Thoughts on TESLA

[bobandsherry]

If ya have 30 minutes to kill, might find this interesting.

Tesla: Savior or Fraud? Bulls vs Bears | Full Documentary

 

[bobandsherry]

Based on this, I guess I need to buy a Tesla and put it under "investments" in my net worth statement Strangely, if you look at how Tesla calculates their lease cost it doesn't seem that Tesla is considering these increasing in value.

Tesla vehicles are now ‘appreciating assets’ due to self-driving capability, says Elon Musk

I wonder what estimated ROI is on this.

 

[bobandsherry]

What is the plan to provide additional 38.9% call capacity for 2019?

-ERD50

Too much math to consider for a weekend, but my belief is they have no idea, or rather don't have to be concerned with it as demand won't meet Tesla's guidelines. I always look at the market as indicator on "good news".

For the days going into the announcement both were tracking pretty close to each other, a drop of 3% over these three days. But clearly there's a difference after the announcement. Panasonic showed an immediate 4% jump up, TSLA remained down.


This could all change if Tesla continues to announce more 'good news'.

 

[Breedlove]

Neighbor brought this up last night , probably already been said Elon Musk has no interest in the Tesla's. He wants to get the Brand out and sell the technology and establish charging stations . Like Exxon / Shell , Etc . Someday he will have all of the charging centers set up when we are forced to drive EV cars . Tesla will fade away.

 

[ERD50]

Based on this, I guess I need to buy a Tesla and put it under "investments" in my net worth statement Strangely, if you look at how Tesla calculates their lease cost it doesn't seem that Tesla is considering these increasing in value.

Tesla vehicles are now ‘appreciating assets’ due to self-driving capability, says Elon Musk

I wonder what estimated ROI is on this.

Saw that, and here's what I found really interesting - the author of that article, Fred Lambert, writes most of their Tesla articles, and is of course, a big fan of Tesla and all things 'EV' (as expected from a writer for an outlet dedicated to " the transition from fossil fuel transportation to electric and the surrounding clean ecosystems.").

The last few articles he's written... I really get a sense of "ummm, What Musk is saying is beyond a stretch". I really sense that even perennial fan Fred Lambert is getting tired of apologizing and trying to spin Musk's words.

So Musk says cars are "depreciating assets" (as most are), the fuller quote:

“Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.”

So in a very loose sense, I could go so far as to accept a tiny bit of this, like if Tesla really expands on what AutoPilot can do, and it is considered to be worth more than you paid for it when you bought it.

But that's a long way from the Tesla being an appreciating asset. What would it take for the Tesla you bought last year to be worth more next year? Well, if it was Autopilot enhancements that made it worth more, a potential buyer of your car could go out and buy a new Tesla with those features. So why would he pay more for your used Tesla? The only way for that to happen is for Tesla to raise prices of their new cars substantially. And then of course, Musk can no longer make the claim for those cars, unless he can repeat this with software upgrade after software upgrade, and manage to keep selling Teslas at the new higher and higher prices, over and over again.

If no one has an alternative, I gotta say Musk is full of it on this one, as he has been on so many other things (there is lots of demand for Model 3, just not at these prices?). I think the walls are cracking, the desperation is growing.

-ERD50

 

[ERD50]

Neighbor brought this up last night , probably already been said Elon Musk has no interest in the Tesla's. He wants to get the Brand out and sell the technology and establish charging stations . Like Exxon / Shell , Etc . Someday he will have all of the charging centers set up when we are forced to drive EV cars . Tesla will fade away.

I don't know that there is that much money to be made at charging stations.

Most people who buy EVs will charge at home, most of the time. Trip takers seem like a fairly small market.

And as we've shown, if you add road tax to the price of an EV kWh, the cost between a gasoline powered mile and an electric powered mile is not so great. Not a whole lot of profit to be made there.

I think there will be a lot of push-back to being forced to drive EVs (other than maybe in some city centers). Still to many people w/o garages and charge access. That's a LOT of infrastructure to install, and for what?

I think the man behind the curtain pulling the strings to wave the "Zero Pollution" banner will be exposed when push comes to shove.

Buy an EV if it fits your needs/likes, but why force them on people? And if they were as great as some here claim, why would we need to force them on anyone anyhow?

