Thoughts on TESLA

[eroscott]

The 13% drop in price (on a day when market was up) certainly shows the market considers this to be less than positive news.

Thanks for your financial "insight". The chart shows a variety of these drops and gains tho. One of the most shorted stocks there is. Lot of sudden volatility both down and up. Look it up youself on previous layoffs (Fall 2018) or other big events. Also look up the rises on what that news is about.

 

[ERD50]

Originally Posted by ERD50
But Musk planned on 10,000 Model 3's per week by now. They were around 5,000/week, with lots of push. What can they do in the near term after a 7% cut?
Sure, exports mean more sales, but if they are only making ~ 5,000, that means fewer sales to the US. I would think they would want to go for all they can while they still have the half tax credit in the first half of 2019, and the quarter tax credit in the 2nd half.-ERD50

.... As an investor, I look at the trajectory of a business based on actual performance and demand, not the platitudes promised by the leadership or PR department..

But those promises are what at least some investors and debt suppliers are taking into consideration. Do you think the market just ignores the comments of the CEO? I guess we shouldn't believe anything Musk says about Tesla? He really doesn't plan to succeed? It's all a game? This is just silly. It does matter.

If I were an investor, I'd sure want to make some estimates about those demand numbers. Cutting staff while adding export sales (they had to wait for approvals in those countries)? As an investor, I'd be concerned.

Do you have any answers for that? Or do you just go on faith?

Did Tesla size themselves for a 10,000/week M3 run rate? If so, 5,000 is a big problem.

....With Tesla, there is no significant short-term threat to continued growth. ....

None? I think you have blinders on. Companies always face threats. I'm not saying they won't grow short term, they should. But it is far from a slam-dunk.

... but all of the angst over Musk overpromising misses the point. Tesla has kick-started a dormant electric vehicle industry and is poised to be the next Apple, Amazon, or Microsoft for investors. ...

There is a lot of 'stuff' between "poised" and "delivering".

... The stock market is very skittish, right now. Headlines drive huge swings, but if the underlying business is promising, the stocks should rebound. Tesla has a very promising business.

I just ran a 3 month chart of S&P, GM, F, and TSLA. I didn't see anything 'skittish'.

I can't help but think that their automated assembly line (the one that proved humans were under-rated) has had some fixes done to it. My guess is the $35,000 Model 3 price always depended on machines doing most of the work while the under-rated humans pushed a button and dozed (Meet George Jetson!). I can't help but think they will get more out of those machines as time goes by.

OK, see if you can run some numbers. How much labor goes into an M3? How much will be displaced by improved automation? I would certainly hope that most of their automation worked as expected, and that there were only a few problem areas. So the incremental difference should be pretty small, I would think. The only other explanation is that their manufacturing engineers are incompetent. I doubt that's the case. But as I mentioned way back, I was rather shocked at what Musk described as some of their automation issues. I've seen those kind of issues dealt with, and they sounded almost trivial (problems with a robot picking up a sound absorbing mat - just add 'grab' features to the mat. It's not rocket science).

Certainly they will get better as time goes on. But they are facing the double-whammy of shrinking tax credits, and moving down the product line to lower margin product.

From mid-range to standard, I think we are talking a price delta of ~ $9,000 for a battery delta of 12kWh (62-50?). Not sure what the estimates are for $/kWh, but even if it is still $300/kWh, that's a $3,600 reduction, so that's $5,400 in lost revenue (or are there other things between standard and mid-range I missed?). That's a lot to make up.

-ERD50

 

[bobandsherry]

Thanks for your financial "insight". The chart shows a variety of these drops and gains tho. One of the most shorted stocks there is. Lot of sudden volatility both down and up. Look it up youself on previous layoffs (Fall 2018) or other big events. Also look up the rises on what that news is about.

