Thoughts on TESLA

[misanman]

I know that Seeking Alpha writers often don't get a lot of respect here, so this is offered FWIW:

https://seekingalpha.com/article/4240781-tesla-model-3-drives-demand-cliff?li_source=LI&li_medium=liftigniter-widget

Things look set to get increasingly bad for Tesla in 2019. With the U.S. and Canadian order backlog exhausted, the steady-state demand rate is far below the 5,000 units per week Musk has claimed the North American market could absorb. The "gutting" of its US delivery team offers further strong evidence that the recent demand drop is a secular decline, and not merely the result of product being shipped abroad.

At the same time, the relatively soft demand in Europe and China compounds the conclusion that the Model 3 is essentially demand constrained at a volume far below market expectations. That is a big problem for a company priced for huge growth.

 

[gamboolman]

just saying.....

 

[Running_Man]

https://twitter.com/x/status/1096306241167654912

Charlie Munger on Elon Musk

 

[kcowan]

Vancouver EV startup
I was going to post this on the EV thread but it seems to have disappeared? Hey mods is there another thread I am missing?

 

[NW-Bound]

I looked, and that thread is still there, but got closed.

And this 3-wheeler was brought up earlier, on this thread I believe. It's a bit small vehicle for the American market, whose consumers like gargantuan vehicles.

In the future when oil runs out, people will feel fortunate to have a personal vehicle, no matter what size. I don't know when that will be.

 

[kcowan]

Yes they seem to be going after the commuter market. For sure not the shopping trips market!

 

[bobandsherry]

https://electrek.co/2019/02/18/tesla-standard-model-3-battery-website-fans-panic/

 

[oneill225]

2019 Projected Sales

2019 shaping up to be a big year for Tesla. From the article:

"There are an estimated 100,000 reservations outstanding in Europe, which should be enough to keep the party going for some time. And there are plenty of US reservation holders still waiting for their promised $35,000 Model 3, which Tesla hopes to deliver in four to six months."

https://insideevs.com/tesla-model-3-sales-2019-estimation-guidance/

 

[ERD50]

2019 shaping up to be a big year for Tesla. From the article:

"There are an estimated 100,000 reservations outstanding in Europe, which should be enough to keep the party going for some time. And there are plenty of US reservation holders still waiting for their promised $35,000 Model 3, which Tesla hopes to deliver in four to six months."

https://insideevs.com/tesla-model-3-sales-2019-estimation-guidance/

From your link:

In Tesla’s fourth-quarter shareholder letter, the company said it expects to deliver between 360,000 and 400,000 vehicles in 2019, which would be an increase of 45% to 65% compared to 2018.

Is this a realistic forecast? Daniel Sparks, writing in The Motley Fool, believes Tesla is “approaching its guidance conservatively this time.” Reaching the midpoint of the forecast range wouldn’t require a significant increase in the rate of production – to deliver 364,000 vehicles in 2019, the company only needs to maintain the rate of deliveries it achieved in Q4 2018.

Tesla was late in hitting those Q4-2018 numbers. To provide guidance for 2019 numbers that are only at (or slightly above) their Q4-2018 run rate does not strike me as very exciting. All we have been hearing about from some posters here is "growth, growth, growth!".

Sure, it is an increase over the full year 2018, but since that ramp was delayed, that isn't saying much. And many of those US reservations are holding out for a $35,000 base model, and facing dwindling tax credits - not a good combo at all. Their out of pocket costs go up every 6 months.

I suspect that Tesla is hoping that they can bring down costs while they feed the higher tier models to the new markets. If they can do that, they can sell a base model to the US as overseas high tier demand rolls off. Big if. Very big if.

Funny how some commenters switch between claiming we need to ignore the Musk hyperbole and inflated promises, but then we see these comments on how Musk has suddenly turned conservative in guidance. Did this leopard change his spots?

