TSLA Market Action: 2018 Investor Roundtable

[shlokavica22]

The EV transition is going to get much uglier before it gets better, I think. I hope I'm wrong!

You are not wrong I'm afraid.
It doesn't matter that the EV supply is limited. What matters is the growing demand.
ICE manufacturers hope that the moment customers see the supply is limited, they will simply buy ICE car and that's it. But it does't happen that way. More and more people learn the reality of EV, test drive Tesla cars and eventually postpone their purchase until EV (Tesla) product is available. Sure some of them make the decision based on economics and if the ICE cars drop enough in price, they still will buy, but either way- it leads to the demise of the Big Auto.

 

[Artful Dodger]

Not totally. Initial sales could be to customers with routes that were willing to install on-site chargers and had routes that fit with the capacity of the battery. That would help get more testing, and capital, before ramping up production and Megacharger installations.

Well fudge, it was a mistake to add my EDIT. Work with me here people: Tesla is BATTERY constrained. Yesterday, Elon tweeted:

What really matters is time to volume production, not initial market intro. Apart from brief moments, Tesla vehicle production is limited by total battery output.

The OP (who did not respond to my "Batteries Not Included" comment) also said "keeping Semi on track to deliver hundreds to large clients who have already put in deposits, is not going to reduce the time needed to ramp up and mass produce Y."

That's NOT the point. The POINT is that while Tesla is battery constrained, every battery cell allocated to Semi production is a battery cell diverted from Model 3/Y production

The OP doesn't mention that '100s of Semis' use about the same number of battery cells as 1,000s of Model 3s.

Each new (enhanced) Panasonic battery line at GF1 adds about 3GWh capacity per year. That's enough for about 5,000 Semis with the smaller pack size.

That 3 GHh/yr could provide cells for about 45,000 LeM3Rs generating about $440M in gross profit (given Q3 gross margins).

That's the opportunity cost. Tesla will start building Semis in meaningful volumes as soon as battery supply constraints allow, but don't expect Tesla to starve the profitable Model 3 line (or new lines at GF3/Shanghai) to build Semis.

Should I mention that GF1 doesn't currently have a battery line producing cells for Powerwall / Powerpack, and is buying and importing Samsung SDI cells for Tesla storage products? Or that Megapack is coming?

TL;dr: Tesla is battery cell constrained.

 

[sundaymorning]

UBS appears to have reversed their stance on TSLA

The SEC should investigate UBS for wrongful estimations. Then sophena every analysts who were wrong about Tesla.

Anybody here trust a finaincial company with “BS” in its name? Might as well call themselves “WeBS”’instead of “YouBS.”

 

[shlokavica22]

We have to remember that Elon plans well ahead. When considering Model Y, or Semi first we have to consider also the long term effect.
Elon is very confident in the rapid Self-Driving improvements coming soon, meaning any Model 3/Model Y becomes additional revenue stream. That can't be said for the Semi/Roadster/Pick Up.

In addition, I think the Semi/Roadster rely on battery tech in development, while the Model Y will rely on battery tech already in mass production. I reached this conclusion when listening to one of Elon's recent interviews- he said something along the lines "We can produce the Semi/Roadster already, but it will be too heavy".

So overall I think the order of the upcoming products, tweeted by Elon, is the order they intend to follow.

 

[erha]

today will be attack on the 52wks low for NASDAQ, wondering if it will hold or crack. Interesting times we have anyway

We still need a 5.6% drop to reach 52 week low... Don't think that will happen today.

 

[Causalien]

This article tells us that Model 3 sales accounted for 52% of US luxury sedan sales in the U.S. in October.

It also details that the Model 3 generally expanded the market, only eating up ~15% of previous year's sales.

I gather that this means it stimulated a whole class/type/demographic of purchaser that wasn't going to buy ANY car, but the 3 pushed them to do so.
I haven't had a car since moving to L.A. maybe 5 yrs ago (rear wheel drive Lincoln LS V8, loved that thing), and I have since said I wouldn't get another car until I can afford a Tesla. I wonder if there are many like me who were already in-the-know and waiting for a Tesla they could afford, or if the 3 simply caught THAT many people by relative surprise and convinced them to pull the trigger who otherwise wouldn't have been in the market for a car.

Actually thinking about it further, it's probably better explained that the newer buyers would have otherwise purchased cheaper, non-"luxury" sedans, and have decided to splurge/stretch their wallet for the 3
Tesla Model 3 Accounted For Over Half Of All Midsize Luxury Car Sales

Ya, I am part of the expanded market. Never considered buying cars and juat uber/taxi or rent from Hertz if I need something for a few days. It's still cheaper than owning and I don't have to spend time on maintenance.

The tesla experience is simply wirth the extra cost even if I am not reaping any savings because I am not commuting daily.

