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

[MC3OZ]

Do you have a citation for most calls being handled by rangers?

Our own service center can handle at least 3-4 cars at a time indoors, and several outside if a lift isn't needed, all at the same time.

1, or even 2 (since there's about twice as many as service centers), rangers simply can't do nearly as much work in the same day- especially since they need to travel between customer locations for each call- and can't do work requiring a lift at all.




You realize that contradicts your "rangers can handle this!" narrative? If it's mostly rangers doing the work why do they need larger SCs?

But even if newer SCs are 2x the size of old ones, that's only 30% growth per year of service stalls- versus a significantly higher fleet growth. And even that math is only true if ALL the new SCs are twice as big.


Fleet growth 17->18 was almost 100%

18->19 was almost 70%

19->20 (assuming ~500-550k deliveries) will be another 55-60%

20->21 should be ANOTHER 50% with only 750k deliveries and that might well be more depending on CT factory plus China Y.



And there's no "ranger" equivalent making up for supercharger stalls missing targets every year and not keeping up with fleet growth either.

(Even worse- I've seen no recent news on those special "cybertruck with trailer" friendly supercharger locations they supposedly were gonna throw up all over.... nor the megachargers to support the semi (AFAIK they still just plug in a bunch of regular SC plugs to a sharing device to charge the prototype semis and even then there's no room in most spots to do that with a trailer on it)



Again- all of this is easy fixes, but cost $

The other side of the equation is higher build quality and better QA resulting in less warranty work.

More service work is then profitable, upgrades, routine maintenance etc... but also expanding service can then catch up with demand.

That is why Model Y build quality and QA is all important,. get that right and all goes well. In spite of early problems, my hunch is Tesla knows this and is trying very hard to nail it.

 

[Knightshade]

Personally, I don't see a service problem here in my area (Western Washington), especially considering our Tesla's only need a shop a small fraction of the times our gas cars did. Both my wife and I scheduled our Model 3's to get the AP hardware 3.0 installed next week and were surprised to learn there is a new Tesla Service Center in Lynnwood, WA which is considerably closer than where we both took delivery in , Bellevue, WA. There is also one in Seattle proper. We are not far from the Canadian border so it's a 45 minute drive to Lynnwood and, while I would love to have a Tesla Service Center in Anacortes, Burlington/Mount Vernon or even Bellingham, it's not a big deal because we almost never have to take them in.

FWIW there's one (Raleigh) that is about a 45 minute drive from home, but only ~10 min from work... which is great (the next nearest is a couple hours away in Charlotte)

But they're offering uber credits to most folks, not loaners (and they don't even offer the credits unless you specifically ask) despite Elon promising years ago loaners for everyone- and having promised repeatedly in the last couple years to "fix" the fact he didn't keep his original promise.

And I did finally get HW3 as well. 4 months after I first asked for it, and 3 cancelled (all at the last minute) appointments later- because every month they'd say "Sorry, we don't have parts- try again next month!"

(Teslas incompetence at parts/logistics for repairs and such is well documented elsewhere so we can leave that at that)

My car has never been in in the last 2 years (except to pickup some new winter tires) and my wife's Model 3 has only been in one time in over 2 years (she had an diver restraint malfunction warning appear).

Mine has been in 3 times... Once was to correct a delivery issue (same day as delivery, so at least I didn't have to wait).... second was to replace a windshield since nobody but Tesla around here does Tesla windshield replacement.... third was the HW3 upgrade.

I've also had 2 ranger visits (one to deliver and program a keycard since they forgot to actually include a second one at delivery and had to order one, and this was back when a tesla tech had to program them) and once for the charge pin recall and to address a rattle on the seatbelt attachment.

The second ranger visit took 2 tries BTW- first time they "confirmed" the appointment the night before via text, for 8AM the following morning. Then 30 minutes before 8AM the tech texts me saying he has no idea why this is on his schedule as he's in an entirely different city 100 miles away the entire day doing other work and he'd be in my area the following week instead. (Again- tesla is pretty incompetent at logistics stuff)


As they get more and more of the market- they're going to increasingly be selling not just to fans, but to folks used to excellent scheduling and service from other brands like Lexus... and no loaners, weeks of waiting for an appointment, and multiple last minute cancellations are gonna be serious pain points for these folks.

