TSLA Market Action: 2018 Investor Roundtable

[AudubonB]

Shall we wait until we actually see the Pickup before drawing rash conclusions about some ‘unpopular weirdmobile’ and about Musk handing the electric pickup market to the incumbents?

At the very least, do the following.

EITHER
1. Demonstrate how your discussion relates to the financial fortunes of Tesla, and thus pertains at least obliquely to TSLA,

OR

2. Confine your postings to the "Tesla Pickup" thread.

 

[sundaymorning]

Musk is anti selling the truck, like he was anti selling the 3

 

[lascavarian]

Unimog as a starting place. Big, autonomous, flexible dimensionally. This beast is likely to be built around the perfecting of summon. Imagine a flexible supporting structure that is configurable with various utility extensions. 4 wheel steer maybe articulated maybe pods maybe armored maybe drone-enabled maybe tracked, vastly expanded wheel options

So many options and so exciting. It will consume the energy and excitement in the “truck” market and open a super class truck.

Perhaps beyond that is a virtuous partnership with the remains of F.

This is designed with a lot of thought to the needs of Mars. BFR will be nearing, numerous Giga factories in development. The Moon will be in active play. Exciting times - All Aboard!!

 

[Electroman]

Haven't caught up with all of this thread, so not sure if it has been posted yet. Over at Reddit someone linked the amended civil suit against Musk/Tesla on 2017 production targets. It looks like they will have dozens of former employees (including some high ranking ones) going on the record saying they told Elon his deadlines are impossible for several reasons and that cars were built by hand when he said they can be at 5k in a few months.

Document attached to this post.

Not a legal expert and have only gotten through the first 7 FEs (former employees) but in my opinion all such reasoning may "prove" is that Musk is a bad manager. He fired people who told him it can't be done and than those people turned out to be right. Maybe not even for the reasons they thought were problematic, just overall. So the company may have a bad manager but that is the sharholders' decision whether he should be fired for that or not - and they clearly think he shouldn't be.

So two additional points may be, whether he tried to conceal the difficulties and whether had made some personal gain.

On concealing difficulties, he was practically talking about "production hell" 24/7 so it is absurd to say investors had no clue.

On personal gain, I think he never sold shares in any significant quantity.

Any legal kinds care to share their opinion?

It DOES NOT matter how many employees testify they thought and they told Elon it is not possible.

It ONLY MATTERS on what Elon thought and told his internal team *and* if it matched what he told investors.

From the fired employees (and the fact they were fired) it is abundantly clear Elon believed mass production is feasible in ‘17. So there is no false reporting or intent to deceive.

And from past history it is abundantly clear Elon has always been aggressive when everyone else around him had said ‘it is impossible’.

On the other hand if he had agreed with his advisors and employees and said one thing internally and something else to the investors - then there is a case here.

 

[Right_Said_Fred]

At the very least, do the following.

EITHER
1. Demonstrate how your discussion relates to the financial fortunes of Tesla, and thus pertains at least obliquely to TSLA,

OR

2. Confine your postings to the "Tesla Pickup" thread.

Confused. Is that advice aimed at me, the person I reacted to, or the dozens of others who have been discussing the Pickup this weekend?

 

[Artful Dodger]

Let's compare to other high growth stocks
NFLX and AMZN respectively

Good idea! Let's do Apple next. The Intrinsic value of AAPL is $158 / share or 26% below the current share price of $207. Additionally, 'Apple is poor value based on expected growth next year'.

More reasons why money is steadily moving from Big Cap tech stocks to TSLA in support of its growth thesis. Onward!

Cheers!

 

[Zhelko Dimic]

Let’s settle this short squeeze debate, right now:

Elon Musk wants shorts to live in cardboard boxes.

Elon always gets what he wants.

Short squeeze secured, $420 secured, yada yada. Now buy some OTM calls*, kick back, relax, and wait for that Teslaquilla. Bet you it will come right when we hit a new ATH.

