Thoughts on TESLA

[kcowan]

Debt is not a problem. It is the mismatch of debt coming due with free cash flow. IOW will 4Q be higher than 3Q? If so then still worried about the following quarter. This might turn into a stable growth stock in a year and if so, the stock holders will be rewarded. But it will be a sweaty 12 months.

By then we should know how they deal with end-of-life for the Model S too.

 

[ERD50]

Debt is not a problem. It is the mismatch of debt coming due with free cash flow. IOW will 4Q be higher than 3Q? If so then still worried about the following quarter. This might turn into a stable growth stock in a year and if so, the stock holders will be rewarded. But it will be a sweaty 12 months.

By then we should know how they deal with end-of-life for the Model S too.

I had trouble understanding just what those numbers in the link you gave really mean. Any further explanation would be appreciated.

You say the debt itself is not a problem, but the future mismatch could be. OK. Can you provide any insight as to what Tesla needs to see for future profits for the next gew quarters as that debt comes due? I guess that's the key?

From there, it seems we could make some estimates of sales and gross margins they will need over the next few quarters?

-ERD50

 

[Totoro]

So far as I understand, net debt is about $9 billion. Didn't check it, but an interest rate of 7% would be understandable. So interest on that is $630 million. Which seems to check out with morningstar.com numbers.

If profits for Tesla end up at a billion dollars a year, they can cover the interest about 2 times. That's dangerous for a volatile industry, a lot less if they can double profit to $2 billion. Another one is the quick ratio, was 0.37 in June. Not good.

All this means that bondholders are not too comfortable, but also no incentive to pull the rug underneath Tesla and run for the hills.

Long story short: If they can keep up the current performance at least, no bond holder is going to refinance at low interest rates but also not going to let it ruin the party (i.e. let Tesla fail by not rolling over the bond). Someone will pick up the slack, maybe at the expense of shareholders though by asking for onerous terms.

All this is reflected in their bond prices: at 88 quite a bit below par for their 2025 ones, but not a lot either.

 

[Lakewood90712]

Isn't some of the Debt convertible ?

 

[6miths]

I don't know about their fiscal situation and prospects but I was just at 8 car dealerships today and the most beautiful cars (IMHO) were the one's in the Tesla dealership.

 

[Totoro]

Isn't some of the Debt convertible ?

Yes, I believe at least $2.3 billion at $360 USD. Last close price was $330 USD.

 

[Lakewood90712]

Getting side panel ad's for "Audi E-Tron" . will click on it next time I see one.

 

[bobandsherry]

Mercy - I go on vacation and stayed off the grid and come back to most commons down but Tesla up. Guess my hunch to buy at $255 paid off, didn't expect this upon my return. Looks like I missed the high watermark, but time to sell off and take the gain.

 

[ERD50]

There is no meaning to this, but we've mentioned how Tesla has held up well as the market has dropped. So I just couldn't help that this odd symmetry caught me eye (from Yahoo financial):

At Close today -

TSLA 329.90 -4.95 -1.48%
SPY 267.77 +3.91 +1.48%

-ERD50

 

[NW-Bound]

The answer was the post above yours, ERD50.

Bob & Sherry dumped their vast holding today, driving the stock down.

 

[bobandsherry]

The answer was the post above yours, ERD50.

Bob & Sherry dumped their vast holding today, driving the stock down.

 

[Chuckanut]

Kara Swisher has done a rather good interview (IMHO)with Mr. Musk on her Recode podcast. The first 20 minutes contain some interesting comments on the press and the automobile industry in general.

https://www.recode.net/2018/11/2/18...3c6f2b073f2&utm_source=cm_email&utm_term=here

I get that, but do you understand the mood in this country around the press and the dangers of attacking, especially when the president is doing that? In quite an aggressive, “enemy of the state” and everything else. It’s disturbing when someone like you as a leader does that, too, or goes along with it.
The answer is for the press to be honest and truthful, and research their articles and correct things properly when they are false. Which they don’t do.

