Tesla, the investment

[Nysoz]

Apples and oranges for sure. The S&P speculation has thrown any type of valuation out the window (as little as it had before). So we'll have to wait and see where things end up once the dust settles.

Walmart had 3% growth in revenue where Tesla grew 15% in 2019 and is looking to do around 25% growth in revenue this year.

Walmart had $515B in revenue in 2019. For Tesla to have that much, it would need to sell around 7-8M cars a year and be ramping up their energy division. (I always leave out theoretical robotaxi business when others think it's coming in the next few years.)

Once their current planned factories are completely built out, they'll have room to make around 4-5M cars a year. I think people underestimate the size of the other factories compared to the fremont factory. So they're likely in the early process of thinking about a few more factories already. Rumors are looking at east coast US, another factory in Europe somewhere, a second China factory, India. Ultimately they're hoping for 20M cars annually in 2030.

Tesla has laid out the plan to get there, they just have to execute which is really hard no doubt. Any type of investment or bet on Tesla is a forward looking bet on their continued innovation, execution, and betting that the future of transport/energy is renewable/sustainable.

[Tim]

Rumor is possible model s and/or x refresh. They’ve looked the same for quite some time now and are due for an update. Other possibilities are line optimization, manufacturing improvement, other additions like the heat pump. I think it’s too early for the plaid powertrain but who knows.

they still have parts so they’re still able to repair any broken door latches?

OEM parts is my understanding of Tesla’s supply chain and the current repair strategy. I doubt seriously that all door latches are the same part number. Refresh means new parts. Planned obsolescence in the automotive business is one of the techniques. OEM’s rely on parts availability for resale value support.
The aftermarket for Tesla is nonexistent and the supply chain for obsolete models for discontinued Tesla products hasn’t been a priority. If the solution is “that part isn’t sold separately, you have to buy a new car”, well that is possible. Eventually, used car prices will dive. No repair parts or high cost OEM parts needs a strategy. Part of being an automotive company.

Additionally, Tesla needs to learn to make money without regulatory credits. The old way, earn it.
https://www.google.com/amp/s/fortune...elon-musk/amp/

Tesla has growing pains. Narratives and story stocks eventually stabilize or fail.

[Nysoz]

I couldn't access the article due to a paywall, but regulatory credits will slowly go away as other OEMs ramp up their EVs. But they will probably still be around for another few years at least since most OEMs aren't planning mass EV/PHEV production until 2022-2025. But, if you take out elon's crazy stock tranche compensation, Tesla was profitable minus regulatory credits.

https://www.thestreet.com/tesla/arti...latory-credits

https://cleantechnica.com/2020/10/25...-math-is-hard/

The second article was also published before all this S&P nonsense and the recent $5B at market price raise. They completed that in a day for less than 1% dilution. So now, Tesla has around $20B in cash on hand.

Also, another random obscure thing is apparently once they and auditors agree that Tesla can be profitable forward, they can then realize all the losses from previous 15 years and the $1.8B or so of deferred tax benefits potentially goes straight to the bottom line.

TL;DR: Tesla has deferred the recognition of $1.8B in tax benefits on the P&L because they could not conclude it was likely that they would have income in the future to take advantage of these benefits. Once profitability is likely (and supported by the auditors), this $1.8B (or a portion thereof) gets recognized immediately to GAAP profits. If Tesla concludes now that profitability is likely in 2020 and thereafter, $1.8B (or a portion) gets included in Q4 profits.

https://teslamotorsclub.com/tmc/thre...9047/page-6316 (for whatever reason if this doesn't take you to the right forum post, it's page 6316 or post #126301)

[burritos]

What's the percent likelihood Tesla does electric planes? Moonshot for someone who specializes in moonshots? That could be another 10-15 year non profit endeavor that projects a growing market capture. Without any justifiable traditional financials, an e plane possibly could support continued pyramidal stock growth.