*this is an advice

That is VERY irresponsible advice or comment. Your advice is very likely to lead to something like this, quick pop, with massive loss following. I think you should be banned for this sort of advice. @AudubonB

 

[Zhelko Dimic]

...
I'm not a lawyer and I don't know how difficult it will be to prove those charges or what that would mean if they were able to prove those things. I do know that I felt confused during that period. Elon was very clear about being in production hell, but that's also different than being behind with installing manufacturing equipment. In hindsight, knowing what we know, Elon could have been more transparent about being behind schedule, rather than continuing to confirm guidance of 5,000 model 3 by the end of 2017. I'm also not a manufacturing expert, so I don't know when it becomes obvious that a stated goal is totally unrealistic. It seems that's an important consideration. Given the weight of the entities seriously investigating this stuff, as well as the lawsuits, I think it's a mistake not to assign some significant risk to this. I don't know what the risk is, but it's not zero. If the SEC or DOJ do initiate lawsuits over it, the SP will suffer greatly.

When you're Elon type, disruptor, that keeps hearing that something is impossible, just to prove it otherwise, there is no believing input that starts with 'that is impossible...'.

I've observed and had to learn this lesson myself. I'm now very careful listening to people reporting to me, when they explain how hard or impossible something is. Sometimes it's not impossible, just hard, and hiding behind it is intellectual laziness, lack of experience, lack of thinking outside of the box, or risk-awareness.

Now, when taken to extreme, there is the danger, and we've seen it play out: it makes Elon stubborn, heard of hearing, and he wouldn't accept good advice either, until he proves to himself that something is impossible.

Source of strength, source of weakness...

 

[Lessmog]

Whew. Finally caught up with thread. Thanks for all good input. Goodnight.

 

[RobStark]

Great letter.

Just one consideration. Outside the US a hilux sized vehicle is preferable. It appears that the US likes F150s or larger. Tesla would need at least two size variants to capture global ute sales.

All of North America prefers F150 sized trucks.

It is unknowable if rural China,Brazil,Russia,Scandinavia, and Australia prefer a Hilux sized truck or specifically a Hilux sized truck's fueling cost.

They might just prefer F150 sized vehicles with fueling cost below that of a Hilux over a compact electric truck with only marginally cheaper fueling cost.

 

[defc0n]

My guess is Musk doesn’t want to raise any more equity and he knows he won’t have enough capital to ramp up semi, model Y, and a large volume of pickup trucks all in the near future at roughly the same time. Thus his current truck will be some expensive niche toy.

A bit of a shame since the number 1 mission is to move the world to electric transport and high volume pickup manufacturing is an important part to make that happen. Multiple concurrent large ramps are likely deemed too risky to the company.

I personally worry a lot of the American populace that drive trucks are diehard petrol or diesel fans that wouldn’t even give an electric model a chance right now. Wonder if Ford and others think the same.

 

[RobStark]

Elon's said the first pickup will target commercial trucks in the F-650 class.

F-150 Raptor vs F-650

 

[SpaceCash]

My guess is Musk doesn’t want to raise any more equity and he knows he won’t have enough capital to ramp up semi, model Y, and a large volume of pickup trucks all in the near future at roughly the same time. Thus his current truck will be some expensive niche toy.

A bit of a shame since the number 1 mission is to move the world to electric transport and high volume pickup manufacturing is an important part to make that happen. Multiple concurrent large ramps are likely deemed too risky to the company.

I personally worry a lot of the American populace that drive trucks are diehard petrol or diesel fans that wouldn’t even give an electric model a chance right now. Wonder if Ford and others think the same.

The people who use trucks SERIOUSLY, to actually get work done, are all for whatever truck requires the least maintenance and has the best value. They will move right to electric no problem if it's a more compelling product. I know this because I used to do telesales work where many of my clients were semi drivers. I'd often ask them how they felt about Tesla semi. NONE of them seemed to have any reflexive hate for it, most were cautiously interested. Some wondered if it would work in the cold, specifically.

As for the yeehaw types, they'll come around toward electric pickups when they notice that the electric semis are ubiquitous, and when they see their more forward thinking friends jump to the guaranteed-to-be-better electric pickups. They're not hopeless cases. Show them a product that's undeniably better, and they will switch up.

 

[dandurston]

I think people are misunderstanding what Elon said about not caring about the pickup truck acceptance.

First Elon said:
I actually don’t know if a lot of people will buy this pickup truck or not, but I don’t care.

But then he immediately followed that up by saying:
I mean I do care, eventually, you know. Like sure, I care. We wanna get gasoline, diesel pickup trucks off the road.

So a literal interpretation is that he doesn't care about sales in the short term, but I don't think that's really what he meant. I think what he was trying to communicate here is that he's convinced the truck is awesome so he doesn't care of haters don't like it.