Thanks, but I'm not interested in going back in time. And quite frankly, not sure what point you are trying to make. Shows to me just how speculative this stock is (high beta) and that the slightest breeze gets the rats jumping from the ship. And just to be clear, I'm not negative Tesla, but negative at the trading price of Tesla. It's too high for what the company currently produces and they have significant head winds (IMHO) in the near future with competition that will put downward pressure on their ability to generate profits in order to sustain such a high market value. But I've been wrong before, so may be wrong again.

 

[ERD50]

Thanks, but I'm not interested in going back in time. And quite frankly, not sure what point you are trying to make. Shows to me just how speculative this stock is (high beta) and that the slightest breeze gets the rats jumping from the ship. And just to be clear, I'm not negative Tesla, but negative at the trading price of Tesla. It's too high for what the company currently produces and they have significant head winds (IMHO) in the near future with competition that will put downward pressure on their ability to generate profits in order to sustain such a high market value. But I've been wrong before, so may be wrong again.

And I would think the shorts should help to stabilize the stock.

What does a short think when the stock tanks? Hmmm, is this my opportunity to cover? And to cover, you need to buy to offset the short, which adds demand to the stock on any drop. Which would be a stabilizing influence.

Any shorts have already done their 'damage', it's baked in. Going forward, the more shorts in the rear-view mirror the better. Those are all buyers at some point.

Taking a short position on anything is nerve racking. Unlike a long position, you can lose more than you put in. It's tempting to close out the short when you have an opportunity, as that opportunity may be the last. You never know.

But to the fans - shorts be evil people who hate Tesla. Blame them for the drop, not Musk.

-ERD50

 

[bobandsherry]

And I would think the shorts should help to stabilize the stock.

What does a short think when the stock tanks? Hmmm, is this my opportunity to cover? And to cover, you need to buy to offset the short, which adds demand to the stock on any drop. Which would be a stabilizing influence.

Any shorts have already done their 'damage', it's baked in. Going forward, the more shorts in the rear-view mirror the better. Those are all buyers at some point.

Taking a short position on anything is nerve racking. Unlike a long position, you can lose more than you put in. It's tempting to close out the short when you have an opportunity, as that opportunity may be the last. You never know.

But to the fans - shorts be evil people who hate Tesla. Blame them for the drop, not Musk.

-ERD50

Indeed, shorts don't push the price lower. With Tesla it's so speculative that it creates such a ripe environment for shorts.

 

[oneill225]

If I were an investor, I'd sure want to make some estimates about those demand numbers. Cutting staff while adding export sales (they had to wait for approvals in those countries)? As an investor, I'd be concerned. Do you have any answers for that? Or do you just go on faith?

Do I have answers for why Tesla is cutting staff while increasing exports? I know that the staff went up 30% last year and now they are reducing 7%. Does not sound unreasonable if the production lines and other processes have become more efficient. Right sizing should always happen if a company wants to get the most output at the lowest cost.

But why guess? We know production rates are holding steady (if not growing slowly) around 5,000 per week. Bloomberg actually tracks this minute by minute. We also know that sales to the EU have just received the go ahead and that thousands of Model 3s are now shipping to Europe. Of the threats to Tesla's success, trimming the workforce 7% seems minimal.

Did Tesla size themselves for a 10,000/week M3 run rate? If so, 5,000 is a big problem.

I doubt it, but what is the big problem? Do you have some inside information?

None? I think you have blinders on. Companies always face threats. I'm not saying they won't grow short term, they should. But it is far from a slam-dunk.

No significant short term threats. Financing is an issue, but history says they will overcome that obstacle (in the short term). What significant short term threats do you think they are facing? What am I missing due to my blinders?

I just ran a 3 month chart of S&P, GM, F, and TSLA. I didn't see anything 'skittish'.

My brokerage account disagrees with that assessment. Buy on the dips and sell on the jumps. The last six months have been very profitable with Tesla.

