Thứ Sáu, 28 tháng 10, 2016

TSLA Investor Discussions part 29

  • 1/1/2015
    guest
    Can someone explain this, from the shareholder letter, "halfway to the 25% gross margin". I'm not sure what they are really saying with this comment. Thanks!

    Despite many short term costs associated with the ramp, Tesla nonetheless expects to get approximately halfway
    to the 25% gross margin target by end of year.**
  • 1/1/2015
    guest
    In my mind, it means that they are expecting to be making about 12-13% profit on each car by the end of the year.
  • 1/1/2015
    guest
    I think they mean that om cars sold in say late Dec. they have 12.5% margin? As production ramp continues the cost/car becomes lower, while sales price remains, there margin goes up (to 25%).
  • 1/1/2015
    guest
    Or that they will only realize their anticipated profit margin once they hit 400/week or 20K/year.
  • 1/1/2015
    guest
    They need to hit a production rate of 400 cars per week for 2013. That is just over 20,000 Units for the year. Their current reservations are coming it at 2900 a month. While they did have 1200 reservation cancellations this month that number is expected to drop. So if we split the difference hopefully it will stabilize around 2300 a month net in the next few quarters. They would need to ramp up production a additional 25% to meet their current demand. And I have no doubt that their demand will rise.
  • 1/1/2015
    guest
    Where did you get 2900 a month from? Did he state that in the conference call?
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    They stated 2900 reservations for the quarter, not per month...
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    Saw that in the shareholders letter, but as he wrote "currently 2900 per month" I thought maybe Elon had said something about the reservation rate we see today.
    I`ve earlier estimated just abouve 4000 reservations in Q4, but the EU PR campaign might put Tesla well above 4000.
  • 1/1/2015
    guest
    I agree.

    $31+ while feels good for now, still underpriced. It do looks like Obama will win, and that will also remove some fears.

    $35 is a fair price, and under $40 still a strong buy. IMO.

    But lets wait few days and see who is next US president and how market will react.
  • 1/1/2015
    guest
    Speaking of elections, I feel as if the downside risk if Romney wins for TSLA is pretty big. If Obama wins, I'm hoping for a bit of a pop. What do you guys think? I'm fairly confident Obama will be re-elected (although the popular vote may be close).
  • 1/1/2015
    guest
    They burned a ton of cash.... working capital needs will increase as they ramp. Wonder how much cash they will consume in Q4?
  • 1/1/2015
    guest
    Yes, I agree. TSLA would have to prove that they will have a demand without federal incentives. Share price on the long run will go north, but it would take longer to reach whatever level. And short term it might drop, not sure to what level if Romney gets in the office.
  • 1/1/2015
    guest
    If they make 400 cars per week with an average price of 80.000USD with 25% profit margin, they make about 416 million USD in profits in 2013. But what`s their cost base in 2013? Are their annual overhead costs lower than 416 million?
  • 1/1/2015
    guest
    Cash & equivalents as of 2012-06-30 210.55
    Cash & equivalents as of 2012-09-30 85.69

    So they burned 125M. They still got 85M at the end of Q3. Plus they got 220M additional cash shortly after Sep 30.

    They probably do not even needed that 220M, because in Q4 even if Tesla would not be cash flow positive, they would be close enough to barely burn anything. Anyhow 220M helped.
    And inventory already jumped from 66M to 159M...
  • 1/1/2015
    guest
    My bad was thinking month for some silly reason. Previous post is invalid. At 2900 a quarter and using 2300 as our base from cancellation your looking at about 750 a month which is just under their current production rate. They will need to double demand to keep up with production.
  • 1/1/2015
    guest
    I think Tesla can double demand once they really start opening up foreign markets. At present, Tesla is mainly relying on domestic demand for the bulk of the reservation tallies. Once the car hits Europe and Asia, I think the 20,000 cars per year demand will be achievable.
  • 1/1/2015
    guest
    Morgan Stanley's bottom line on the earnings release:

    MS earlier this year revised their estimated Model S production target for 2012 to 2,200 with a reset of their TSLA one-year target price to $47. Now they are seeing Tesla confident at beating that low estimate.

    Good possibility MS will raise their price target in Q4 to $70, where it was before, if Tesla can deliver on their promise.
  • 1/1/2015
    guest
    I think the concerns about a Romney White House are overblown. Unless he were to win handily and win a lot of red seats in the Senate, he's not going to have enough leverage to make very big changes. And I'm sure he'd be more concerned with things like Obama Care than the measly EV tax credit.
  • 1/1/2015
    guest
    Citizen-T, I certainly hope you are correct.

    I do have concern because one of Romney's basic points was to cut tax rates and make up the lost tax revenue by eliminating loopholes and deductions. without getting into the politics of it, I think this is part of the case he is making both to stimulate the economy and to deal with the deficit issue. so I think a tax credit would be something he would look at, and it does seem he is not eager to move from ICE/oil.

    it won't be long before we know whether this is a moot point.
  • 1/1/2015
    guest
    But, even if all that is true, he doesn't have the power to make those changes unilaterally. He needs to convince Congress to go along with him. Think of it this way, Obama has been adamant for 4 years now that we should raise taxes on just the top earners in the country in order to right our fiscal state, but that hasn't happened either. A president "wanting" to do something just isn't good enough.