 

[shlokavica22]

That's NOT the point. The POINT is that while Tesla is battery constrained, every battery cell allocated to Semi production is a battery cell diverted from Model 3/Y production

Essentially meaning, what is the max margin we can get from any KW put into a product? And my guess is that Model Y will give a better margin/KW than Semi.

 

[Artful Dodger]

UBS on $TSLA profitability: "Contrary to our team's previous view, they now believe incumbent OEMs will be less profitable than Tesla in EV space. Tesla's cost advantage can be defended (at least temporarily) because other OEMs will not switch to cheaper NCA chemistry. "

The big take away is that a bearish analyst is changing views. UBS has/had a sizable short position. Wall Street is slowly becoming bullish

 

[Tslynk67]

Asia is down, all red, nasdaq futures are red. Today is going to be a very ugly day I guess, whysoever.

Pre-Market:

Nvidia -3%
Netflix -1.7%
Amazon -2%
Apple -1.4%
Tesla -1%

So not as bad as the others...

Stocks were overheating over the last year, so this correction is timely. Nevertheless, the severity and duration is quite surprising.

 

[KarenRei]

The SEC should investigate UBS for wrongful estimations. Then sophena every analysts who were wrong about Tesla.

Anybody here trust a finaincial company with “BS” in its name? Might as well call themselves “WeBS”’instead of “YouBS.”

U... Ubiquitous? Universal? Ugly? Ulterior? Ultra? Unadulterated? Unapologetic? Uneducated? Union? Unsophisticated? Unwelcome? Utmost? Utter?

 

[KarenRei]

Pre-Market:

Nvidia -3%
Netflix -1.7%
Amazon -2%
Apple -1.4%
Tesla -1%

So not as bad as the others...

Stocks were overheating over the last year, so this correction is timely. Nevertheless, the severity and duration is quite surprising.

Better to have a correction sooner rather than later. I for one am glad to see it.

 

[shlokavica22]

Nevertheless, the severity and duration is quite surprising.

That's my worry now. I have 0 doubt in TSLA's capabilities, but the macro makes me consider re-shifting my options positions.

Especially when I read something like this Option_Sniper on Twitter

"ok let me say it clearly with no confusion - it means big $$ is selling in panic mode, NOT buying on dip"

 

[gora321]

Just added few more shares and narrowed exit gate a bit

 

[Tslynk67]

today will be attack on the 52wks low for NASDAQ, wondering if it will hold or crack. Interesting times we have anyway

 

[Artful Dodger]

Pre-market looking a tad peckish for the NASDAQ-100 this morning at 05:24 am:

 

[Tslynk67]

That's my worry now. I have 0 doubt in TSLA's capabilities, but the macro makes me consider re-shifting my options positions.

Especially when I read something like this Option_Sniper on Twitter

"ok let me say it clearly with no confusion - it means big $$ is selling in panic mode, NOT buying on dip"

Now there's the benefit of being all-in on $TSLA - it's bloody hard sometimes, but they're the only obvious stock with a 20x upside from here with little risk. It's a slam-dunk for me and I don't see any reason why I would waste money investing elsewhere.

 

[jbih]

Essentially meaning, what is the max margin we can get from any KW put into a product? And my guess is that Model Y will give a better margin/KW than Semi.

Assuming Model Y with 80 kWh and Semi with 1000 kWh. Further assuming a similar gross margin for both and a average selling price of $55000 and $170000, that would be $687 in revenue per kWh for the Model Y and $170 for the Semi.

So revenue per kWh is much better for the Y.

Edit: Source for 1000 kWh estimate: Tesla Semi truck's battery pack and overall weight explored

 

[Mich]

Do we know why and how long Tesla's growth is battery constraint? And what growth can we expect from the cell production?

Is it just a scaling, capital and ramp topic or is it constraint because of raw materials?

 

[KarenRei]

Assuming Model Y with 80 kWh and Semi with 1000 kWh. Further assuming a similar gross margin for both and a average selling price of $55000 and $170000, that would be $687 in revenue per kWh for the Model Y and $170 for the Semi.

So revenue per kWh is much better for the Y.

Edit: Source for 1000 kWh estimate: Tesla Semi truck's battery pack and overall weight explored

To repeat: the reason for getting Semi out soon isn't to maximize short-term revenue. It's because they need to start work through fleet trials ASAP if they want to be starting big fleet-replacement sales 1-2 years later.

 

[Mich]

Do we know why and how long Tesla's growth is battery constraint? And what growth can we expect from the cell production?

Is it just a scaling, capital and ramp topic or is it constraint because of raw materials?

This is a critical question for all price targets.

We know Elon said the Teslas growth is not capital constraint but battery constraint going forward. Is the positive or negative? I would assume the cell output can be scaled be adding more lines/capital and source more raw materials.