OK, see if you can run some numbers. How much labor goes into an M3? How much will be displaced by improved automation? I would certainly hope that most of their automation worked as expected, and that there were only a few problem areas. So the incremental difference should be pretty small, I would think. The only other explanation is that their manufacturing engineers are incompetent. I doubt that's the case. But as I mentioned way back, I was rather shocked at what Musk described as some of their automation issues. I've seen those kind of issues dealt with, and they sounded almost trivial (problems with a robot picking up a sound absorbing mat - just add 'grab' features to the mat. It's not rocket science).
Certainly they will get better as time goes on. But they are facing the double-whammy of shrinking tax credits, and moving down the product line to lower margin product.
From mid-range to standard, I think we are talking a price delta of ~ $9,000 for a battery delta of 12kWh (62-50?). Not sure what the estimates are for $/kWh, but even if it is still $300/kWh, that's a $3,600 reduction, so that's $5,400 in lost revenue (or are there other things between standard and mid-range I missed?). That's a lot to make up.-ERD50

I don't need to understand all aspects of Tesla's labor costs to feel safe investing in the company (I will leave that up to Tesla management). As long as they can eke out a profit (or close to it) while they continue to grow and dominate the EV market, I am happy. Tesla does not operate in a vacuum. Any analysis of whether they are succeeding needs to be measured against the success of their competition, not against optimistic projections made by Musk 6 months ago.

 

[Ready]

We need to see where the staff reductions are coming from. It may be primarily in the area of overhead, and not in the production/manufacturing area.

 

[ERD50]

Do I have answers for why Tesla is cutting staff while increasing exports? I know that the staff went up 30% last year and now they are reducing 7%. Does not sound unreasonable if the production lines and other processes have become more efficient. Right sizing should always happen if a company wants to get the most output at the lowest cost.

But why guess? We know production rates are holding steady (if not growing slowly) around 5,000 per week. Bloomberg actually tracks this minute by minute. We also know that sales to the EU have just received the go ahead and that thousands of Model 3s are now shipping to Europe. Of the threats to Tesla's success, trimming the workforce 7% seems minimal. ...

That's my point. With EU sales opening, and assuming they can now make 5,000/wk (or maybe a bit more) with reduced staff, doesn't that mean far fewer US deliveries? Isn't that a concern? Does it mean the market for the higher end M3s in the US has dried up? Remember, the next tax credit phase-outs are time based, not unit based. Sure seems they would want to get US sales while they can lure customers with the larger tax credits.

It seems they would want to retain staff to support US sales PLUS EU sales.

Can you explain that?

Did Tesla size themselves for a 10,000/week M3 run rate? If so, 5,000 is a big problem.

I doubt it, but what is the big problem? Do you have some inside information?

Of course not. That's why I think it should be considered. It could be a drag on profits. Manufacturing is capital intensive. Takes more capital to gear up for 10,000 than 5,000 obviously. If Tesla geared up in anticipation of Musk's wild projections, they are carrying a lot of under utilized capital.

No significant short term threats. Financing is an issue, but history says they will overcome that obstacle (in the short term). What significant short term threats do you think they are facing? What am I missing due to my blinders? ...

Everything I listed above. I'm not sure history matters with regards to debt. Lenders will be looking forward, they always do.

My brokerage account disagrees with that assessment. Buy on the dips and sell on the jumps. The last six months have been very profitable with Tesla. ...

Well, if played right, a trader sure could make money on any volatile stock. Have you sold any? I don't recall you mentioning it, but I may have missed it. But unless you list the sales in real time (as you did yesterday's buy), you can't really expect anyone to take that too seriously. Please list them if I missed them.

... I don't need to understand all aspects of Tesla's labor costs to feel safe investing in the company (I will leave that up to Tesla management). As long as they can eke out a profit (or close to it) while they continue to grow and dominate the EV market, I am happy. Tesla does not operate in a vacuum. Any analysis of whether they are succeeding needs to be measured against the success of their competition, not against optimistic projections made by Musk 6 months ago.

No, you don't need to understand the labor costs. But it could be helpful if you are trying to understand what's going on here.

I disagree that success is measured by them versus EV competition. Success for a company is measured by profit. And like others have said, any investor should be concerned if the CEO regularly makes overly optimistic projections. To ignore that backs up my 'blinders' comment, and sounds more like fan magazine talk than investment strategy.