    Even if this was Romney's #1 concern (which it certainly isn't), the chances that he could get the Senate to do it look nil from where I sit.
  • 1/1/2015
    guest
    Romney would largely have friends in Congress who would side with not investing in companies like Tesla even if it was a Bush program that Tesla is borrowing from.
  • 1/1/2015
    guest
    I don't see why that matters. Tesla has already spent the loan money. They aren't looking for any more. I'm still not seeing the significant downside for TSLA.

    And some friends still isn't enough. He needs a majority of not a super majority of friends. And that he won't have.
  • 1/1/2015
    guest
    Tesla's loans aren't recallable, at least not by Congressional action. What would be at risk is the $7500 tax credit, but it's hard to see how that change could be implemented before 2014. The change would reduce demand for all EVs, including Tesla's, but if it were accompanied by trimming out tax benefits for oil & gas companies, Tesla might enjoy some offsetting gains.
  • 1/1/2015
    guest

    Agree that TESLA is more "untouchable" than not, just that the major focus of a new Republican administration looks like it will be to defund clean energy and companies like Tesla, though they have said they would fund technology. Which majority runs the friends is yet to be seen.
  • 1/1/2015
    guest
    Agree that he is no friend to clean tech, but the comment was that there would be significant downside for TSLA if Romney won, that is what I am contesting. It will surely be harder for the next Tesla, but I'm not concerned about my investment in TSLA if Romney wins tomorrow.
  • 1/1/2015
    guest
    Agreed, and in fact a Romney win (although unsettling to my stomach) might be better for TSLA stock as Romney would most likely push to repeal the high CAFE standards, keep oil subsidies high (thus driving up prices or keeping them high) and possibly raising gas tax (to subsidize the tax breaks for the wealthy). Not to mention keeping import taxes low on the parts that TM sources from abroad.
  • 1/1/2015
    guest
    Let's just agree to agree.

    :)
  • 1/1/2015
    guest
    The likely increased drilling under Romney will keep prices down, temporarily, as would oil subsidies, and no way will he raise gas taxes. The anti EV anti alternative energy climate that he's pushing will also damage the EV industry as a whole, including Tesla. Basically I see a Romney win as another obstacle that Tesla must overcome, something they don't need at this time in their development.
  • 1/1/2015
    guest
    Again I think you are grossly over estimating the power that he is going to have. The EV industry has seen little if any help by this president who is an enthusiastic supporter, why should it see a disproportionately negative affect from one that is not? It just doesn't add up.
  • 1/1/2015
    guest
    Little help? Millions in battery research money, support of the tax credit with talk of increasing it, loans to battery and EV builders, and a basic climate of support for alternative energy. Contrast that with a candidate who calls Tesla a failure and thinks "drill baby drill" is innovative policy. I think there could be a negative effect on Tesla from the change.
  • 1/1/2015
    guest
    I think one difference for Tesla will be that in one case they have to be very cautious in making investments, and stay more on the safe side, keeping more reserves just in case. (For the more or less obvious reasons.) Whereas in the other case, Tesla can be a bit more bold with investments and therefore progress faster.
  • 1/1/2015
    guest
    you can't drill if it isn't there or if it does not make financial sense (too difficult to drill)
    china & india have bigger demand for oil every year!
    middel-eastern countrys need high oil-prices to be able to pay their military & keep people's "welfare"

    so no hope for low oilprices in short- or long-term
    president will not mather

    it's just populist-talk (tell what people want)
  • 1/1/2015
    guest
    Unfortunately, widespread fracking of natural gas and oil could keep fossil fuel prices down. I say unfortunately because there's a good chance that widespread fracking could have nasty effects on the water table and seismic stability. I don't think we understand enough about the long-term side effects of fracking but a fossil-fuel friendly President will most likely green-light massive fracking in spite of that.

    BTW, fracking today is practical because of government funding into the basic techniques a couple of decades ago.

    Consistent support from the government for alternate energy sources will have an impact although it may take some time for that impact to become clear.
  • 1/1/2015
    guest
    I don't think any President has control over gas prices - unless via a change in tax. The price is set by the global market.
  • 1/1/2015
    guest
    Thats a naive statement. Maybe he doesn't have official control over it but he has connections to powerful people.
  • 1/1/2015
    guest
    That comment may be perceived as personally insulting. Please refrain from using this type of language. -mod
  • 1/1/2015
    guest
    No one has control over prices anymore. But you can exert downward pressure on prices by increasing supply. And a good way to increase supply is to remove regulatory obstacles or even subsidize fracking of natural gas and oil, drilling new offshore wells (more deepwater wells in the Gulf, anyone), etc.

    Those are things that a President can do.
  • 1/1/2015
    guest
    True but that oil immediately goes back into the global market where China and India have equal crack at it. If we kept it all here then maybe but we don't. We already subsidize the oil and gas industry and have for decades I believe.