-ERD50

 

[samclem]

“Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.”

Maybe Elon shared this same observation with the last couple CFOs Tesla had. It's the type of wisdom from the top that could cause a competent CFO to flee.

 

[kcowan]

Maybe I missed it on this thread but there is an offer to lease Mod 3s with zero residual to provision a fleet of self-driving vehicles. This will increase the cash demands for Tesla! I would imagine no CFO would support such a program?

 

[bobandsherry]

Maybe I missed it on this thread but there is an offer to lease Mod 3s with zero residual to provision a fleet of self-driving vehicles. This will increase the cash demands for Tesla! I would imagine no CFO would support such a program?

Yeah. the lease for M3 was posted earlier. It's not $0 residual, they actually don't disclose what residual value they use. Instead it's such that you have no option to purchase at end of the lease. But yeah, supposedly those vehicles will roll into a "ride hailing network".

 

[Running_Man]

At $180 dollars, virtually every person who would have bought Tesla in the last 5 years will be under water. This could happen quicker than anyone might think possible based on the insane Twitter weekend Elon Musk had. As a quick recap:

1) Said Tesla will make 500,000 vehicles in the next 12 month
2) Said Panasonic is the only reason TESLA could not make more vehicles in Q1
3) Stated will lose money in Q1 and Q2
4) Stated Wall Street Journal is in pocket of big oil, one of his board of directors is CEO of 21st Century Fox who owns Wall Street Journal, co-incidence
5) Accused Dana Hull of Bloomberg of moving market in after hours in order to get money like all traders do for Cocaine and Dominatrix, when she asked Musk what changed from February on Panosonic when he said there were absolutely no production constraints>
There were a bunch of other tweets that were absolutely insane for any CEO to make. Was totally unhinged

 

[bobandsherry]

Heh.... I guess the "good news" tweets by Musk over the weekend are just fueling the stock further. Down another $7.25+ (2.7%) currently. I guess the market doesn't consider that Panasonic was the factor that held back Tesla in 1Q, and perhaps were surprised to hear about the production output level at GF. Or maybe it's because Musk continues to tweet about forecasts (stating that Tesla will make 500,000 cars in next 12 months) even while embroiled with SEC for just this same issue and investors are tired of the legal shenanigans of Musk. Interesting... isn't that 500,000 number the same level that Musk tweeted about earlier this year - so he's now saying that there's zero growth in output from what he said earlier.

TSLA Investors don't fear, TSLA is down 21% YTD while S&P is up 15%. BTW, F is up 22% and GM up 18% (plus dividend payout) YTD. That's means TSLA investors are really down over 40% from the other US car manufacturer's. Guess with this dip/drop again, time to load up once again and hopefully catch some updraft.

 

[Running_Man]

I will state in TSLA investing defense how Ford and GM do are not relevant, it could be that Elon Musk has such great news that he decided to deride all his critics over the weekend. More likely he does not like the news he has to give this week in my opinion

 

[bobandsherry]

I will state in TSLA investing defense how Ford and GM do are not relevant, it could be that Elon Musk has such great news that he decided to deride all his critics over the weekend. More likely he does not like the news he has to give this week in my opinion

Guess depends on what you consider relevant. If a growth (tech?) company can't outperform those two dinosaurs; in a YTD basis when production is much higher than last year, rates are lower and broad market is doing better; there's not a good story to be told for Tesla.

What would you consider to be a more relevant measuring stick for market performance of Tesla this year?

 

[ERD50]

... Or maybe it's because Musk continues to tweet about forecasts (stating that Tesla will make 500,000 cars in next 12 months) even while embroiled with SEC for just this same issue and investors are tired of the legal shenanigans of Musk. Interesting... isn't that 500,000 number the same level that Musk tweeted about earlier this year - so he's now saying that there's zero growth in output from what he said earlier. ....

But he said 400,000 for calendar year 2019, and a run rate of 500,000 in Q4 (125,000/Q), right?