-ERD50

 

[Ready]

Amazon never made much profit in the early years because they were more focused on growth, but it worked out well for them. It’s not practical to be an industry disrupting new automotive manufacturer and expect profits when sales are only several hundred thousand units per year. Either they will continue to grow and maintain a lead in the EV category or someone will eventually come up with a more competitive product to challenge them. But for now the lack of profits does not concern me that much.

 

[Lakewood90712]

Tesla Exports to Europe and Asia

What kind of import tax will Tesla be looking at in the various new Markets ?

Will some of those nations accuse Tesla of unfair trade practices by receiving environmental offset $ in the millions to help fund the company ?
( IIRC $180 million in a recent quarter )

 

[ERD50]

Amazon never made much profit in the early years because they were more focused on growth, but it worked out well for them. It’s not practical to be an industry disrupting new automotive manufacturer and expect profits when sales are only several hundred thousand units per year. Either they will continue to grow and maintain a lead in the EV category or someone will eventually come up with a more competitive product to challenge them. But for now the lack of profits does not concern me that much.

Yes, it's true that a company can focus on growth and remain unprofitable for a long time. But that is not what Musk is saying about Tesla. From his letter to employees (emph mine):

Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn't any other way.

I suppose you can say there is a difference between 'viable' and 'profitable'. But it is clear that they need to make cost reductions to remain 'viable', which I take as 'not losing too much', probably a cash flow concern.

Either way you slice it, they have a lot of challenges to maintain enough margin on a $35,000 product to remain viable.

And the following (emph mine again):

However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.

That sure sounds like they don't have enough demand in the higher optioned models to remain viable. There's a big gap between a small profit with $44K+ models, and staying viable with large numbers of $35K models.

I'm not saying they can't do it, just that it looks very challenging. I actually hope they do succeed, I like competition. The more the merrier. But that tax credit phase out sure is a tough one at a tough time.

-ERD50

 

[mpeirce]

Layoffs are one of the few ways to clear deadwood from companies in California. I know when I worked there, it was hard to fire people who clearly deserved to be fired (oh the stories of some of those folks...)

Because layoffs are "necessary" and don't "target individuals" - even if they aren't and do - they avoid lots of litigation.

 

[Lakewood90712]

Layoffs are one of the few ways to clear deadwood from companies in California. I know when I worked there, it was hard to fire people who clearly deserved to be fired (oh the stories of some of those folks...)

Because layoffs are "necessary" and don't "target individuals" - even if they aren't and do - they avoid lots of litigation.

Yes, it is hard to fire. And it should be. Have done it, just takes sticking to the rules and don't be lazy about it. Document, Document Document. I have seen several firings go bad by managers who were lazy or emotionally motivated. If the manager can't keep the process sterile, it must be delegated to someone outside the circle.

 

[oneill225]

That's my point. With EU sales opening, and assuming they can now make 5,000/wk (or maybe a bit more) with reduced staff, doesn't that mean far fewer US deliveries? Isn't that a concern? Does it mean the market for the higher end M3s in the US has dried up? Remember, the next tax credit phase-outs are time based, not unit based. Sure seems they would want to get US sales while they can lure customers with the larger tax credits.
It seems they would want to retain staff to support US sales PLUS EU sales.
Can you explain that?

I don't need to explain it. I defer to Tesla management to tweak their deliveries as they think needs to be done. Going straight to the worst case scenario (US sales drying up) is not supported by any facts other than your imagination.

Well, if played right, a trader sure could make money on any volatile stock. Have you sold any? I don't recall you mentioning it, but I may have missed it. But unless you list the sales in real time (as you did yesterday's buy), you can't really expect anyone to take that too seriously. Please list them if I missed them.

I'll pass. You have conceded my point that traders are making money on Tesla's dips and climbs. I recommend you dive in on Tuesday. It will rebound soon.