    Anyway, Tesla would be dramatically helped by high gas prices and it looks like that is the trend no matter what the president does.
  • 1/1/2015
    guest
    Gas prices are also set by the value of the currency. The weakening dollar (due to QE) will continue to exert upward pressure on the price of oil in the US.
  • 1/1/2015
    guest
    Am I Imagining it or is the reservation rate now about 50-55 per day? That would imply 18250 - 20075 cars per year. With 25 new stores opening and European reservations beginning soon, imagine what happens if this jumps to 55 per day on average in November, 60 per day in December, 65 per day in January, 70 per day in February, and 75 per day by March? That would convert to 1650+ 1860 +2015 + 2170 + 2321 = 10,016 by March 31st (Minus 10% cancellations or 1001 reservations) + The current 13200 gross reservations (Accounting for current cancellations) = 9015+ 13200 = 22,215 by March 31st. Assuming reservations continue at an average rate of 70 per day into December 31st, we get 22,215+ 19530 = 41745 by December 31st. Imagine what happens if Reservations begin coming in at around 100 per day starting around April-May? Tesla has manufacturing capacity of 500k cars. 100 per day would equal 36500 per year. Reservation growth rate is about 30% year quarter, with 0 advertising. If Tesla wins the MotorTrend car of the year award, and once the supercharger network is up and running, 100 per day may be too low. Furthermore, we can reasonably expect that the Model X will begin getting reservations at a rate of around 55 per day, once pricing is available and all things are finalized.

    In short, by 2014, 150 cars per day on average is possible (And seems realistic assuming a minimum of 30% Quarter over Quarter growth). 150 x 365 = 54,750 cars per year. (54,750 x $65,000) x 25% margins = 889687500 - 300million Operating Expenses = 580million in profit x PE of 30 =17billion 400million. This assumes the average price is 65k, which may be incorrect. Am I missing something? This doesn't even account for the Gen 3. Furthermore, what company growing earnings at 30% Quarterly only gets a PE of 30?
  • 1/1/2015
    guest
    and what about the people who are just waiting for Tesla to show that the cars last and that Tesla will still be around in a few years then +++ to the #s
  • 1/1/2015
    guest
    If Tesla even comes near these figures, they will be under severe pressure to speed up production. Back in 2011 Elon liked to state that "2012 production is sold out" - when that was figured to be 5000 cars. If reservations exceed the sum of cars produced in 2012 and planned for 2013 before year end, the wait will discourage some buyers. But that's a nice problem to have.
  • 1/1/2015
    guest
    Surely it would be much easier for Tesla to duplicate the current production line, than it was to build it from scratch. And easier than it will be to build a new Gen III mass production line. In such a scenario, the question then is whether this would help financing a Gen III sooner, or take away resources from that.
  • 1/1/2015
    guest
    Elon said that they could produce 30,000 Model S if they add another shift.
    And another thing he said, he expected production rate to be higher then 400 a week at the end of the year.

    Both statements were made quite some time ago though.
  • 1/1/2015
    guest
    They are already running 2 shifts and 7 days a week and got 200 or so vehicles for the first time last week (which gave him his at 10K/year figure from the Q3 report), it will take a lot of fine-tuning in the plant to make it to 400/week by the end of the year. I would also like to hear the numbers from this week - was that 200 a spike just in time for the earnings report, or can it consistently be met. If it is consistent, can it be done running a regular work week (say M-F, 10-hour days). I have to think the OT and energy costs are factoring in to not being at the 25% margin target Elon wants.
  • 1/1/2015
    guest
    Seems I made the right moves before the election. Sold down most of my risk assets to minimum positions except for TSLA.

    Market is not pleased with the results of the election as Dems and Republicans still need to work together on taxes and the fiscal cliff. Market is expecting things to get rough for a while here, and I'm inclined to agree.
  • 1/1/2015
    guest
    2900/90 != 50

    And then you need to factor in offsetting cancelations.
  • 1/1/2015
    guest
    Technically he was speaking about now, rate as of November. While 2900/90 represents Jul-Aug-Sep average.
    Not sure rate got that big of increase, but there was a recent press in EU and North America too, plus more stores, more cars on road etc...



    I wanna see $32+ :) We are so close...
  • 1/1/2015
    guest
    Just for fun, I figured out that if TSLA hits 110 I can buy my car purely on profit (that's even roughly accounting for fed/state tax hit).
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    drinker of drinkerofkoolaid, I think you've been reading my mind. the past couple days, I've been imagining annual sales of 80,000 for S and X in three or four years, (prior to Gen3 launch)... but I've also wondered if Tesla would have the capacity or the interest to do this given they want to get to Gen3.

    I found these sales figures very promising... in my rough calculations 80M S/X sales would be about $4 a share in earnings. not only would the stock have a nice valuation, it would allow Elon to pursue Gen3 with the same uncompromising standards as the model S launch... i.e. if 2017 was the year they could deliver the $30M car consistant with Model S standards he wouldn't have to compromise the car to get it out in 2015 to avoid cash drying up for lack of sustained interest in Model S/X (not that I'd be opposed to a 2015 launch!) I think all these S/X out there would only build up anticipation for Gen3 much as ipod built anticipation for iphone (of course not on that massive scale).

