TSLA Market Action: 2018 Investor Roundtable

[Ellec]

"Not the CEO or Chairman"

45 days (likely from the recording of the order) to start undertaking the process of finding a new chairperson.

Think around the end of November, but they will be looking now and might name them within the next few weeks.

 

[ItsNotAboutTheMoney]

Ah, you're all bunch
Never watched Red Dwarf? You missed out... Season 01 is a bit slow and not at all like the following seasons, but it sets the scene. Highly recommended up to season 07, after which it went to smeg...

FTFY.

(I don't count, I'm from the UK).

 

[dqd88]

Facebook stock doesn’t know what it wants to do right now in after hours. I think it may set the tone for macros tomorrow.

If facebook were smart they would acquire twitter or yelp or snap. They need to own some more social outfits to round out their portfolio and build a stronger position in the world. Not that I think snap is great, but put it under facebook and their sales and tech teams could probably pour some fuel on the fire.

To stay on topic - Tesla will replace FB in FANG -- > TANG

 

[dgodfrey]

Marked "funny" because it made me giggle thinking about how angry die-hard petrol heads will be about this. Picture your average Jaguar owner having to drive 100kph and Teslas blowing past them at 130kph, perfectly legally. They'll be fuming so much that they fog up the windscreen But seriously, that's a great way to convert people to electric!

And perfectly logical - not just from an emissions standpoint, but also safety. As Tesla has amply demonstrated.

This should have been how the Feds jump starts the adoption of EV's. Could you imagine how sales would have taken off if allowed the 20mph over posted speed limit? We wouldn't give a flying fig what the range was, how to charge on a trip, what do I pay per kWh? And you wouldn't have to listen to the whining of the heavily subsidized, FF burning, coal rolling, where's my tax credit crowd. Would cost the taxpayer absolutely nothing. Brilliant I say.

 

[avoigt]

Troy made an interesting calculation predicting the MR has only 1.8% less GM.

That can easily be compensated if not exceeded by further production and efficiency improvements beside others which come into play in Q4.

If that turns out to be true than we have a MR that will have even higher demand triggered by lower price point (price elastic curve) and more units produced if battery supply and pack production is a constraining factor. Higher demand in Q4 is important as deliveries are still NA only. If thats (Battery & pack supply) not the constraining factor it still may apply as further production efficiencies will happen in Q4 on the way to 10k/w in 2019.

Its feasible therefore that revenue and profits are much higher in Q4 if my assumptions are correct and not flat. That supports my thesis that Tesla is heading to break even or small profit for 2018. In that model Tesla did gave a low guidance for Q4 and its on the way to overachieve. Latest 62 k VIN registrations in October alone are also pointing in that direction.

"In terms of gross margins, after the latest price adjustments, the Model 3 MR has only 1.8% worse gross margins than the LR. Here are the details of my calculation:



Tesla starts production of the Model 3 Mid Range - Teslike.com

 

[neroden]

You are simply mistaken (and it might be appropriate to discontinue posting your assertion because it likely misleads other readers who don't bother to read the filings.)

There are numerous sentences in the 2013 offering prospectus that explicitly state the Tesla not only could, but likely would, use cash to settle the principal of the 2018 notes. http://ir.teslamotors.com/static-files/15dd3b3e-95a7-4a39-a7c2-94d90fdb112c

You're right on this one, I'm wrong; the 2018s had the option of being fully cash-settled. Weirdly, they *didn't* have the option of being fully share-settled (which the later notes do); I guess I got it reversed in my head. Or I was thinking of the SolarCity convertibles. No two of these notes have exactly the same terms, so I get them mixed up. :sigh:

For whatever reason, Tesla departed in 2017 from using cash to settle the principal by entering into private bi-lateral agreements with those holders.

I can't be sure, but I'd bet they were getting out from under the warrant exposure. Tesla was, as I said, directly exposed to the warrants.

You are also wrong about that, too. The warrant strike price was $184.88/share.

In fact, I'm right about that, as you just confirmed. Tesla traded over $184.88 for nearly all of 2016 and for the whole of 2017. The warrants were in-the-money for all of 2017, meaning that Tesla didn't have much choice but to issue shares for the warrants -- unless they could buy the warrants back.

They ended up making a private deal to buy them back for shares, of course, which is what they did.

 

[electracity]

If Tesla unveils a reasonably priced pick-up with realistic way to bring to market in volume and ford still has no battery supply lined up, that is when I would consider shorting Ford. I would say the latter condition is likely in the next couple of years and I am less sure about the former condition from what we have seen so far.

