1.8b deferred tax asset. Note how they recognized costs from the CEO award in Q4 already, with language that I think will be similar for the deferred tax asset recognition.
• Model Y deliveries.
• Increasing Giga Shanghai deliveries
• Steady and rapid Model Y progress at Giga Shanghai
• An FSD feature-complete bombshell might land anytime, triggering hundreds of millions of dollars of revenue and profits recognition.

Just based on these I wouldn't want to be short TSLA in the next couple of months.

 

[Fact Checking]

Pre-market now open
View attachment 505912

Broadly following macros down from $650 to $641, macros fell in Asian trading.

 

[sparcs]

Piper Raising $TSLA Price Target to $729 After Another Good Q; $TSLA is Still Our Top Pick
"It's becoming clear, in our view, that TSLA is on a path toward becoming the world's only relevant publicly-listed auto maker." - Alex Potter / Piper Sandler

just to connect the dots. Alex Potter is the guy who did that really good December interview on the Tesla Daily Podcast:

 

[Fact Checking]

Once they port these improvements to the Model 3, they'll be able to take those now unused robots from the 3 BIW line and ship them to GF3 or GF4, hopefully.

I believe the plan for Fremont is going to be to just reuse those robots to increase the throughput of the existing BIW lines.

The cast underbody will free up not just welding robots, but also stamping capacity. I believe Fremont 3+Y capacity can now scale beyond 10k/week, as @ReflexFunds speculated previously.

Tesla guided for 10k/week by mid-2020 - but they probably won't stop there.

 

[Fact Checking]

These are examples of why the only strategy for building wealth over time is buy-and-hold. Sounds easy doesn't it? You don't have to do anything. It's very hard to do nothing.

Very important insight, and the key to Buffet's investment strategy as well: most of the time Berkshire Hathaway does exactly nothing.

 

[avoigt]

In case it has not been posted yet it looks like the 70:1 casting machine is real and in production. Thats massive and a truly next level. Implications on the bottom line will be massive. A technical detail most will not understand at first that will increase GM to the surprise of many.
Nafnlaus on Twitter

 

[mrdoubleb]

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.

If I were them (not that they need my armchair coaching...) I would be very careful about announcing future battery tech prior to production as it may significantly osborne current sales. I think we got a glimpse of that with respect to S&X and the magical refresh rumors last year.

So hopefully battery investor day either talks about something a few years out, or ends with "...and by the way this is already in production as of 2 weeks ago". Remember they did the latter with the HW3 announcement last year at the autonomy day, which was a smart move.

 

[KarenRei]

I’m so happy the single 420 put I bought would be worthless tomorrow.
It costed much less than “selling some trading share” or “de-leverage to commons only”.
Wake me up at battery day, have we already decided it has to be April 20th?

This. Anyone who's bullish on Tesla overall should not get scared (about insert-thing-you're-scared-of-here) and sell their equity in the company. They should be hedging specifically against the thing they're scared of. Only if you're no longer bullish about the company as a whole, or need the cash, should you be selling.

Options are not just for increasing leverage. They're also for decreasing leverage. E.g. reducing risk.

nothing, because he's always extremely vague making comments about already public information.

He allegedgly went inside GF3, he allegedly went to Tesla's cold weather testing, he allegedly went to a secret battery lab, he allegedly met with Elon and Trump, but no way for any of us to verify it. Always conveniently vague with details and then you start adding up all the claims....

Yeah... I was initially really interested in that Soylent account, as he's had a lot of great engineering insights. But his stories keep getting increasingly fantastical. It almost feels like the Secret Life of Walter Mitty (the short story, not the completely-unrelated movie).

Where did you read/hear that they are sold out for Q1? That's news to me.

China domestic sold out until Q2, China international until Q3. But elsewhere is all very late quarter Q1. Looking like it'll sell out well before quarter end, but we'll have to wait and see.

Pre-market now open
View attachment 505912

Meh, not even up 11%. Lame.

 

[mrdoubleb]

In case it has not been posted yet it looks like the 70:1 casting machine is real and in production. Thats massive and a truly next level. Implications on the bottom line will be massive. A technical detail most will not understand at first that will increase GM to the surprise of many.
Nafnlaus on Twitter

I would be careful with that assumption until someone (maybe some of our members) with some casting experience confirms it with these pictures. I think their first goal was 70->4 which would already be a huge jump.

I also think Musk made several nods to Munro over the past few weeks in the Third Row podcast interview and in the ER call last night as well, he said "... and if people do teardowns of Model Y I think they will be very happy with what they see". I think that was a clear reference to Sandy`s comments about what a "mess" the Model 3 rear end is. I think he is also aware Munro has 2 Model Ys on order to take them apart.

You know what I would REALLY be interested in but no one seemed to ask during the ER? Are these Model Y changes (rear end, new cabling) going into Model 3 right away or only much later? This could have a significant positive impact on M3 gross margins and production volumes.