No, you don't need to understand the labor costs. But it could be helpful if you are trying to understand what's going on here.

Being all knowing would be great, but I doubt that you apply this level of scrutiny to other companies when evaluating their stock value. Labor costs? I will start to incorporate that into my evaluation when I find out that Tesla is unable to make payroll and/or can't find enough workers. Their competition also employs labor, so it is a challenge for them all.

I disagree that success is measured by them versus EV competition. Success for a company is measured by profit. And like others have said, any investor should be concerned if the CEO regularly makes overly optimistic projections. To ignore that backs up my 'blinders' comment, and sounds more like fan magazine talk than investment strategy.-ERD50

This has been addressed. A growth company is defined by low (or no) profits and debt while they build-out. Amazon is a great example. By the way I don't ignore Musk's projections, I just take them with a grain of salt like other investors. At the end of the day, delivering on only half of his claims is still pretty damn good.

 

[Texas Proud]

On a completely different note....


Today I was in the Woodlands and went to Chipotle to get lunch... this was a place I used to go at least once a week when working...



So, when parking I see a model S next to me... then walk a bit father and see 2 others parked next to each other... seems there were 2 slots for EV cars but no charger... not sure as I did not go and look at the sign....


When I was leaving I saw a 4th S and it was backing onto the sidewalk!!! SAY WHAT!!! Well, I looked at it and to my surprise it was backing up into a Tesla showroom.... it did not look that big but I was already late for where I needed to be so did not go into it to see what was there...


I think it would have been interesting to see what was there and if there were a 3... but at least 4 model S if not more hanging around...

 

[ERD50]

.... Going straight to the worst case scenario (US sales drying up) is not supported by any facts other than your imagination. ...

Imagination? Didn't Musk say as much in his email about the staff cuts? " Moreover, we need to continue making progress towards lower priced variants of Model 3." If demand was not declining, they could just keep selling the higher end versions with greater margin, and work on cost reductions/efficiencies in parallel. I think it is quite clear that Musk is saying there is only so much demand at that level, and it will be declining.

Originally Posted by ERD50 Well, if played right, a trader sure could make money on any volatile stock. Have you sold any? I don't recall you mentioning it, but I may have missed it. But unless you list the sales in real time (as you did yesterday's buy), you can't really expect anyone to take that too seriously. Please list them if I missed them.

I'll pass. You have conceded my point that traders are making money on Tesla's dips and climbs. I recommend you dive in on Tuesday. It will rebound soon.

You love to use the phrase "conceded a point" with regards to something I never made a point of to begin with. I never said traders were not making money on Tesla (or any other volatile stock). Again, you seem to need to feed yourself 'wins' by making stuff up. Very odd behavior.

You yourself have reminded me that this is the "Stock Picking and Market Strategy" sub-forum. It seems odd and unhelpful to post "The last six months have been very profitable with Tesla. ...", w/o some reference to your actual buys and sells and strategy (beyond buy low, sell high).

.... Being all knowing would be great, but I doubt that you apply this level of scrutiny to other companies when evaluating their stock value. Labor costs? I will start to incorporate that into my evaluation when I find out that Tesla is unable to make payroll and/or can't find enough workers. Their competition also employs labor, so it is a challenge for them all. ...

Back when I invested in individual stocks, yes, I did significant research, and followed others who were doing even more research than I was. And I played Devil's Advocate on all those thoughts, I never viewed the company from a "fan" persepctive. It helped me make a bundle in AAPL, back when the crowd mentality was that they were going under. But it's a lot of work, and it's rare for that info to not be absorbed by the market anyhow (I think AAPL in 1997 was a rare exception). I stopped trading it after cashing in my last 13 bagger. After that, I didn't feel there was such a disconnect between the market and their potential, but I really should have held onto some for far longer. But I'm very happy with what I was able to grab.

... By the way I don't ignore Musk's projections, I just take them with a grain of salt like other investors. At the end of the day, delivering on only half of his claims is still pretty damn good.