    I think the prospect of vastly higher production is an important one. I've read comments here that two shifts on the line could get to 40M. I'm pretty ignorant re production... wondering if some of that capacity is meant to convert over to X production? also wondering how challenging it would be to get a second line going... as someone pointed out here, they might not want to divert resources and attention from Gen3 development... I just wonder if a second line that could get S/X up to 80M would be a no brainer and a go for Tesla if the demand is clear. I've been searching TMC and the web in general re potential large S/X production increase, have not seen much. what do you all think?

    (fwiw, I've become encouraged of the prospect of far greater demand, since the Automobile Car of the Year Award, various encouraging points in conference call re demand (EU being only about 15% of reservations at this point, repeated statements that they expect cancellation rate to be far lower as wait time for reservation holders goes from years to under six months, among other things), and the cumulative impact of the very high satisfaction reported by posters on TMC.)
  • 1/1/2015
    guest
    Pretty sure you mean K rather than M. 40M cars/year would be significantly larger :)

    As I understand it, the eventual limitation is equipment. They bought presses on the cheap from Saturn, but to expand to multiple lines at volume they'd need to buy and install more such ultra heavy equipment. Plus more robots for welding, painting, etc.
  • 1/1/2015
    guest
    Could be Roman Numeral M.
  • 1/1/2015
    guest
    I'm thinking of decreasing my position in Tesla in the coming weeks to pay off the last of my student loans (yay). What are peoples opinion of a good number to sell off at, with the intent of buying again early next year (January)? I bought in at around 27.50. Do you see the stock raising much more than $35 with how crazy things are?
  • 1/1/2015
    guest
    This is a very complicated question and requires first asking whether or not paying off your student loans is a good use of your capital.

    Ask yourself, "what are the interest rates like on my student loans?" Then consider that that interest is tax deductible, so reduce the number appropriately. Then consider whether or not you would expect to make at least that percentage return each year in TSLA.

    Oh, and don't forget to factor in the tax hit you will take when you sell your shares.
  • 1/1/2015
    guest
    Jhall what Citizen-T layed out makes a world of sense.

    doesn't this seem like Tesla has past a critical point here in it's viability Jhall? make your own judgement, but I've bought past couple days and emailed a couple friends suggesting they buy.

    Citizen-T, thanks for saving me from sounding petty... my old job we used M for thousand :wink:
  • 1/1/2015
    guest
    Here is a random thought, now that Obama has been re-elected, he will likely make due on his promise to raise the tax subsidy to 10k per car. This is only necessary to get the ball rolling. Once people become comfortable with charging their cars like they charge their phones, selling tons will become easy as pie.

    Once the Gen 3 comes along, a Tesla with 200miles per charge, would effectively be a free performance level car (Who doesn't like a free lunch?). Most people spend $300-500 a month on Gas. This produces an annual spending range of $3600 - $6000 per year, in the USA. In Europe this number is probably more like $7,200 - $12,000. The average person owns a car for 8-10 years. This implies the average person spends between $28,800 and $60,000 on Gas for their cars. Assume electricity for those charging at home is about 10% of this or about $2800 - $6,000. This gives us a Savings of between $26,000 and $56,000 in the USA. In Europe, assuming electricity costs the same (I think it costs less) this gives us a range of $51,900 and $108,000. Even if the car costs 30k-45k (With good options), it is effectively a free car. I have a hard time believing this won't sell at least 200-300k per year. If Tesla can have their suppliers prepared for this (Now), they can have insane margins (In excess of 25%) and be selling 50-80k of the Model S and X per year and 200K-300k of the 3rd Gen by 2015. The car has fewer parts, and requires less labor to make. Furthermore, the workers are not union. Conceivably, they can source their parts from the USA, (With the exception of the battery pack that is supplied from Panasonic), and take advantage of huge tax benefits. Tesla will be employing 10-15k skilled workers to build their products, and will be making great money doing it. Tesla is American made, effectively a Free car, doesn't emit fumes that cause cancer and other diseases, is environmentally sustainable, and has Amazing performance and aesthetics. Why wouldn't anyone with a brain (That is in an area that can work with EV charging) buy this car? Not only is the car amazing, it will put thousands of dollars into peoples pockets that can be used to stimulate the economy. It's a triple win.
  • 1/1/2015
    guest
    I don't think this is likely in the least bit. Obama's immediate challenge is a fiscal cliff. The country, whether Democrat or Republican is extremely concerned about the deficit and wants spending reductions (they just can't agree on where to cut and whether or not to raise taxes as well).

    I see no scenario in which it is politically feasible for Obama to raise the EV tax credit. At least not this year.
  • 1/1/2015
    guest
    I think this is probably closer to $100-$300 (per car) in the USA. I drive ~20,000 miles a year (a large amount) and spend about ~$300 in premium every month. I think the average travel distance in the USA per year is about 12,000 miles. And I think most people are using regular, and probably getting a little bit better mileage than I do. I tend to jump off the line, every time.
  • 1/1/2015
    guest
    Well, in theory increasing the Tax subsidy would be a smart thing thing to do. It would save those buying the car in the area of 20-30k over the life of the car. This money will be spent elsewhere and will stimulate the economy. Furthermore, the tax subsidy would still be limited to (200k cars per company?) therefore, it would only cost about an extra 30million (Assuming 100k cars are sold) and would produce a long term gain. 30million is pocket change. Furthermore, Obama doesn't need to worry about whether or not he will be re-elected. He will do whatever he wants, so long as he can get the backing to do it. I'm not aware of a reason this couldn't be done if he wanted it to be.


    http://money.cnn.com/2011/05/05/news/economy/gas_prices_income_spending/index.htm


  • 1/1/2015
    guest
    It'd be interesting to know what the critical path through the assembly line is. And even then some machines are easy to run 24/7 while others are harder. I would not think think that sheet metal stamping, for instance, would be on the critical path, but the paint line could be. And then Tesla's suppliers would also have to ramp up accordingly, and they haven't been so good recently.
  • 1/1/2015
    guest
    I don't know where to start. But paint shop is a least of a concern. If factory was designed to produce 500,000 cars, paint shop could handle that much. And you could not sell oven to another factory.