 

[KarenRei]

I would caution a but with that until someone (maybe some of our members) with some casting experience confirms that with these pictures. I think their first goal was 70->4 which would already be a huge jump.

I also think Musk made several nods to Munro over the past few weeks in the Third Row podcast interview and in the ER call last night as well, he said "... and if people do teardowns of Model Y I think they will be very happy with what they see". I think that was a clear reference to Sandy`s comments about what a "mess" the Model 3 rear end is. I think he is also aware Munro has 2 Model Ys on order to take them apart.

You know what I would REALLY be interested in but no one seemed to ask during the ER? Are these Model Y changes (rear end, new cabling) going into Model 3 right away or only much later? This could have a significant positive impact on M3 gross margins and production volumes.

They'll have to take the 3's body line down to do change stamped part out for castings, and there will be interruptions in GA (although they have two lines) for other parts. I expect they'll do this once Y production is in full swing (and all production bugs are ironed out); they wouldn't want to do that now.

I think a major reason they'd want to do this (with respect to casting) is it'd free up more press capacity to increase Y production. With things like wiring and the like, that'd be a straightforward COGS reduction.

But again, need to debug the process on the Y first.

 

[Fact Checking]

Yeah... I was initially really interested in that Soylent account, as he's had a lot of great engineering insights. But his stories keep getting increasingly fantastical. It almost feels like the Secret Life of Walter Mitty (the short story, not the movie).

The nuggets of information he keeps dropping turn out to be accurate though. I'm 90% certain he's genuine (which is the maximum extent I'm willing to be certain in an anonymous person's claims ). He stays anonymous because his business model is buy side competitive research, i.e. secrecy is key.

 

[avoigt]

I would caution a but with that until someone (maybe some of our members) with some casting experience confirms that with these pictures. I think their first goal was 70->4 which would already be a huge jump.

I also think Musk made several nods to Munro over the past few weeks in the Third Row podcast interview and in the ER call last night as well, he said "... and if people do teardowns of Model Y I think they will be very happy with what they see". I think that was a clear reference to Sandy`s comments about what a "mess" the Model 3 rear end is. I think he is also aware Munro has 2 Model Ys on order to take them apart.

You know what I would REALLY be interested in but no one seemed to ask during the ER? Are these Model Y changes (rear end, new cabling) going into Model 3 right away or only much later? This could have a significant positive impact on M3 gross margins and production volumes.

Fair points. I am an engineer but not a casting experts however I never have seen pictures like that and did have doubts that they can lift the machine so it looks to me even I have been too conservative. For me this picture on the right is a clear prove. If you increase the size you see something I never have seen in a car before. Thats a new technology at least for a body of that size. Even 70:4 is mind-blowing.

Munro will likely been blown away when tearing down the Y. That will be fun to watch.

My expectation is that the new casting technology will be used for all 3 and Y new production lines they build e.g. GF4

 

[Fact Checking]

They'll have to take the 3's body line down to do change stamped part out for castings, and there will be interruptions in GA (although they have two lines) for other parts. I expect they'll do this once Y production is in full swing (and all production bugs are ironed out); they wouldn't want to do that now.

I think a major reason they'd want to do this (with respect to casting) is it'd free up more press capacity to increase Y production. With things like wiring and the like, that'd be a straightforward COGS reduction.

But again, need to debug the process on the Y first.

Exactly!

That the 5,000 bar high-pressure metal molding injection machine reduces Fremont welding lines footprint and frees welding robots up to increase body line capacity with very low capex, while freeing up stamping machine capacity as well is a key insight IMO.

Since molding forms are relatively easy to create, the Plaid might have used a single-cast underbody as well, because weight reductions are particularly valuable to racing cars ...

Molding is also far easier to iterate. It's incredible what Tesla did here: they turned a complex, long lead time metalworks jigsaw puzzle process into what is basically fast prototyping plastics molding technology ...

I'm pretty sure this and the resulting dramatic reduction in capex per capacity of production and reduction in CoGs hasn't been priced in yet, after-market trading closed way too soon.

 

[MD70]

It annoys me that nobody was quick enough to ask this question.

You know what I would REALLY be interested in but no one seemed to ask during the ER? Are these Model Y changes (rear end, new cabling) going into Model 3 right away or only much later? This could have a significant positive impact on M3 g

like the other person said logically they should do this to the model 3 after the Y is being produced but it would have been good to get confirmation and a timeline on the call.

 

[Fact Checking]

It annoys me that nobody was quick enough to ask this question.


like the other person said logically they should do this to the model 3 after the Y is being produced but it would have been good to get confirmation and a timeline on the call.

I'm 100% content with such advances being sprung on the market without warning. People should think twice before shorting TSLA.

Tesla gave their guidance: installed production capacity of 790,000 vehicles/year by mid-2020 ...