Well, one man's 'pretty damn good' might look like 'fraud/SEC violation'' to another.

Good Luck - ERD50

 

[Blueskies123]

First SpaceX, and now Tesla with significant cuts to employee staff. Based on premarket, market didn't like the news this morning.

https://www.cnbc.com/2019/01/18/elon-musk-tesla-email-to-employees-about-job-cuts.html

I saw this as good news. Every company should drop their bottom 10% of performers from time to time. The companies I worked for that did not id this were full of people taking one sick day a month, came in late and had to leave early.

 

[Lakewood90712]

This thread is just like The Energizer Battery Bunny , just keeps going, and going..............

 

[oneill225]

Imagination? Didn't Musk say as much in his email about the staff cuts? " Moreover, we need to continue making progress towards lower priced variants of Model 3." If demand was not declining, they could just keep selling the higher end versions with greater margin, and work on cost reductions/efficiencies in parallel. I think it is quite clear that Musk is saying there is only so much demand at that level, and it will be declining.

Tesla is attempting to meet expanding demand for the Model 3 in multiple global markets (China, Europe, Canada, etc.). They are doing so with a limited number of cars coming off the production line. This necessitates taking from one market to feed another. Reading this dynamic as though every market denied one of these limited cars is a market "drying-up" is a bit of a fallacy unless you have some hard evidence showing that Tesla can not sell 5,000 Model 3s in the US each month, should they choose to.

You love to use the phrase "conceded a point" with regards to something I never made a point of to begin with. I never said traders were not making money on Tesla (or any other volatile stock). Again, you seem to need to feed yourself 'wins' by making stuff up. Very odd behavior
You yourself have reminded me that this is the "Stock Picking and Market Strategy" sub-forum. It seems odd and unhelpful to post "The last six months have been very profitable with Tesla. ...", w/o some reference to your actual buys and sells and strategy (beyond buy low, sell high).

I think you and I agree that there has been a lot of money making opportunities over the past months in buying on Tesla's dips and selling on Tesla's rebounds. If that is not the case, then I do not think you have looked at Tesla stock charts very closely.

Back when I invested in individual stocks, yes, I did significant research, and followed others who were doing even more research than I was. And I played Devil's Advocate on all those thoughts, I never viewed the company from a "fan" persepctive. It helped me make a bundle in AAPL, back when the crowd mentality was that they were going under. But it's a lot of work, and it's rare for that info to not be absorbed by the market anyhow (I think AAPL in 1997 was a rare exception). I stopped trading it after cashing in my last 13 bagger. After that, I didn't feel there was such a disconnect between the market and their potential, but I really should have held onto some for far longer. But I'm very happy with what I was able to grab.

So, you were a fan of Apple. I am a fan of Tesla. If Tesla starts to show serious signs of failing, I will no longer be a fan of Tesla. It is the "why" of being a fan (or not) that matters, not the fact that someone is a fan (or not).

Well, one man's 'pretty damn good' might look like 'fraud/SEC violation'' to another.

An excellent example of a buy on the dip moment for Tesla. Please note that the stock rebounded nicely from those headlines (a sell on the rise moment). Another opportunity may be there this coming Tuesday. I encourage fans of Tesla to take advantage of it.

 

[oneill225]

This thread is just like The Energizer Battery Bunny , just keeps going, and going..............

I take some of the responsibility. I need a hobby.

 

[Chuckanut]

This thread is just like The Energizer Battery Bunny , just keeps going, and going..............

Yes, it does, but for the most part it's civil so why not?

I regards to the pice and affordablitity of the Model 3, I think people need to remember that for Mr. Musk this is a bit of a 'mission'. One may agree or disagree with him, but, IMHO, he truly believes that using that big fusion reactor in the sky is the way to power things, including as many cars as possible. So, a few EVs sold to rich folks will not meet his long term goals no matter how much money they may make for him.

 

[bobandsherry]

I saw this as good news. Every company should drop their bottom 10% of performers from time to time. The companies I worked for that did not id this were full of people taking one sick day a month, came in late and had to leave early.