Here's the amazing thing about expanding delivery/service centers: It's a HUGE demand lever. That's why Elon hasn't pulled it yet, they don't need more demand! This is important for investors to understand and I assume the local situation is repeated all over the country. Specifically, there are a whole bunch of towns and small cities between Seattle and the Canadian border including the San Juan Islands, Anacortes, Oak Harbor, Bellingham and Mount Vernon/Burlington that don't have any Service or Delivery centers. There are none in Eastern Washington either. Consequentially Tesla ownership is much lower than the Seattle Metro area even though there are hundreds of thousands of residents to the north that would love to own a Tesla and have the income to afford new car purchases. A couple of new, strategically placed Service/Delivery centers would increase demand tremendously. The problem is, Tesla doesn't have the production capacity to meet that new demand quite yet.

Given they're planning to have cybertrucks coming out of a year-to-be-designated factory- and likely to be looking at customers in much more remote locations- they probably are gonna need to start spending some significant money to correct this. Plus all those cybertruck-with-trailer friendly superchargers they haven't done anything with yet but promised to.


Which loops back around to there's a bunch of $ they've been neglecting to spend on service center expansion (and loaner fleet expansion) and supercharger expansion

 

[Knightshade]

The other side of the equation is higher build quality and better QA resulting in less warranty work.

More service work is then profitable, upgrades, routine maintenance etc... but also expanding service can then catch up with demand.

That is why Model Y build quality and QA is all important,. get that right and all goes well. In spite of early problems, my hunch is Tesla knows this and is trying very hard to nail it.

Agreed... and arguably the choice to make the CT stainless, thus avoiding the myriad paint issues the other Teslas have had, is a smart move here too.... (for that matter the bent stainless body panels might well also avoid a lot of the fit/finish issues of previous stamped models.

 

[MP3Mike]

Do you have a citation for most calls being handled by rangers?

I can't find the quote I remember but in the 2016 Q4 letter they said: "In service, since more than 80% of our repairs are so minor that they can be done remotely, we are expanding our mobile repair service that allows Tesla to make vehicle repairs at an owner’s home or office."

You realize that contradicts your "rangers can handle this!" narrative? If it's mostly rangers doing the work why do they need larger SCs?

No it doesn't, the fleet is expanding much quicker than it has in the past, so they still need more, or larger, service centers.

And there's no "ranger" equivalent making up for supercharger stalls missing targets every year and not keeping up with fleet growth either.

The Superchargers don't have to scale inline with the fleet as the majority of charging is not handled by them. And they are expanding them where necessary. (Part of it was because they paused the expansion somewhat while they finalized the V3 Supercharger design.) Maybe not as fast as you want, but they are doing it.

And if you expect them to expand it such that there is never a wait at any site, even on a holiday and/or when an alternate route is closed, you will be disappointed.

 

[pz1975]

Sorry for the OT, but can someone recommend the best website to use to follow after hours stock action? Ideally it would be reliable, have no delay, show a list of every trade with volume for each trade, and show level 2 data.

Thanks!

 

[Knightshade]

The Superchargers don't have to scale inline with the fleet as the majority of charging is not handled by them. And they are expanding them where necessary. (Part of it was because they paused the expansion somewhat while they finalized the V3 Supercharger design.) Maybe not as fast as you want, but they are doing it.

Also not as fast as them themselves keep promising though.

They've missed their target for # of stalls, by many thousands of stalls, every single year since before Model 3 was even being sold (see #s I posted on this earlier)

At current rate (assuming they deployed a similar # in Q2 as they did in Q1) they will have just about FINALLY hit their 2018 goal by midway through 2020.... if they were slowed by the pandemic it'll be at least Q3 2020 before they hit their 2018 goal.


So it's not my expectations they're falling short of. It's their own. By a lot.

There's no excuse at all for that apart from not having been willing to ever spend the $ to meet their own targets.

 

[Artful Dodger]

After-action Report: Tue, Jul 07, 2020: (Full-Day's Trading)

Headline: "Market Whipsaws TSLA; Breaks a Tooth"

Traded: $29,798,631,897.46 ($29.80 B)
Volume: 21,507,580
VWAP: $1,385.49

Closing SP / VWAP: 100.31%
(TSLA closed ABOVE today's Avg SP)
Mkt Cap: TSLA / TM = $257.784B / $173.539B = 148.55%​

'Short' Report:

FINRA Short/Total Volume = 59.2% (54th Percentile rank Shorting)
FINRA Volume / Total NASDAQ Vol = 48.0% (48th Percentile rank FINRA Reporting)
FINRA Short Exempt Volume was 1.08% of Short Volume (50th Percentile rank)​

Comment: "TSLA shortzes r strong like bull, smart like tractor"

View all Lodger's After-Action Reports

Cheers!

 

[StealthP3D]

FWIW there's one (Raleigh) that is about a 45 minute drive from home, but only ~10 min from work... which is great (the next nearest is a couple hours away in Charlotte)

But they're offering uber credits to most folks, not loaners (and they don't even offer the credits unless you specifically ask) despite Elon promising years ago loaners for everyone- and having promised repeatedly in the last couple years to "fix" the fact he didn't keep his original promise.