Ford has a lot of cash and not a lot of debt. They have said they are spending $11 billion on EV over the next four years, and their financials support making that kind of investment. The question is whether Ford as well as other traditional auto manufacturers will make the right choices.

I think what Tesla will come out with is their first version of the light duty truck with an open bed. Musk will call that a pickup. But as a cab forward vehicle it's as much of a van as it is a pickup. So the second vehicle is a van. There is overlap between a pickup with a cap and a van. So I don't see why Tesla would not design to address both markets. Also, the pickup is very North American centric, and Tesla is certainly planning to design world vehicles.

They could also do a more true SUV on that design. As the Suburban and Expedition and are often historically F150 based. A bigger and less girly "SUV" than the model X would find buyers.

 

[gringotuanis]

I’m just trading it since it was oversold in my opinion. Looking like a FAANG / Nasdaq recovery is quite likely tomorrow. Yes we are all getting tired of hearing that.

What is this place you speak of?

 

[ZachF]

If facebook were smart they would acquire twitter or yelp or snap. They need to own some more social outfits to round out their portfolio and build a stronger position in the world. Not that I think snap is great, but put it under facebook and their sales and tech teams could probably pour some fuel on the fire.

To stay on topic - Tesla will replace FB in FANG -- > TANG

Instagram stories are already beating snap at their own game pretty much.

The problem with Facebook is that it's business model is structured around data harvesting, and it already does some quasi-shady sugar to get it. Facebook is at "peak Facebook" because the harder it pushes with more and more shady data-harvesting practices, the more (active) users it'll lose, and the less overall data it can harvest.

Younger people are already ditching Facebook, and let's not all forget how fast MySpace died.

 

[ZachF]

Ford has a lot of cash and not a lot of debt. They have said they are spending $11 billion on EV over the next four years, and their financials support making that kind of investment. The question is whether Ford as well as other traditional auto manufacturers will make the right choices.

I think what Tesla will come out with is their first version of the light duty truck with an open bed. Musk will call that a pickup. But as a cab forward vehicle it's as much of a van as it is a pickup. So the second vehicle is a van. There is overlap between a pickup with a cap and a van. So I don't see why Tesla would not design to address both markets. Also, the pickup is very North American centric, and Tesla is certainly planning to design world vehicles.

They could also do a more true SUV on that design. As the Suburban and Expedition and are often historically F150 based. A bigger and less girly "SUV" than the model X would find buyers.

Uh, Ford has ~$160 billion in debt, and they've added ~$50 billion in the last 6 years.
Ford Motor Co Total Long Term Debt (Quarterly) (F)

It's one of the few automakers that has long term debt > revenue.

 

[gringotuanis]

Ford has a lot of cash and not a lot of debt. They have said they are spending $11 billion on EV over the next four years, and their financials support making that kind of investment. The question is whether Ford as well as other traditional auto manufacturers will make the right choices.

I think what Tesla will come out with is their first version of the light duty truck with an open bed. Musk will call that a pickup. But as a cab forward vehicle it's as much of a van as it is a pickup. So the second vehicle is a van. There is overlap between a pickup with a cap and a van. So I don't see why Tesla would not design to address both markets. Also, the pickup is very North American centric, and Tesla is certainly planning to design world vehicles.

They could also do a more true SUV on that design. As the Suburban and Expedition and are often historically F150 based. A bigger and less girly "SUV" than the model X would find buyers.

Does anyone buy vans anymore? I don't see any.

 

[dqd88]

Younger people are already ditching Facebook, and let's not all forget how fast MySpace died.

FB lost its coolness years ago.
Where else are people going to go? At the end of the day there are only so many platforms. You can count them on one hand.

 

[neroden]

Instagram stories are already beating snap at their own game pretty much.

The problem with Facebook is that it's business model is structured around data harvesting, and it already does some quasi-shady sugar to get it. Facebook is at "peak Facebook" because the harder it pushes with more and more shady data-harvesting practices, the more (active) users it'll lose, and the less overall data it can harvest.

Not to mention the other response: the injection of false data. Google's been fighting that for years and has some expertise; Facebook has no expertise at it.

Younger people are already ditching Facebook, and let's not all forget how fast MySpace died.

 

[ZachF]

Not to mention the other response: the injection of false data. Google's been fighting that for years and has some expertise; Facebook has no expertise at it.

True.

Also, I have not seen evidence that Zuckerberg is able to pivot/expand into other business ventures the way Musk/Jobs/Bezos/Page/Brin have. When he has done so he's mostly failed, and kind of just milked the FB model even harder. He really seems like a one trick pony, unlike the others above who have been able to identify and exploit new ventures for their businesses multiple times.