    Robots? Brand new state of art Kawasaki arm that can handle 265kg retails for ~65k USD. Kuka is more expensive, but you got an idea. Imagine CAPEX for 1000 of them... Not that much. Tesla Motors probably use less 300 "big" robots at the moment. And paint bots are cheaper/do not have to be able to lift 200kg+

    So paint shop is easy. But stamping? I know Tesla ordered dies from Japanese company(Toyota influence???) and had to wait 4 months before they got delivered. Presses are even more capital intensive.

    Besides, when you ramp up production, you can use more automation. When BMW moved worldwide production of X3 from Europe to US, the X3 line was much more automated then X6 line on the very same American factory. Because more X3 produced in comparison to X6...

    Assembly? Not much CAPEX involved. But again, some operations would make sense to automate if production rate is high enough. Not too many of them though.
  • 1/1/2015
    guest
    My understanding was that the car couldn't cost more than $40K to get the $10K, above $40K would only get the original $7,500. I would love to have misremembered in this case :)
  • 1/1/2015
    guest
    As much as I am a fan of Tesla I don't favor the tax subsidy. Call me old fashion but I think its best for Tesla to be able to sell these vehicles without having to rely on this subsidy. And as a tax payer its hard for me to feel good about people getting a subsidy on a luxury vehicle.
  • 1/1/2015
    guest
    I'm with you but with how deep the oil and gas companies, not to mention the ICE manufacturers have their hands in my pockets Tesla is at a huge disadvantage if the are the only one not getting subsidized.

    Let's eliminate all these subsidies on both sides. I'm sure Model S can win on an equal playing field without the tax credit.
  • 1/1/2015
    guest
    I've said previously that the mention of a rebate increase to $10K is probably just a ploy for bargaining room. Obama can say "I want to raise the refund to $10K, but as a compromise I'll leave it at $7.5K and make it an instant credit." I doubt increasing the refund could happen, nor do I think it should. The bad press from subsidizing $60K plus vehicles is substantial.
  • 1/1/2015
    guest
    It's worse than that. The oil companies have been getting subsidies for 100 years (they were once a "startup" too) building them up over a century to be the biggest corporations the world has ever seen. Pulling the plug on both would be a huge blow to Tesla and be a rounding error for oil corporations.
  • 1/1/2015
    guest
    Since "miles per year" is an often used statistic:

    The numbers for "miles per year" have changed over time, and peaked around 2005. Many "12,000" numbers are from around 2000, when apparently a lot of statistics were made.

    A graph here shows "Annual Vehicle Miles Traveled per Licensed Driver: 1970�2009"
    Office of Highway Policy Information (OHPI) Highway Finance Data Collection
    (Around 14,000 miles per driver in 2009.)

    When using "per vehicle" numbers, one needs to consider that drivers may use multiple vehicles. And when using "per driver" numbers, one needs to consider that the same vehicle can be used by multiple drivers.

    The EPA uses 15,000 miles for comparison in similar contexts, and while I haven't looked up yet how this number is calculated, it often turns out that EPA is very good at selecting to correct number to use in a certain context. For example they might exclude motorcycle and truck numbers when looking at "normal" cars for personal use. I've seen one statistic comparing various types of trucks, where pick up trucks for personal use had a hugely higher annual mileage (36,000 or so, whereas other numbers where much much lower).

    So I'd recommend using 15,000 miles per year, based on that.

    - - - Updated - - -

    The increase to $10k is only for vehicles up to a certain price limit. For Model S it would remain $7.5k. Personally, I don't think one should give too much to the "bad press", since that is coming from a certain direction which is losing influence as the public becomes more knowledgeable about the potential of EVs. Of course, that potential is demonstrated better by the Model S than by the Leaf or Volt, and increasingly so in recent months, as deliveries and reviews remove doubts. I've heard that argument less and less (except maybe from JP), and post-election I think it will fade out over time (and then be replaced by a *general* desire for electric cars to progress faster).
  • 1/1/2015
    guest
    Here is an old article I dug up. A $43 Billion Tesla: Musk's Incentives Of Interest - Seeking Alpha

    Found this useful a few months ago. Really shows what I am thinking, and understates potential future sales by a decent amount (Which would imply the number will be much higher). I suspect it could triple by the end of next year. Even Morgan Stanley in their initial estimate, gave them a 1 year FV estimate of $150. They have since reduced the figure dramatically, but I am confident that as milestones are met, they will bring the target back into that range. The short interest along makes this seem very possible. Conceivably, it could triple in 1-2 weeks under the right circumstances.
  • 1/1/2015
    guest
    CKessel and Zzzz thanks for weighing in on this one, you made me a little less ignorant here.