-ERD50

 

[oneill225]

Tesla was late in hitting those Q4-2018 numbers. To provide guidance for 2019 numbers that are only at (or slightly above) their Q4-2018 run rate does not strike me as very exciting. All we have been hearing about from some posters here is "growth, growth, growth!".

Sure, it is an increase over the full year 2018, but since that ramp was delayed, that isn't saying much. And many of those US reservations are holding out for a $35,000 base model, and facing dwindling tax credits - not a good combo at all. Their out of pocket costs go up every 6 months.-ERD50

"Growth" is measured in more ways than production rate. While producing and selling 400,000 cars in 2019, Tesla will also be completing construction of another Gigafactory in China. That plant should (at least) double production capability.

Tesla will also unveil several new products over the course of 2019, including the Model Y cross-over. Many predict that this will be much more popular than the Model 3. The electric semi is also nearing production. All of these projects will require "growth" in production capability and infrastructure.

The larger point is that Tesla is in a great spot to prosper in the coming years. As you point out, there are still many headwinds holding the stock back, but as Tesla continues to grow and succeed, those headwinds will clear and the stock will benefit.

This is the time to consider buying Tesla. The largest gains will occur over the next year or two as EV adoption continues to gain momentum (globally) and ICE vehicle sales start to wane in ever-increasing percentages.

 

[Hamlet]

2019 shaping up to be a big year for Tesla. From the article:

"There are an estimated 100,000 reservations outstanding in Europe, which should be enough to keep the party going for some time. And there are plenty of US reservation holders still waiting for their promised $35,000 Model 3, which Tesla hopes to deliver in four to six months."

https://insideevs.com/tesla-model-3-sales-2019-estimation-guidance/

Any idea where that 100,000 reservation estimate came from?

 

[oneill225]

Any idea where that 100,000 reservation estimate came from?

No idea.

 

[ERD50]

Quote:
Originally Posted by ERD50 View Post
Tesla was late in hitting those Q4-2018 numbers. To provide guidance for 2019 numbers that are only at (or slightly above) their Q4-2018 run rate does not strike me as very exciting. All we have been hearing about from some posters here is "growth, growth, growth!".

Sure, it is an increase over the full year 2018, but since that ramp was delayed, that isn't saying much. And many of those US reservations are holding out for a $35,000 base model, and facing dwindling tax credits - not a good combo at all. Their out of pocket costs go up every 6 months.-ERD50

"Growth" is measured in more ways than production rate. While producing and selling 400,000 cars in 2019, Tesla will also be completing construction of another Gigafactory in China. That plant should (at least) double production capability.

Tesla will also unveil several new products over the course of 2019, including the Model Y cross-over. Many predict that this will be much more popular than the Model 3. The electric semi is also nearing production. All of these projects will require "growth" in production capability and infrastructure.

The larger point is that Tesla is in a great spot to prosper in the coming years. As you point out, there are still many headwinds holding the stock back, but as Tesla continues to grow and succeed, those headwinds will clear and the stock will benefit. ....

If you want to say they are positioning themselves for future growth (2020 and beyond), OK. But the article you linked was about 2019 sales, it is titled: "Tesla Model 3 Sales: How Many Will Tesla Sell In 2019?" Again, 2019.

So I stand by my comments that projecting 2019 car sales that are about on par with their Q4-2018 production rate (which was far below Tesla's own projections) just is not exciting. And once again, instead of addressing that point, you deflect to a bunch of other measures that were not part of the article that you yourself linked.

... This is the time to consider buying Tesla. The largest gains will occur over the next year or two as EV adoption continues to gain momentum (globally) and ICE vehicle sales start to wane in ever-increasing percentages.

Well, in the almost 2 years since this thread was started (4/4/2017) with the question of buying more TSLA, it hasn't been a good buy. TSLA barely up ~ 0.64%, with SPY total return > 22%. Will the next year or two be different? Maybe.

Stay tuned.