Now he's saying 500,000 for next 12 months, which would be 2019-Q2, through 2020-Q1. So to hit an average of 125K/Q with 125K in 2019-Q4, we need something like, well, it's hard to make the numbers work, considering production dropped in Q1 from 86,555 in 2018-Q4:

110+125+125+140 = 500

So Tesla would need to increase production from a high of 86.6K to 110K for this quarter, then hit the 125K run rate early, and then jump another 15K to 140K in 2020-Q1.

Divide those numbers any way you want, it's hard to see how Tesla does that. How? What's the battery plan?

Is it me, or is this just not adding up?

-ERD50

 

[Hamlet]

Guess depends on what you consider relevant. If a growth (tech?) company can't outperform those two dinosaurs; in a YTD basis when production is much higher than last year, rates are lower and broad market is doing better; there's not a good story to be told for Tesla.

What would you consider to be a more relevant measuring stick for market performance of Tesla this year?

I'm not sure that a 3-month measure of a stock's performance is ever meaningful, to be honest.


I'm a $TSLA bear. I think that they are more likely to go bankrupt ( or have a massively dilutive equity offering ) than provide a positive return over the next 5 years. However, I could easily see them shooting up 50% in the short term. The stock market is pretty erratic and irrational in the short term.

 

[bobandsherry]

I'm not sure that a 3-month measure of a stock's performance is ever meaningful, to be honest.


I'm a $TSLA bear. I think that they are more likely to go bankrupt ( or have a massively dilutive equity offering ) than provide a positive return over the next 5 years. However, I could easily see them shooting up 50% in the short term. The stock market is pretty erratic and irrational in the short term.

If you don't like 3 month, take the 1 year or 2 year view. Each points to a downward trend. And that's after just loads of "good news". Scroll back through the thread, I posted those figures a couple weeks ago.

Just also keep in back of your mind that one company has a $4,000 target on this. Guess that's possible if TSLA does a reverse stock split. [emoji6]

 

[Running_Man]

Guess depends on what you consider relevant. If a growth (tech?) company can't outperform those two dinosaurs; in a YTD basis when production is much higher than last year, rates are lower and broad market is doing better; there's not a good story to be told for Tesla.

What would you consider to be a more relevant measuring stick for market performance of Tesla this year?

I would think if I was a believer in TESLA, which I am not but I do understand their thinking, I would be more interested in the actual level of sales and production. If production did not hit 100-125K by 4th quarter something is wrong. How the market wants to price that I would have no control, but if TESLA ultimately is able to profitably convert populace to EV via Tesla then price will eventually catch up as TESLA's cost per car shrinks dramatically.

Personally I think it is pretty hard to sell a 46K car for 40K and make any money to invest in growth, with a CEO that changes direction with the wind, but that is my take.

Ford & GM have their capacity in place.

 

[bobandsherry]

I would think if I was a believer in TESLA, which I am not but I do understand their thinking, I would be more interested in the actual level of sales and production. If production did not hit 100-125K by 4th quarter something is wrong. How the market wants to price that I would have no control, but if TESLA ultimately is able to profitably convert populace to EV via Tesla then price will eventually catch up as TESLA's cost per car shrinks dramatically.

Personally I think it is pretty hard to sell a 46K car for 40K and make any money to invest in growth, with a CEO that changes direction with the wind, but that is my take.

Ford & GM have their capacity in place.

I'm in same thought as you, but not just focused on production but actual sales. Production that sits in inventory isn't good. And then also looking at trends between now and then - as ERD50 has mentioned, there's a pretty steep cliff to climb. And def interested in the mix of sales. And then how the production/sales trend, especially as tax credits phase out. The market usually is a reasonable barometer to gauge how things are going.

Personally, EV will grow. Just can't get my head around how Tesla translates their sales to support their current market cap, yet even thinking there's further upside. As I keep saying, time will tell.

 

[bobandsherry]

But he said 400,000 for calendar year 2019, and a run rate of 500,000 in Q4 (125,000/Q), right?

I guess it depends on which tweet you go by. In this tweet Musk had said "Tesla made 0 cars in 2011, but will make around 500k in 2019". Four hours later then came back to say "Meant to say annualized production rate at end of 2019 probably around 500k". So did he mean to say that, or did reality slap him upside the head that it wasn't really possible?