 

[electracity]

Does anyone buy vans anymore? I don't see any.

Commercial van sales in the U.S. is maybe 30,000/month?

 

[avoigt]

Ford has a lot of cash and not a lot of debt. They have said they are spending $11 billion on EV over the next four years, and their financials support making that kind of investment. The question is whether Ford as well as other traditional auto manufacturers will make the right choices.

I think what Tesla will come out with is their first version of the light duty truck with an open bed. Musk will call that a pickup. But as a cab forward vehicle it's as much of a van as it is a pickup. So the second vehicle is a van. There is overlap between a pickup with a cap and a van. So I don't see why Tesla would not design to address both markets. Also, the pickup is very North American centric, and Tesla is certainly planning to design world vehicles.

They could also do a more true SUV on that design. As the Suburban and Expedition and are often historically F150 based. A bigger and less girly "SUV" than the model X would find buyers.

Everybody talked and talks about how difficult and costly it is to build a new Auto company. 50 failed in the last about 60 years.

Thats true but there is one thing that is in my eyes on the same level if not even more difficult and that is to metamorphose an ICE manufacturer into an EV producer. I have not seen one succeeding yet.

Its not only that you have to build all what Tesla has build from scratch you also need to replace, integrate or get rid off all what you had before be it labour, production, supply chain or Management. There are no real synergy's. That will costs you a ton of money and time.

The latest ad from Ford give all of us a very good understanding that all starts with your mind set. If your are staying in front of a challenge the worst that can happen is not to fail but to not understand what the challenge is about but you strongly believe you do.

Some of you may remember the BMW ad from a while ago where they tried to joke that you can buy an EV from BMW now instead of waiting for a Tesla. That fired back badly ....

BMW didn't understand what they had in front of them and even thought they can make jokes. Now they stopped laughing.

 

[AndyH]

Does anyone buy vans anymore? I don't see any.

Europe is filled with them. They're everywhere but they're usually quite small though.

 

[electracity]

Uh, Ford has ~$160 billion in debt, and they've added ~$50 billion in the last 6 years.
Ford Motor Co Total Long Term Debt (Quarterly) (F)

It's one of the few automakers that has long term debt > revenue.

You need to look at the maturities and the cash flow to support the debt. Unless you think that Tesla is going to own the F150 market in the next couple of years.

Ford has a good U.S. business. But they have screwed up China, and there isn't much confidence that they will make good future decisions. I'm sure the large number of Ford heirs living off their 6.5% dividend doesn't help in establishing the belief that they will make the hard choices.

 

[Drumheller]

This should have been how the Feds jump starts the adoption of EV's. Could you imagine how sales would have taken off if allowed the 20mph over posted speed limit? We wouldn't give a flying fig what the range was, how to charge on a trip, what do I pay per kWh? And you wouldn't have to listen to the whining of the heavily subsidized, FF burning, coal rolling, where's my tax credit crowd. Would cost the taxpayer absolutely nothing. Brilliant I say.

In Arizona, EVs receive the blue license plate on the car and can use the HOV lane at all times with no restrictions. That's a nice perk when crossing Phoenix. I think a nationwide 10 mph increase on interstates for EVs would be a good incentive. However, I don't think that the Federal gov't can mandate that. I think that falls to state rights.

 

[Brando]

In the Netherlands, this issue is also addressed by fast charging company Fastned. In their opinion it's more economical to serve the households without access to home charging with fast chargers instead of having millions of public AC charging poles. Maybe not as convenient as just plug, charge, walk home and pick up your car when you are ready to go, but it takes away the need to find a public AC charging pole, either at home or at destination.

What i do see in my area is that the increase in number of BEV vastly outpaces the increase of public charging poles. And i do expect that discrepancy to grow. For me it is more then "just a nice to have" that a BEV can charge on the Chademo or CCS network.

For further reference, Fastned slightly addresses the issue on page 3&4 of the document below ("faster charging drives costs down & serving those who do not have their own driveway"):
http://static.fastned.nl/uploads/documents/fastned-freedom-plan.pdf

Even less on topic, the roll out of their network goes substantially slower then stated in the linked document. And i wouldn't take their charted plan to come to every European country too serious, I think things have changed in all countries since the document was made. But as far as i'm concerned it's sufficient already for my part of the Netherlands For full disclosure, i do have some shares in that company, which may or may not interfere with my view of the matter.

e-bikes I bet there are many and of course regular bikes as we all assue - still true?
How about tri-cycles with weather proof coverings?