[Molar Mechanic]

https://www.cnbc.com/2020/12/12/tesl...ays-email.html

Production shutdown at the end if a quarter is not a positive sign. Actually, it is a red flag regarding a capacity problem. Last resort for these lines. End of life management shifts to cost containment. Huge cost factor with zero revenue. Without aftermarket suppliers, there are warranty and parts availability issues legally and customer relations. “My door latch broke” and no part available is not a good reason to total the car. Junkyard time? Hope Tesla has some ingenuity, like logistics folks the know how to forecast 5 year supplies.

Man, I'm used to your hard to follow stream of consciousness posts, but have you had a stroke? What are you trying to say? They shut down the line because they cannot afford to keep it open?

[Nysoz]

What's the percent likelihood Tesla does electric planes? Moonshot for someone who specializes in moonshots? That could be another 10-15 year non profit endeavor that projects a growing market capture. Without any justifiable traditional financials, an e plane possibly could support continued pyramidal stock growth.

Elon wants to but battery tech isn’t quite there yet. Elon said for an electric vtol aircraft to make sense you need 400 wh/kg batteries. The new 4680 cell is presumed to be around 300 wh/kg. It’s also interesting because once you use a ton of energy to get to a cruising altitude, you use significantly less to stay up. So once you reach a certain density, small increases after that increases range by a much further distance.

hydrogen or solid state batteries may get there faster than lithium ion but all depends on lithium ion increases.

that being said there are some electric planes out there.

[Zaphod]

dont most car companies close production a couple times of year, including tesla, I thought that was normal.

[hightower]

https://www.cnbc.com/2020/12/12/tesl...ays-email.html

Production shutdown at the end if a quarter is not a positive sign. Actually, it is a red flag regarding a capacity problem. Last resort for these lines. End of life management shifts to cost containment. Huge cost factor with zero revenue. Without aftermarket suppliers, there are warranty and parts availability issues legally and customer relations. “My door latch broke” and no part available is not a good reason to total the car. Junkyard time? Hope Tesla has some ingenuity, like logistics folks the know how to forecast 5 year supplies.

Well that explains their ridiculous ordering/wait time process. I ordered a Model Y back on Oct 15 and was given a “5-9 week” estimate for delivery. That would have been this week at the latest. Over the last week or so I’ve had my delivery estimate pushed back almost daily. This morning it was saying Dec 21st-31st but had changed multiple times over the last 36 hrs or so.
I actually decided to cancel my order this morning because I have little faith that they will be able to deliver a car without some mad rush before the end of the quarter and I know with Tesla that means all sorts of quality control issues. They seem to have an “eh just send it and fix it later” attitude towards their popular models and I dont want to be the chump holding a $60k lemon with all sorts of defects. I’m just going to wait until they have dozens of cars sitting on the lot for me to choose from like everyone else. (I’m guessing this might happen maybe several years from now when their new factories are up and running). By then the new 4680 cells and structural battery packs should be the norm too.

[Tim]

Man, I'm used to your hard to follow stream of consciousness posts, but have you had a stroke? What are you trying to say? They shut down the line because they cannot afford to keep it open?

They have a huge logistics and huge problem with capacity. A very expensive one. Supply is over demand. Purchasing commitments and the whole supply chain is based on purchase commitments. Toooooooo many cars and not enough buyers. Last month of the quarter is a disaster to shut down production lines.On top of that, they still can't sell any cars at a profit. Buying stock is different than running an automotive company. Serious glitches.

[xraygoggles]

They have a huge logistics and huge problem with capacity. A very expensive one. Supply is over demand. Purchasing commitments and the whole supply chain is based on purchase commitments. Toooooooo many cars and not enough buyers. Last month of the quarter is a disaster to shut down production lines.On top of that, they still can't sell any cars at a profit. Buying stock is different than running an automotive company. Serious glitches.

Serious question Tim: are you short Tesla? You seem to have ONLY negative things to say about the company. Which is fine, and a lot of people feel that way.