-ERD50

 

[aja8888]

Musk's recent CNBC interview

Elon Musk: Tesla will have all its self-driving car features by the end of the year:

https://www.cnbc.com/2019/02/19/elo...ving-car-features-by-the-end-of-the-year.html

The entrepreneur made the comment on a podcast with Cathie Wood and Tasha Keeney of ARK Invest, a firm that owns shares in the company. Tesla's automated driver assistance system Autopilot has garnered both positive attention for the sophistication of its features and negative attention for its association with a number of high-profile accidents.

"I think we will be feature complete — full self-driving — this year," Musk said. "Meaning the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention, this year. I would say I am of certain of that. That is not a question mark."

Is he trying to push the stock price up?

 

[bobandsherry]

Elon Musk: Tesla will have all its self-driving car features by the end of the year:

https://www.cnbc.com/2019/02/19/elo...ving-car-features-by-the-end-of-the-year.html

Is he trying to push the stock price up?

You should have listened to the interview with the chick from ARK. She says ARK has a $4,000 target on Tesla - largely due to the autonomous factor. You read it here, so be sure to load up on Tesla tomorrow - next stop $4,000/sh, ARK says so.

Here's list of trades they've made for their clients, so a little view into what they consider the market leaders of the future. Interestingly, they have lots of "sells" on TSLA during the past year. So even they considered it over priced.

https://ark-invest.com/wp-content/trades/ARK_Trades.pdf

 

[aja8888]

You should have listened to the interview with the chick from ARK. She says ARK has a $4,000 target on Tesla - largely due to the autonomous factor. You read it here, so be sure to load up on Tesla tomorrow - next stop $4,000/sh, ARK says so.

Here's list of trades they've made for their clients, so a little view into what they consider the market leaders of the future. Interestingly, they have lots of "sells" on TSLA during the past year. So even they considered it over priced.

https://ark-invest.com/wp-content/trades/ARK_Trades.pdf

I saw the target price in the article.....Yes, I am going to load up on TSLA tomorrow after I liquidate all my Vanguard and Fidelity retirement funds.....Then I am going to take DW to the islands for a month's vacation.

I may even buy a new Corvette when I get back.

 

[oneill225]

So I stand by my comments that projecting 2019 car sales that are about on par with their Q4-2018 production rate (which was far below Tesla's own projections) just is not exciting. And once again, instead of addressing that point, you deflect to a bunch of other measures that were not part of the article that you yourself linked.-ERD50

Looking at the bigger picture is a good thing, not a deflection.

 

[ERD50]

Looking at the bigger picture is a good thing, not a deflection.

They are not mutually exclusive:

A) Looking at the big picture is good.

B) When you post an article about 2019 sales, your responses should stick to 2019 sales. Anything else is a deflection.​

-ERD50

 

[ERD50]

Elon Musk: Tesla will have all its self-driving car features by the end of the year:

https://www.cnbc.com/2019/02/19/elo...ving-car-features-by-the-end-of-the-year.html


Is he trying to push the stock price up?

"I think we will be feature complete — full self-driving — this year," Musk said. "Meaning the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention, this year. I would say I am of certain of that. That is not a question mark."

I can hardly wait for NW-Bound to chime in on this one!

If you read Musk's follow up comments, there appear to be lots of question marks?

"However," he added, "people sometimes will extrapolate that to mean now it works with 100 percent certainty, requires no observation, perfectly. This is not the case."

Sure. One must consider human nature. If you tell someone that "the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention,...", well, then people will do that and get on their smartphone, text, watch a movie, make out, make up, and who knows what.

However within two years, the technology ought to be there for cars to operate without any help from a driver at all.

"My guess as to when we would think it is safe for somebody to essentially fall asleep and wake up at their destination? Probably towards the end of next year," he said. "That is when I think it would be safe enough for that."

Oh, OK, not perfect in one year. Perfection will take two years!

And then... the big cop-out:

In addition, the speed at which the technology makes it into the hands of customers depends on what regulators will allow, Musk added.

So 'we could do it, but those mean old pesky regulators (bought and paid for by the oil industry!) wouldn't let us. They said we had to prove it was safe!'.