And I did finally get HW3 as well. 4 months after I first asked for it, and 3 cancelled (all at the last minute) appointments later- because every month they'd say "Sorry, we don't have parts- try again next month!"

(Teslas incompetence at parts/logistics for repairs and such is well documented elsewhere so we can leave that at that)




Mine has been in 3 times... Once was to correct a delivery issue (same day as delivery, so at least I didn't have to wait).... second was to replace a windshield since nobody but Tesla around here does Tesla windshield replacement.... third was the HW3 upgrade.

I've also had 2 ranger visits (one to deliver and program a keycard since they forgot to actually include a second one at delivery and had to order one, and this was back when a tesla tech had to program them) and once for the charge pin recall and to address a rattle on the seatbelt attachment.

The second ranger visit took 2 tries BTW- first time they "confirmed" the appointment the night before via text, for 8AM the following morning. Then 30 minutes before 8AM the tech texts me saying he has no idea why this is on his schedule as he's in an entirely different city 100 miles away the entire day doing other work and he'd be in my area the following week instead. (Again- tesla is pretty incompetent at logistics stuff)


As they get more and more of the market- they're going to increasingly be selling not just to fans, but to folks used to excellent scheduling and service from other brands like Lexus... and no loaners, weeks of waiting for an appointment, and multiple last minute cancellations are gonna be serious pain points for these folks.







Given they're planning to have cybertrucks coming out of a year-to-be-designated factory- and likely to be looking at customers in much more remote locations- they probably are gonna need to start spending some significant money to correct this. Plus all those cybertruck-with-trailer friendly superchargers they haven't done anything with yet but promised to.


Which loops back around to there's a bunch of $ they've been neglecting to spend on service center expansion (and loaner fleet expansion) and supercharger expansion

Knightshade, no offense, but it doesn't look like you have a very good grasp of Tesla's finances because expanding their delivery/service network and mobile ranger fleet is actually not a huge expense in terms of the rate at which revenues will be expanding over the next two quarters - it's just part of doing business.

You are starting to sound repetitive like @neorden or whatever his name was with dire predictions last year of Tesla's imminent demise due to lack of customer service.

It's not going to happen. And remember what happened to Neoroden, he missed out on all the gains of the biggest run up Tesla stock has ever seen, at least in dollar terms.

 

[RobStark]

 

[Knightshade]

Knightshade, no offense, but it doesn't look like you have a very good grasp of Tesla's finances because expanding their delivery/service network and mobile ranger fleet is actually not a huge expense in terms of the rate at which revenues will be expanding over the next two quarters - it's just part of doing business

No offense- but it appears you didn't actually read my original post where I asked that exact question and mentioned I'd never seen anyone be able to offer a specific answer for it to establish how significant getting these up to speed would be.

I notice you didn't provide such an answer either other than to hand waive it away as not being significant.


As the kids say- <citation needed>

If it's a trivial expense- why have they failed to meet their own public goals year after year after year for supercharger deployments, let alone letting service center buildouts fall behind?

How trivial, specifically, is it?

You are starting to sound repetitive like @neorden or whatever his name was with dire predictions last year of Tesla's imminent demise due to lack of customer service.

Ah- right, anybody who mentions any valid criticism (with specific #s year over year in fact) is DOOM AND GLOOM AND BANKRUPT NEXT WEEK.

Take a hike on that bullshit please.

I said nothing remotely of the sort.


I pointed out- factually- they've repeatedly failed to invest enough to meet their own stated goals on chargers... and they keep expanding the fleet 50-100% year over year while increasing service centers only 15% year over year.

I even pointed out none of those are at all unsolvable, or even difficult, problems to fix.

Just that they cost money- money Tesla has failed to spend in recent years (hence falling behind of them)

And I'd yet to see anyone mention, or include, the cost of making that happen.


So could anyone speak to that cost, and how it might factor into growth going forward.


That's it.

Seems a fair question to me.


Surely if you have the "very good grasp" of Tesla financials you suggest I don't- you can actually answer it...right?

Please do

It's not going to happen. And remember what happened to Neoroden, he missed out on all the gains of the biggest run up Tesla stock has ever seen, at least in dollar terms.

I literally have no idea who the hell that even is- nor why you're bringing him up. I've not missed out on a bit of the recent gains at all (I mentioned tripling my $ on some calls just a couple days ago in fact among other posts in here enjoying the recent run up)

I'm just pointing out a factor I've yet to see anyone include in their math of arguing over if the stock will be $5000 a share or $10,000 a share next week.