Making a car company successful is monumentally difficult. There have been many attempts to create a car company and they have all failed, even the ones that have had a strong base of customers, thousands of dealers, thousands of service centers, they’ve already spent the capital for the factories, like GM and Chrysler, still went bankrupt in the last recession. Ford and Tesla made it barely through the last recession. There’s a good chance Ford doesn’t make it in the next recession. So, as a startup, a car company, it is far more difficult to be successful than if you’re an established, entrenched brand. It is absurd that Tesla is alive. Absurd! Absurd.
What do you credit that to?
Excruciating effort.
By you and —
Hundred-hour weeks by everyone.

 

[Lakewood90712]

It's half way thru the quarter . Numbers on model 3 orders and deliveries ?

 

[oneill225]

It's half way thru the quarter . Numbers on model 3 orders and deliveries ?

https://www.bloomberg.com/graphics/2018-tesla-tracker/

 

[bobandsherry]

Just can't understand how people continue to invest in this company. This just confirms what many here had discussed and shows that Musk isn't forthcoming and honest. But there were people who were willing to pay $19K for a Bitcoin.... so who can say what's crazy and what isn't.

Elon Musk Admits Everyone Was Right About Tesla

 

[Chuckanut]

Just can't understand how people continue to invest in this company.

Relax. You have no position in the company, right?

Enjoy life.

 

[bobandsherry]

Relax. You have no position in the company, right?

Enjoy life.

What difference does it make if I have a position or not given the thread is about "Thoughts on Tesla". So perhaps you need to head your own advise and relax. I'm enjoying life everyday, thanks.

 

[Texas Proud]

Relax. You have no position in the company, right?

Enjoy life.

That is not true... many of the index funds own Tesla... heck, IIRC the Vanguard extended market has it as #1 holding...

 

[ERD50]

Came across this yesterday. Interesting, the details are a bit vague, or maybe I didn't listen closely enough. But the comments from the 'fans' are interesting.

What I got from it though is, this guy is talking about 17F as being 'bitterly cold' in New York? OK, that's probably cold for Thanksgiving, but in another month or 2, I'd think you could expect some minus 17 days in New York some years, or even worse on occasion. And if you need to drive somewhere, then park for several hours w/o a chance to plug in, sounds like range is going to be hit really hard.

So the 'fans' are grousing - (paraphrasing) "it's not fair! You aren't really measuring the 'range', because you stopped for hours without it plugged in, so that degraded the battery level. It's not the miles, it's the stopping You should have plugged it in while stopped. And... you had the heat on?!!!! That draws a lot of power!!!!".

Now I'm not sure if the battery has to be heated while stopped, or if it just has to heat it before it can draw much. But anyhow, in my view, that is a very realistic scenario. It's cold out, you have to drive somewhere and stop there for hours. And he did have it plugged in and 'conditioned' before he left home. You can't count on having a plug available at your destination. So wow, if this guy saw that kind of range drop at 17F, what would it be at -17F?

And yes, it's COLD out (and that car has a big glass roof?), you are going to have the heat on. Yes, the heated seats should be more efficient than warming the air, but the driver should be able to do whatever they want for comfort. You should decide, not the car. I guess I'd get better mpg in my car in summer if I roll up the windows and keep the A/C off. But I'm not gonna do that. And I like to BLAST the heat in the winter.

So imagine, it's -17F out, you visit a friend, there's no plug available, you decide to stay overnight. What kind of range are you going to have in the morning? What if you preheat the car before you leave (like some people do with remote start on their ICE)?

-ERD50

 

[Rich]

I plan on buying an EV come late Spring of 2019, either a Chevy Bolt or a Nissan Leaf (60kW hr battery model). I'm under no illusion in regard cold weather degradation of range of an EV. This vehicle will be used on Cape Cod, from May through October. I would be reluctant to purchase an EV, as my sole transportation, if I lived in a cold climate (AZ and MA at the moment).


I concur with the poster who mentioned that the occupants of an EV should be able to use the auto's heater to the extent they see fit. Driving around in an ice-box is not my idea of a practical vehicle. EV owners need be aware of their vehicles limitations.