Whatever it is, he's now saying it's 500K production for the next 12 months. So taking guidance that Musk has settled on, 360-400K sales in 2019. Doing the math, and using the high side for 2019 sales, based on 1Q/19 sales were 63K, that would then indicate 337K for next 3 quarters (400-63).

If Tesla is going to produce 500K for next 12 months, that means 1Q/20 will need to be 163K:

500K - Next 4 quarters (12 month estimate by Musk)
337K - Less next 3 quarters
------
163K - Production for 1Q/20


If sales for 2019 are on the lower end (360K), then 1Q/20 sales would need to be 200K to reach the 500K milestone. So I guess the ramp up would be something like this?

97 - 2Q/19 (53% increase over 1Q/19)
115 - 3Q/19
125 - 4Q/19
-----
337 - Next 3Q's
163 - 1Q/20 (158% increase pver 1Q/19)
----
500 - 12 months
===

If 2019 comes in lower than 400K units, then that makes 1Q/20 stretch even more.

 

[Running_Man]

Based on our crazy CEO this is what I think happened.

Panasonic told TESLA your sales are not growing enough to justify further investment, MUSK goes crazy at this and insists production is fine.

Panasonic releases statement, MUSK mulls what must be done and knowing that producing cars at 50K for average cost of 60K is a bad look, so he decides to increase volumes by LEASING cars, something not even discussed, but to make easy TESLA runs themself and charges a monthly rental fee and does not allow for possibility of ownership control.

Next to avoid expense makes claim a TESLA is not a depreciating asset because TESLA is going to have a driverless taxicab service and will generate 170K in income in the future from these cars and so no depreciation is needed on these cars that are leased as their useful economic life does not start until they come back and TESLA can offset the cost of production with income expected in the future and from the lease and the total is amortized over the useful life of a TESLA which ELON estimated at 1,000,000 miles.

Therefore income will be recognized as received and depreciation will occur over 1,000,000 mile or about $0.05 cents per mile. Lease cost for a $50,000 Tesla is $0.80 cents per mile, I am assuming the $3,000 deposit stays as a deposit and TESLA realizes in Year ONe $8,000 in income for 10,000 miles and $500 in depreciation expense for a net profit of $7,500 and has another $3,000 in customer deposits.

In the mind of Elon this all makes perfect sense and this is probably what he is pushing to his new 32 year old CFO.

Now his problem of course is how to finance 300,000 cars @ 60,000 each annually when your revenue is only 1/6 of your costs. That is where John Q Public comes in. TESLA UBER is to be a new company that will have the cars transferred to them and there is an initial public offering on April 22 for 55 billion dollars of equity, and will finance the acquisition of TESLA Vehicles to be leased initially for a 3 year period but eventually a ride sharing service with driver autonomy and excess cash flow to be a dividend out starting 2022. This gives him 3 years in ELON time, which is 10 years for us mortals to deliver on his stated new goals

 

[bobandsherry]

Next to avoid expense makes claim a TESLA is not a depreciating asset because TESLA is going to have a driverless taxicab service and will generate 170K in income in the future from these cars and so no depreciation is needed on these cars that are leased as their useful economic life does not start until they come back and TESLA can offset the cost of production with income expected in the future and from the lease and the total is amortized over the useful life of a TESLA which ELON estimated at 1,000,000 miles.

First I've heard of claim of 1 million miles. I'd call that ambitious.

 

[Running_Man]

First I've heard of claim of 1 million miles. I'd call that ambitious.

That was one of his tweets yesterday in defense of the appreciating asset, said body designed for 1 million miles and battery replacement of Model 3 is 5-7K

 

[stephenson]

Yeah, but it is a big number and an even number ...

Marketing.

 

[Totoro]

battery replacement of Model 3 is 5-7K

This implies a sub $100 kWh price, which in turns means Tesla seems to have a large cost leadership on everyone else for batteries. Last I read average kWh costs were >$150.

Or is it Panasonic that has this advantage?

 

[bobandsherry]

This implies a sub $100 kWh price, which in turns means Tesla seems to have a large cost leadership on everyone else for batteries. Last I read average kWh costs were >$150.

Or is it Panasonic that has this advantage?

Implied cost 8 years from now. When if it's not attained how many will remember?