 

[StealthP3D]

No offense- but it appears you didn't actually read my original post where I asked that exact question and mentioned I'd never seen anyone be able to offer a specific answer for it to establish how significant getting these up to speed would be.

I notice you didn't provide such an answer either other than to hand waive it away as not being significant.


As the kids say- <citation needed>

If it's a trivial expense- why have they failed to meet their own public goals year after year after year for supercharger deployments, let alone letting service center buildouts fall behind?

How trivial, specifically, is it?




Ah- right, anybody who mentions any valid criticism (with specific #s year over year in fact) is DOOM AND GLOOM AND BANKRUPT NEXT WEEK.

Take a hike on that bullshit please.

I said nothing remotely of the sort.


I pointed out- factually- they've repeatedly failed to invest enough to meet their own stated goals on chargers... and they keep expanding the fleet 50-100% year over year while increasing service centers only 15% year over year.

I even pointed out none of those are at all unsolvable, or even difficult, problems to fix.

Just that they cost money- money Tesla has failed to spend in recent years (hence falling behind of them)

And I'd yet to see anyone mention, or include, the cost of making that happen.


So could anyone speak to that cost, and how it might factor into growth going forward.


That's it.

Seems a fair question to me.


Surely if you have the "great grasp" of Tesla financials you suggest I don't- you can actually answer it...right?

Please do







I literally have no idea who the hell that even is- nor why you're bringing him up. I've not missed out on a bit of the recent gains at all (I mentioned tripling my $ on some calls just a couple days ago in fact among other posts in here enjoying the recent run up)

I'm just pointing out a factor I've yet to see anyone include in their math of arguing over if the stock will be $5000 a share or $10,000 a share next week.

I don't have time for that. If you're that "concerned" about it I suggest you do some digging of your own.

Peace.

 

[Knightshade]

I don't have time for that.

So you have time to insist someone asking the question must not have a good grasp of Tesla financials.

And make at least 3 fairly long posts dismissing the concerns without actually addressing them...

But then when actually called out for claiming you've got some superior knowledge you suddenly "don't have time" to actually answer the question because...presumably...turns out you don't know any more than he does about it.


LOL as the kids say

 

[PeterJA]

Also not as fast as them themselves keep promising though.

They've missed their target for # of stalls, by many thousands of stalls, every single year since before Model 3 was even being sold (see #s I posted on this earlier)

At current rate (assuming they deployed a similar # in Q2 as they did in Q1) they will have just about FINALLY hit their 2018 goal by midway through 2020.... if they were slowed by the pandemic it'll be at least Q3 2020 before they hit their 2018 goal.

Tesla's goals and plans change all the time based on new information. This is agility. As @StealthP3D stated clearly, Tesla had more demand than they could handle despite their service problems and all the media FUD about it. So they spent the money and staff time on higher priority things.

I imagine management is quite aware that mainstream car buyers will be less forgiving of service problems than early adopters. I trust Tesla will cross that bridge when they come to it. They're not dumb, and they listen to customers.

So it's not my expectations they're falling short of. It's their own. By a lot.

There's no excuse at all for that apart from not having been willing to ever spend the $ to meet their own targets.

You mean no excuse apart from running the business efficiently and taking care of first things first.

 

[FrankSG]

Another ~20k Robinhood users added TSLA to their portfolios today. TSLA is now the #11 most commonly held stock on the app.

This year alone the total # of accounts holding TSLA has tripled, and there has been no large selling. Not during the COVID-19 lows, nor during new ATHs. The biggest Robinhood sell-off was 10% right after the Feb 5th high.

 

[UkNorthampton]

View attachment 561781

Europe

I think if more cars were available in Europe, they would have sold.

UK
The big months for sales in UK are March and September as the number plates change - so cars in Feb/Aug seem older than Mar/Sep. Less pronounced than it used to be though. Company car tax / Benefit In Kind means that company cars are making a comeback - but only for electric vehicles. Company cars used to be big and then tax changes meant that few people do it now, most switched to personal leasing. With 0% BIK - there will be loads of electric company cars. Biggest challenge will getting managers and bean counters to allow people to have such 'luxury' vehicles. Any company doing the maths will realise the huge benefits for the company too*. Having Supercharger network helps a lot for high mileage people and general confidence.