Rich

 

[JoeWras]

The interstate south of Cincinnati was a sheet of ice Tuesday morning due to a surprise snow burst that painted both I-75 and I-71. Traffic was stopped, delayed for an hour or so as the cars made their way through this 5 mile icy strip at less than 5 mph. The area had few services as it was a rural expanse between two major cities.

I can't imagine driving an pure EV in those conditions. Maybe someday, but that was no weather for an EV. Too many variables working against the range.

 

[Mr. Tightwad]

The interstate south of Cincinnati was a sheet of ice Tuesday morning due to a surprise snow burst that painted both I-75 and I-71. Traffic was stopped, delayed for an hour or so as the cars made their way through this 5 mile icy strip at less than 5 mph. The area had few services as it was a rural expanse between two major cities.

I can't imagine driving an pure EV in those conditions. Maybe someday, but that was no weather for an EV. Too many variables working against the range.

I've seen similar posts from you about this. I don't get it. 5 miles? Icy road or no, I don't see whether its any different in a corolla or an EV.

Cold conditions do decrease an EV's range. ICE cars don't like the cold either. EV's also have longer range when you drive slow, just like ICE's.

So why would a car that has a range of 310 miles like mine be unimaginable for that drive?

 

[ERD50]

I've seen similar posts from you about this. I don't get it. 5 miles? Icy road or no, I don't see whether its any different in a corolla or an EV.

Cold conditions do decrease an EV's range. ICE cars don't like the cold either. EV's also have longer range when you drive slow, just like ICE's.

So why would a car that has a range of 310 miles like mine be unimaginable for that drive?

Because you can't just pull into a gas station and refill in 10 minutes.

Sure, these are corner cases, but they happen, and it would be a pain to be hampered with an EV versus ICE/hybrid.

Maybe that's the guy the guy going to Thanksgiving (but now it's Christmas or New Years, and it is -15F), needing to let the car sit for 5 hours, or overnight w/o access to a charger, and then driving back home. Every once in a while, someone's 40 minute commute turns into a 2 -3 hour nightmare in a storm here in the Midwest.

If I did the math right, the heater isn't as bad as I though. Just saw a youtube where the guy shows the heater taking 4800W on max (with seat on '1'?). Funny thing, he says "it is 52F out, so it's cold! " Hah, he doesn't know what cold is!

But I'm guessing stuck in traffic, w/o all the wind chill, you would not have the heater on high. But if you did,for one hour and you estimate ~ 330 watt-Hr per mile, 4800/330 is only ~ 15 miles. But if you are already pushing it....

None of this means that lots of people won't find an EV to be the right choice for them. But when they start talking about no gas stations in 20 years, well, I just don't think so.

-ERD50

 

[Lakewood90712]

Chatted with an old friend today. He drives a Leased Bolt. ( Has owned a volt and a leaf) .

His wife drives an owned model 3 and loves it.

He also told me that used model 3's are showing up in the $45,00 area.

 

[JoeWras]

I've seen similar posts from you about this. I don't get it. 5 miles? Icy road or no, I don't see whether its any different in a corolla or an EV.

Cold conditions do decrease an EV's range. ICE cars don't like the cold either. EV's also have longer range when you drive slow, just like ICE's.

So why would a car that has a range of 310 miles like mine be unimaginable for that drive?

ERD50 pretty much said it.

There were delays of up to 2 hours because they closed the interstate. I gave you the scenario after they opened it. I don't want to have to sit there and turn off my heater in 20F cold worrying about range anxiety.

This was a surprise storm. Perhaps the next supercharger was in Lexington. If I left Cincy with not 100% thinking the ride was easy, then ran into this, I'd be a bit panicked. Yes, I understand that 5mph is OK with EV vs. gas since "idle" doesn't matter. Heater does.

Instead, myself and many others just pulled into Loves for some coffee and a refill and were on our way.

Maybe when every Loves and Pilot can charge my car in 10 min I'll be sold. All I'm saying is we are not there yet.