    sounds like an additional line could be doable if demand is as robust as some of us think, but not a no brainer to invest management and financial resources given they want to get Gen3 up and going. I guess if they could get essentially the same equipment they have now second S/X ramp up would be far simpler than the one this year. and I guess the increased automation you mentioned would improve margins.

    wish I were in NY next week to ask Elon if this is a possibility and try to read his face! I just have a thumbnail sense (from a brokerage report, and other automaker data) that at $80,000 on S/X they could bring in as much as $8,000 per car whereas, Gen3 would be half of that at best. so an additional 50,000 S/X as good for eps as 100,000 Gen3.

    if nothing else, as an investor I'd hope they'd look at upping S/X production before they follow Gen3 with a new roadster and/or supercar project they've mentioned.
  • 1/1/2015
    guest
    Interestingly, in this later article he became very concerned about Tesla's short-term situation: Tesla: Profit Point - Seeking Alpha

    In the comment section, he agreed with John Petersen, who in September predicted a Q3 net loss of $180 million. It turned out be only $97 million non-GAAP ($111 million GAAP), for a similar amount of delivered vehicles as they expected (253 vs 200).

    Also, while Tesla eventually did decide to make an additional offering, JP vehemently predicted that it would have to do so under very unfavorable conditions ("because investors demanded huge discounts from the market"). However, AFAIK, the offering was under market conditions and perceived as having gone very well.

    So we see a track record where Tesla is doing much better than JP thinks (in spite of his ability to convince others of his views), and his calculations deviate enough from reality to be considered incorrect.
  • 1/1/2015
    guest
    I'm afraid that the entire stock market is going to crash again with the fiscal cliff looming. While I could of course just hold while it recovers(I don't think Tesla will die), I would be paying (low) interest on the small amount of loans I have left.

    I guess becoming free of debt is an emotional decision more than a rational one. But it's tempting.

    I'm bad at analyzing risk, but I really believe that Tesla will eventually make it. I just think there will be a buying opportunity in the future. At the end of the day, Tesla's short term success is linked to rich people making money. If that's not happening, it's going to be slow growing.

    Am I completely off? I know I am young with lots to learn, but I do the best I can. I sold my position in Apple when it was soaring, and minimized my position in 3d printing investments.

    I guess I am just scared! :)
  • 1/1/2015
    guest
    in US, stop subsidizing oil-companys, stop-subsidizing Ev
    It is a win for the state and win for Ev's

    by the way 40 ModelS's ordered in one day in Europe!
    Guess TESLA should think about a third shift in their factory! ;-)
  • 1/1/2015
    guest
    Well, that's a good answer, so then you believe that the return you'd get on TSLA is smaller than the interest you'd be paying on your loans (or at least that it is close enough that it doest justify the risk) . The next thing I would consider is whether it makes more sense to move to a different asset where you could beat that interest rate. For instance bonds or gold.

    Also, you mentioned you are young. Make sure you are taking care of your credit score. Debt free does sound nice, but if you go to buy a house and haven't had any credit history for the past five years you might find it hard to get a loan. You should keep something on the books, maybe pay off everything but your lowest interest student loan.

    I know that debt has become a dirty word these past few years and I understand the desire to rid yourself of it, but debt is really just another financial tool. You should wield it wisely, but I am a firm believer that you should wield it. If you don't, you are leaving money on the table.

    One final word, if you do decide to sell TSLA, don't sell it all. You could be wrong and might never get a chance to buy back at these levels. Make sure your sale is proportional to your conviction.
  • 1/1/2015
    guest
    I think something not being accounted for is the price of GenIII. We expect 3-series type pricing around mid 30k. US sales of 3-series in 2011 was 100,000 (not sure overseas sales). A Chevy malibu is a mid-20k to 30k car, closer to the "everyday persons" car which sold 200,000 in 2011 (again, in US). My point is that I feel Tesla isn't going to break into the 100k cars sold in a year mark until AFTER the GenIII, when they have a sub-30k car. Partly because of price, and partly because widespread adoption will be slower than we all on this forum feel it should.
  • 1/1/2015
    guest
    2010 worldwide sales of 3-series was about 400,000.
  • 1/1/2015
    guest
    I can't recall any recent instance where Tesla said they would go sub-30K. I know people want it but the Tesla branding is not economy cars.
  • 1/1/2015
    guest
    If gas prices are north of $6 by that time the Gen3 would fairly easily be the better deal than a sub-30k ICE and given leases should be common by then the up front price hit for batteries would be diminished.

    In short, there's not likely going to be a need for a sub-30k car by that point in time. Sort of a "skating to where the puck will be" analogy, Gen3 is going to be in the right spot to address that market given where the market forces are likely moving.
  • 1/1/2015
    guest
    Biggest norwegian tabloid newspaper has an article about Tesla Model S today. Calls it "Wild Tesla demand" or something like that. Lots of positive comments. Reservations will keep increasing, guaranteed!