*For the employer - 100% First Year Allowance means that the value of the car can be written off in the first year - so reducing profit and corporation tax. National Insurance is effectively a tax similar to income tax and is often 13.8% for employers and 12% for employees (25.8% total - but it's complex). Salary sacrifice - you pay for part or all of the car's monthly cost (usually if leased) with untaxed salary (often at 40% for many Tesla drivers, but varies between 0, 20,40 and 45%). Anyone running their own company (maybe self-employed too) gets all of this - so many one-man bands can get Teslas much cheaper than ICE BMW/Mercedes etc. I can see electric vehicles (particularly Tesla Model 3 Performance) really being in demand if the UK economy is ok. However, some debate about that...

Oh yeah, and many people are on the cusp of 20% and 40% income tax rates with the chance of losing out on child benefit if over a threshold. Salary sacrifice (I think) reduces taxable and income for child benefit purposes, so a small salary sacrifice can have a big effect. Typically salary sacrifice is used for childcare vouchers (now stopped for new applicants as too popular). For cars - your company might have a £300 per month allowance but you can decide to put in an amount (£250-300?) which upgrades you from (for example) - a Leaf/Insignia to a Tesla Model 3. This will reduce your salary but you might gain on child benefit £80+/month tax free on first child, £56+ on each subsequent (approximately). So if you have 3 kids - approx £200 tax free child benefit from sacrificing £250-300 gross (perhaps £150-200 after tax).

What's the point of this - potential huge demand for Tesla Model 3 in UK

Vehicle Incentives
Benefits for All Tesla Drivers:

• £3000 plug-in grant
• Exempt from London Congestion Charge
• Access to clean air zones, including the London Ultra Low Emission Zone
• Up to £35,000 interest-free loan (Scotland only)
• Vehicle Excise Duty

Benefits of Tesla for Business:

• 0% Benefit in Kind (BiK) starting April 6th 2020
• 100% First Year Allowance
• No car fuel benefit charge
• Reduced National Insurance contributions
• Eligible for salary sacrifice schemes

 

[EcoBruin]

Are we expecting China’s June registration numbers very soon? Does anyone know when we usually see that information?

 

[Knightshade]

Tesla's goals and plans change all the time based on new information.

I'm not sure how that addresses the fact they they miss their goals every year, by large percentages, on supercharge buildouts.

What new information would cause them to decide to NOT build thousands of stalls they said they would for that year- and then state an even HIGHER target they end up ALSO missing by a mile the year after? Then doing it yet again the year after that?

This is agility.

No- it's setting a goal and then failing to spend the money to achieve it. Year after year.

But if there IS another explanation for it- what is it?

As @StealthP3D stated clearly, Tesla had more demand than they could handle despite their service problems and all the media FUD about it. So they spent the money and staff time on higher priority things.

Or they just didn't spend it at all to reduce costs.

Which appears to be the actual case.

I don't even blame them for doing it- it was touch and go for a while, and they needed to show financial progress and eventual profits.

So deciding to under-invest in things like service and charging is something I'm totally on board with being a rational decision by Tesla during the 3 and eventual Y ramps.


But that service and charging gap, which gets larger and larger each year, is not sustainable to keep increasing every year into the future.

So eventually Tesla will need to spend significantly more $ than they have been to close that gap.

THAT is the thing I'm asking about.

I imagine management is quite aware that mainstream car buyers will be less forgiving of service problems than early adopters. I trust they will cross that bridge when they come to it.

Right.

And I'm asking what that looks like- financially.

How much is that bridge likely to cost- because I don't THINK that's a genuinely insiginficant number- but I haven't seen anyone discussing future growth and cashflow address it.

You mean no excuse except running the business efficiently and taking care of first things first.

...by actively deciding not to spend money on something.

Which, again, I have -no issue with them having decided to do for years-

But they can't CONTINUE to underfund those things at that rate for ever.


It's like people are getting so mad at what they imagined my question to be saying about the past they're ignoring that it's asking a completely reasonable financial question about the future.

 

[vikings123]

Are we expecting China’s June registration numbers very soon? Does anyone know when we usually see that information?

Sometime this week, May numbers came out on June 8th morning.

 

[dakh]

Yes, I cannot justify buying these as a protective position. Too expensive.
I have been looking into buying puts on SPX (S&P500) or IWO (Russel growth 2000) with the logic that Tesla will go down only if the market goes down. In that case, money made from these puts can be used to buy more TSLA or TSLA calls.
Still trying to figure out a strategy around this.

To me it is still a bit unclear if the current run-up will stick or is this a function of the weird setup with high short interest, S&P inclusion, etc that will return back to something in the, say, 800 range when the dust settles. Tempted to sell one or two remaining options so I have a bit more cash to exercise the rest to keep the stock long term.

 

[lafrisbee]

So you’re saying buy and hold is a good strategy

putting it another way_
"They will pry my TSLA Stocks from my cold dead hand."