It would seem if you have such an adamant conviction in your beliefs, put your money where your mouth is. (And you may even hit the jackpot at current levels, which are definitely frothy).

[Nysoz]

Their automotive gross profit was $2.1B q3. Gross margin was 27.7%

[Nysoz]

Well that explains their ridiculous ordering/wait time process. I ordered a Model Y back on Oct 15 and was given a “5-9 week” estimate for delivery. That would have been this week at the latest. Over the last week or so I’ve had my delivery estimate pushed back almost daily. This morning it was saying Dec 21st-31st but had changed multiple times over the last 36 hrs or so.
I actually decided to cancel my order this morning because I have little faith that they will be able to deliver a car without some mad rush before the end of the quarter and I know with Tesla that means all sorts of quality control issues. They seem to have an “eh just send it and fix it later” attitude towards their popular models and I dont want to be the chump holding a $60k lemon with all sorts of defects. I’m just going to wait until they have dozens of cars sitting on the lot for me to choose from like everyone else. (I’m guessing this might happen maybe several years from now when their new factories are up and running). By then the new 4680 cells and structural battery packs should be the norm too.

with delivery estimates that late in the quarter I’m assuming you live on the west coast us. Typically when Tesla delivers cars, the first part of the quarter they ship Fremont cars to Europe then parts of the us far away from Fremont then closest to Fremont last. Just to deliver as many cars as possible in the quarter logistically.

if you’re wanting a model y that’s basically walk up and get, it might be a while. You can always call/email the closest showroom and see if they have any showroom models for sale. Sometimes they’ll give you a minor discount for cars that have been sat in or test driven. A lot of times when they’re trying to empty show rooms end of quarter push you can find these deals.

not sure how long it’ll be for the 4680 cells and structural pack either. First cars getting those cells will be any type of model s/x refresh, cybertruck, semi. If anything it’ll be when the Austin factory gets done so maybe 2 years.

[Tim]

Serious question Tim: are you short Tesla? You seem to have ONLY negative things to say about the company. Which is fine, and a lot of people feel that way.

It would seem if you have such an adamant conviction in your beliefs, put your money where your mouth is. (And you may even hit the jackpot at current levels, which are definitely frothy).

Tesla the investment is different than Tesla the trade. Volatility is a very profitable trading strategy. Some of the "stories" supporting Tesla as an investment are hype.
Frothy is your choice. I just see a ton of smoke and mirrors that will make a long term investment much less optimistic. Don't short. Happy trading, but Tesla at this time is pricing action, not suitable for investment. I currently do not see Tesla growing into its current valuation. For those that want to nibble from a long term viewpoint, it will be a long time. Just an opinion, which could be completely wrong. For sure some have made life changing profits.

Battery Day and S&P don't change the math. Happened to see two articles that some may have missed. Apologies for if a contra point of view is incorrect.
Frothy? I see some significant problems with the story. Two pieces that were relevant from an investment perspective. Take it or leave it.

[Jaqen Haghar MD]

I’m close to Tim on my caution with Tesla.

The thing about the Tesla stock investment story, is that it is a hyper-emotional, complicated explanation, with behind the scenes message-board detailed reasoning. That has always spooked me about the stock also.

It’s not a simple, “They build cars, and make this much money on each car, and there you have it.”

It’s more like, “Hey they make something on cars, and regulatory credits I guess, but the real secret is that they are breaking ground on new factories, and they are going to have self driving taxis real soon, and solar roofs, and flame throwers, and home power cubes, tractor trailers, and short shorts, and vodka, and someday space ships and air planes, and Musk is a genius and I have a poster of him shirtless, and so shut up.”

But with no risk, comes no reward I guess.... I wish the company well. It’s just “Not my bag, baby.”

But on positive news, my 1st battery powered lawnmower is still working out well.
So, baby steps for me.

[Peds]

But on positive news, my 1st battery powered lawnmower is still working out well.
So, baby steps for me.

just wait till that tesla version comes out....