    �Ville� Tesla-tilstander - VG Nett om Nye biler
  • 1/1/2015
    guest
    I doubt that Tesla will do a sub-$30K car (under the Tesla brand, at least). While Tesla is definitely disruptive and loves rewriting the automotive rule book, a Tesla 1-Series/A3/C-Class competitor is probably the cheapest vehicle they'll build. Anything sub-$30K would probably be launched via a sub-brand that competes directly with VW, Ford, GM, Toyota, etc..
  • 1/1/2015
    guest
    Oyvind, I'm not sure what pricing is like there, but would you say that the Model S is viewed as an expensive car in Norway? Obviously in the US the loaded model is seen as pretty expensive but the cheapest model can be considered a value when comparing to other similarly priced cars.
  • 1/1/2015
    guest
    Another Poster from Norway was saying that due to the taxes a similar Audi, or Porsche would run over 250,000 making the model S at an estimated 110,00-115,000 a great deal
  • 1/1/2015
    guest
    Correct. The Model S in base-trim is actually a cheapish car here in Norway. The Performance-model is not cheap on its own, but compared to let say M5, Panamera etc is is dirt cheap. M5 is at least 3x the price of a P85. Panamera 4S(or the Turbo(S)) even more expensive.

    That is the reason I have jumped in an reserved one of these myself. I can now get a car with dream-like performance at a price that I can easily justify for myself. That has never been possible before here in Norway without one beeing in the "filthy rich"-category:)
  • 1/1/2015
    guest
    All thought I bad mouthed Finnish car taxes, it's same here. Car sale tax to EV is 5% when to the comparable (to Model S) ICE is 45% or more ( if some one tried that on States, they would probably use their right to bear arms in original purpose... ; )
  • 1/1/2015
    guest
    The Model S is a real bargain in Norway. It`s priced like a base model BMW 5-series/Audi A6. The reason why it`s concidered cheap in Norway is because of the tax on cars with large engines. A BMW M5 is like 250.000USD. Panameras I belive start at about 150-175"USD.
    In comparison, a VW Passat with 1,6TDI engine starts at about 45.000USD.

    Our goverment wants us to drive zero emisson vehicles, and there is no sign of them changing this even though reduction of incentives will probably start in 2017. So Tesla will sell lots of cars in Norway for many many years. When the EV incentives are reduced, ordinary ICE cars will most certainly be taxed even more than today. So we will continiue buying lots of EVs in the future. And I belive as the grid in other countries get cleaner and cleaner, they will follow in Norways footsteps. Only a guy like John Petersen will overlook the advantages of a clean grid.....
  • 1/1/2015
    guest
    And as usual, whatever gain TSLA had gets from positive news is given back within a few days. The stock cycles up and down, but basically hasn't spent any significant time away from the 28 +/-3 range for about 2 years.
  • 1/1/2015
    guest
    You're right. I mis-imagined the future from Elon's statements about 1/2 of all new cars sold byxxx being electric, etc. Tesla is the beginning, and expects other manufactures to climb on board to take on the sub-30k and sub-compact markets in future years.

    Easy to take social vision and over time gets misconstrued to be corporate vision. Sorry! :)
  • 1/1/2015
    guest
    It can be frustrating, but I really think things are changing direction.

    as to today's down move, you may have seen NPR had a story on the dealership lawsuits.

    Car Dealers Sue Tesla, Citing State Franchise Laws : NPR

    as I wrote in a thread on the story, I think Elon has positioned the company well. the reporter points out that the real threat is not 20,000 Tesla's they don't make money on, the threat is a precedent to cut them out of the 17 million cars they currently sell.

    here's what I think Elon set out very well in his blog a couple weeks back

    The U.S. automotive industry has been selling cars the same way for over 100 years and there are many laws in place to govern exactly how that is to be accomplished. We do not seek to change those rules and we have taken great care not to act in a manner contrary to those rules.
    Automotive franchise laws were put in place decades ago to prevent a manufacturer from unfairly opening stores in direct competition with anexisting franchise dealer that had already invested time, money and effort to open and promote their business. That would, of course, be wrong, but Tesla does not have this issue. We have granted no franchises anywhere in the world that will be harmed by us opening stores.


    Elon clearly takes the position that Tesla sees it as wrong for a manufacturer to open stores in direct competition with existing franchise dealers that had already invested in selling the manufacturer's car. In other words, Elon is basically saying this is legal for us to do, but it would be illegal and wrong for GM, Mercedes or any of the other existing carmakers to drop out of the dealership system and copy us because the dealers have already put time and money into marketing existing carmakers products.


    So as the real worry of automakers is there existing 17 million cars sold converting over to the Tesla Model, Tesla is saying it would be illegal for them to do so. this is why I think there is tremendous room for Tesla and the carmakers to cut a deal. Tesla selling 20,000 cars outside their system is a miniscule concern compared to the existing car manufacturers using Tesla as a precedent to break out of the dealership system.