Oh boy. I think I'll mark my calendar - Feb20-2021: "Don't go to the DMV to renew driver license, buy a fully autonomous Tesla instead." And sell shares of TSLA for $4,000.

-ERD50

 

[bobandsherry]

I can hardly wait for NW-Bound to chime in on this one!

If you read Musk's follow up comments, there appear to be lots of question marks?


Sure. One must consider human nature. If you tell someone that "the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention,...", well, then people will do that and get on their smartphone, text, watch a movie, make out, make up, and who knows what.




Oh, OK, not perfect in one year. Perfection will take two years!

And then... the big cop-out:


So 'we could do it, but those mean old pesky regulators (bought and paid for by the oil industry!) wouldn't let us. They said we had to prove it was safe!'.

Oh boy. I think I'll mark my calendar - Feb20-2021: "Don't go to the DMV to renew driver license, buy a fully autonomous Tesla instead." And sell shares of TSLA for $4,000.

-ERD50

There was discussion on CNBC regarding the autonomous drive comment by Musk. There's a difference when the car may have the functionality (and I have my doubts that Tesla can do that by end of year, but I digress), and when the government would allow that.

 

[NW-Bound]

I can hardly wait for NW-Bound to chime in on this one!

If you read Musk's follow up comments, there appear to be lots of question marks?

You rang?

Well, it's just Musk's BS as usual.

My translation of his statement: "Our autopilot will be autonomous, in the sense that it will work sometimes. And if you don't pay attention and you die, it's your own fault".

It's boring. Same old BS. Just some hollow promises to drum up sales for his cars.

If he keeps this up, I may have to be a bit more involved, meaning shorting his stock.

 

[bobandsherry]

Tesla is preparing to offer Model 3 leasing to boost demand

From a positive on this, it should increase demand.

From a negative, this is a divergence from their prior path and would seem to indicate that demand is not as strong as Tesla had been indicating. Also, why did Tesla let go a significant portion of the delivery team? No indication as to who will fund the lease financing. If financed internally then this will be a drag on future earnings.

But could be Tesla is only testing the waters, or trying to manipulate their stock price, as this is currently only expressed as being available for employees. I just wonder if Tesla offers employees any discounts to by a Tesla (other manufacturer's such as GM and Ford do).

 

[bobandsherry]

Well, in the almost 2 years since this thread was started (4/4/2017) with the question of buying more TSLA, it hasn't been a good buy. TSLA barely up ~ 0.64%, with SPY total return > 22%. Will the next year or two be different? Maybe.

Stay tuned.

-ERD50

Yeah, and as I mentioned earlier it's not just S&P comparison, but look at how GM performed over that same time period.

While all the discussion on how good/bad the Tesla car is or isn't, and how good/bad Musk is as CEO, and what the future will or won't be for Tesla, I find it interesting to reflect back on the original post, way back on April 4, 2017:

Most of the advise then was to avoid, and looking back that was pretty sound advice. While Tesla has bounced around, it's largely unchanged in that time period, from $302 to $312, about only 1.5% annual return over almost the 2 year period, gain of only $1,000 on 100 shares purchased.

By contrast investing in GM would have been better investment, up about 12% annual return. And investing in S&P 500 fund would have returned over 15% annual return, all with much less risk.

So risk/reward with Tesla has not paid dividends since the original question by the OP and would clearly have been $$ ahead by putting into stodgy old S&P fund.

 

[bobandsherry]

No indication that this is negative news, but minimally it's that the Tesla's general legal counsel felt Tesla wasn't the right fit and leaves after 2 months. But is this a case where he was shocked at what he found while there?

Tesla replaces general counsel Dane Butswinkas after two months

 

[Hamlet]

No indication that this is negative news, but minimally it's that the Tesla's general legal counsel felt Tesla wasn't the right fit and leaves after 2 months. But is this a case where he was shocked at what he found while there?

Tesla replaces general counsel Dane Butswinkas after two months

It sure isn’t positive news.