The 13% drop on same day says market thinks otherwise. [emoji3]. So guessing you then loaded up big with Tesla stock to enjoy the good news, right?

 

[Mr. Tightwad]

I saw this as good news. Every company should drop their bottom 10% of performers from time to time. The companies I worked for that did not id this were full of people taking one sick day a month, came in late and had to leave early.

Those are rookie numbers.

I worked for county government. I know one guy that worked 19 hours over 10 years. He was paid full salary for 5 of those years. Another guy that got paid a couple years while he was at home, never reporting to work. When discovered, he explained "I was waiting for someone to give me an assignment". Another guy fell asleep at his post, someone hid his personal items around the building, and the fellow claimed overtime to find them (this guy was denied ot) Another guy had a DR's note that he couldn't be talked to in a loud voice. Everyone spoke to him in a whisper.

And I'll admit, one of those stories is about me.

 

[Texas Proud]

I will jump in as I think some of this is you not reading what ERD put down... I am sure he will also respond.... this is my take on what was written...

Tesla is attempting to meet expanding demand for the Model 3 in multiple global markets (China, Europe, Canada, etc.). They are doing so with a limited number of cars coming off the production line. This necessitates taking from one market to feed another. Reading this dynamic as though every market denied one of these limited cars is a market "drying-up" is a bit of a fallacy unless you have some hard evidence showing that Tesla can not sell 5,000 Model 3s in the US each month, should they choose to.

If there is demand in other markets along with demand here, then why limit production to just 5,000 units? Seems strange to me that a growing company would just stop at 5K and then sell all over the world... I do remember reading that they are looking at building a plant in China, so maybe production will go up.... but saying that we will not sell here to sell there just does not pass the smell test...

I think you and I agree that there has been a lot of money making opportunities over the past months in buying on Tesla's dips and selling on Tesla's rebounds. If that is not the case, then I do not think you have looked at Tesla stock charts very closely.

He never said that someone could not make money trading on Tesla... he asked what money YOU have made on trading.... IOW, if you bought at $300 and it kept going up and down past that mark and you never sold a single share you made no money on the swings... you have said you are an investor in Tesla, not a trader.... big difference...

So, you were a fan of Apple. I am a fan of Tesla. If Tesla starts to show serious signs of failing, I will no longer be a fan of Tesla. It is the "why" of being a fan (or not) that matters, not the fact that someone is a fan (or not).

He also never said he was a fan of Apple... you are putting words in his mouth he never said... he said that in his research that he thought it was undervalued and invested... it made him money... heck, he could hate the products they sell and still invest if he thinks he will get a good return...

An excellent example of a buy on the dip moment for Tesla. Please note that the stock rebounded nicely from those headlines (a sell on the rise moment). Another opportunity may be there this coming Tuesday. I encourage fans of Tesla to take advantage of it.

Might be an opportunity for someone who wants to take a risk... but even is someone did it does not mean they believe in Tesla... a trader trades stocks to try and get money... they do not care about the company at all nor the products they sell.... But, his point was not about trading, but Musk's continued false claims that some seem to sweep under the rug... but there have been a good number of companies that have been sued by shareholder who have lost due to their CEO making false claims.... think Enron as an example... if Tesla takes a huge drop in price I could almost guarantee a shareholder lawsuit based on his comments...

 

[38Chevy454]

Here's another basic question regarding manufacturing economics:


In automotive mfg land, the profit of a typical vehicle goes up when volume increases. So how does Tesla reducing production volume make it better for finding efficiency of production?


This Tesla move to reduce number of vehicles produced seems to me would make it tougher to produce the lower cost models that Tesla needs to build. Sure every mfr would love to sell the high optioned vehicles, as they naturally have more profit. But real world dictates that you need to have a broad base lineup to cover both ends of the spectrum for a model. Higher volume results in spreading the fixed costs over more units, and variable costs usually also go down with higher volume. So it makes the lower end model still profitable, not as much of course as the higher end model.