I also don't think they're doing a wierdmobile just to be weird. Elon has long being talking about some cool feature ideas he has for the truck. I think he has thought about a pickup truck from first principals and come to the conclusion that the ideal truck is different from current trucks in some fundamental ways. So it'll be different, but for functional reasons.

With that said, it's easy to mis-judge ideal functionality. Elon argues for the falcon wing doors because of improved 3rd row access (and other reasons) but obviously this comes with the cost of roof rack function, so there is a trade off. Many folks like the falcon doors, but I think it's safe to say that Elon's judgement in this area hasn't resonated with a lot of people. The falcon doors aren't a no brainer. I hope Elon is judging the trade-offs well for the pick up truck, but that is a risk. More pointedly, I would say that is the risk with the pickup truck: that Elon has ideas for new functionality that he thinks are great but no one values that highly because they aren't used to having it, and they come with the loss of existing functionality that people will miss. Elon's ideas may simply not resonate with buyers.

So yeah the truck is a risk, but I think it's safe to say that (1) Elon wants it to be a success and (2) if it fails it'll be because Elon misjudged the wants of buyers, not because he made it weird for no reason.

 

[Fact Checking]

It is unknowable if rural China,Brazil,Russia,Scandinavia, and Australia prefer a Hilux sized truck or specifically a Hilux sized truck's fueling cost.

I believe for trucks "larger is better" in all of those regions, but there's a significant GDP per capita filter there as well (large trucks are expensive), plus in some of those regions there's taxation of large trucks based on vehicle weight as well.

 

[Fact Checking]

As for the yeehaw types, they'll come around toward electric pickups when they notice that the electric semis are ubiquitous, and when they see their more forward thinking friends jump to the guaranteed-to-be-better electric pickups.

I believe the one thing Trump voter and Obama voter truck owners agree on is that they recognize a kick-ass pickup truck when they see one.

Give the truck industrial strength electric outlets with days of run time, pneumatic outlets for tooling, hydraulics to move cargo, 4 wheel steering and precision positioning, plus 360 degrees camera vision and flexible illumination of surroundings and cargo space and they'll sell like hotcakes.

I.e. electricity should be used to turn the pickup truck into a mobile factory platform.

Also Elon should use the tried and true Tesla product cycle: introduce a bigger, better equipped, more expensive pickup truck first, then introduce higher volume, smaller sized mass market versions later.

 

[KarenRei]

I believe for trucks "larger is better" in all of those regions, but there's a significant GDP per capita filter there as well (large trucks are expensive), plus in some of those regions there's taxation of large trucks based on vehicle weight as well.

There's also issues with narrow roads, narrow parking spaces, etc in many places.

 

[Artful Dodger]

Hyperchange decodes Elon's latest interview (w/o all the interruptions)

 

[Fact Checking]

Elon did a great job answering the questions. I was disappointed by her being very poorly informed and repeating the narrative again.

Yes, in particular her attempt to compare Elon's criticism of modern journalism to Trump's criticism of modern journalism was tone-deaf, she should at least have shown awareness of the stark difference between:

• Elon criticizing the press claiming that broad segments of the press are lying about Tesla and are pushing false narratives, which criticism is actually true and the lies are very damaging to both Tesla and Elon,
• Trump criticizing the press claiming that broad segments of the press are lying about him, which claim is actually false and a gas-lighting lie in itself: if Trump has one talent it is to play the mainstream press like a fiddle and choose/switch narratives. Estimates suggest Trump got billions of dollars worth of free press coverage during the 2016 election alone. Even today the mainstream press is still handling Trump with kid gloves: for example the 'lie' word is seldom uttered by mainstream journalists.

Any member of the press who doesn't understand this distinction between Elon's and Trump's criticism of the press is part of the problem I'm afraid.

 

[mongo]

Another thing Musk mentioned that made it clear that this isn't going to be a F-150 killer:

"It's going to have a lot of titanium."

Titanium costs a bloody fortune (even if you ignore the costs to machine it, which are significant). An order of magnitude more than alumium, 1 1/2 orders of magnitude more than steel.

SpaceX has titanium 3-D printers, that may bring the typical cost down...

And yeah, pulling a self supported 250k pound load is not the same as putting it your pickup's bed, my point with that was current motors have the power needed to match a one ton truck, so why limit to a half ton (beyond the material/cost difference) .