    - - - Updated - - -

    HVM and Oyvind very helpful information. those are some taxes. I can see why you are both excited about the Model S. I wonder how prevelant this is in other nearby countries. I'm need to start researching taxes across Europe!
  • 1/1/2015
    guest
    The lawsuits are old news and have been in the news cycles for a few weeks now, so it seems unlikely that's the cause. TSLA just moves a lot and frequently without any obvious reason. It's always possible to find some article that came out recently, but it seems to be more correlation than causation.
  • 1/1/2015
    guest
    HVM and Oyvind very helpful information. those are some taxes. I can see why you are both excited about the Model S. I wonder how prevelant this is in other nearby countries. I'm need to start researching taxes across Europe!

    - - - Updated - - -

    ckessel I am in huge agreement that stock movement is so often random noise and attributing it to smaller news items is pointless (every day S&P, Nasdaq, DOW market movement is attributed to one or two stories... it is silly). and you may be right that this is a case of that.

    at the same time, the NPR piece does say there is a hearing with a judge today in NY, and the reporter highlights the threat about changing precedent for existing automakers being a huge motive for dealerships to fight Tesla, something I had not seen directly stated before.
  • 1/1/2015
    guest
    Another thought on the lawsuits:

    Seeing as how Tesla's success is sort of linked to the repaying of the Federal loan... could the federal government just overrule any law that says that Tesla can't do business the way it wants? Sort of in their best interests.

    I don't think the states really have a case, I am just talking hypothetical.
  • 1/1/2015
    guest
    Easy money in June options.

    I think there's some "easy" money to be made in June options on TSLA right now:

    1) If you think buying TSLA for less than $20 share is a good move, then you can sell the June $23 Puts for more than $3. You'll either buy shares under $20 effective, or you'll keep $3. A no-lose situation with no money required up front (but you need to be prepared to either buy TSLA or buy the Put back at a loss).

    2) If you think TSLA is going to get a bump in the next 8 months, then you can do a Synthetic Long selling June $27 Puts and buying June $26 Calls for even money. This trade is slightly better than buying the stock outright today for $27 (trading at about $30 as I write this), with a time horizon of 220 days. This a no-cost way to simulate buying TSLA stock - what you give up is having additional time to let Tesla's success play out. But, the argument can be made that if they're not doing well by June, they're in big trouble anyway.

    I've got an order in for play #2, but it hasn't kicked in yet. There's a lot of Put volume, but not much Call volume. The Put side of the trade is pretty attractive on its own, though (keep $5.50 or buy TSLA at $21.50).
  • 1/1/2015
    guest
    However, in the last 12 months it was mostly above $28, whereas in the previous 12 months, it was mostly below $28.

    I'd think the occasional movements up to about $36 will stick once production of 400/week becomes business as usual, and cash flow becomes positive. If not more.

    - - - Updated - - -

    BTW, new record in short interest:

    31,121,093 as of 10/31/2012

    (Previous record was 30,352,848... two weeks before that)

    Not exactly obvious to me why TSLA would be making new records in short interest. I'd think it would start decreasing now. (Though not necessarily that much until the continued demand question becomes clearer).
  • 1/1/2015
    guest
    I'm watching institutional ownership, it was slowly decreasing from over 59%, to 58%, and now it is 57.95%
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    I have copy pasted % number from the very page you have linked at the time of my post.

    Nice to see ownership parameter suddenly jumping up. That is strange, cuz trade was almost flat yesterday, if not under down pressure. I might be reading too much into it... Any comments on subj would be greatly appreciated.
  • 1/1/2015
    guest
    Any speculation on the bump we'll get tomorrow or Tuesday from the Motor Trend Car of the Year? I know it's not written in stone but that's my guess for the party. 5%? 10%?
  • 1/1/2015
    guest
    Reservation rate have allready exceeded 2013 production goals. With that in mind, what do people here think will be the average price of those 20,000 cars?

    Based on this poll: Poll on battery size. - View Poll Results only 15% choose the 40kWh pack.
    Let`s say 15% choose the 40kWh, 20% choose the 60kWh, 50% choose the 60kWh pack, 10% choose the P85 and 5% signatures in 2013. This would result in an average price of $75,000. Add some options and delivery charge to each car, we`re probably looking at at least $80,000 as an average price of the Model S. Taxes/incentives are excluded.

    With 20,000 sold in 2013, they`ll make about $1,6 billion on the Model S alone. With a margin of 25%, that`s $400 million in profits. Add sales from Model X that share the Model S platform (might not make it to production in 2013?), production of drivetrain for the Mercedes B-class and the Rav4, Tesla will make a profit in 2013 even if they spend $400 million on overhead, r&d etc. I got tired of people saying Teslas numbers dont add up and that they`ll loose a lot of money in 2013 even though Musk claims otherwise.
    It`s quite easy maths, combined with known facts like production of drivetrain for other brands.
  • 1/1/2015
    guest
    While I generally agree, this:
    isn't quite right. Reservations are at about 14,000, but production goals for 2012+2013 = 23,000. That said, Tesla only needs to have a reservation rate of about 24 cars/day to get the extra 9,000 reservations (assuming ~10% drop rate); the current reservation rate is comfortably above that.

    Also, I think you're being a little conservative on the average sales price -- remember that Tesla's revenue is unaffected by the $7,500 tax credit, but does include the destination and prep fees. I ballpark the average revenue at closer to $85,000.
  • 1/1/2015
    guest
    Sorry, meant the reservation pace, not reservation backlog :) Adjusted the post now.
  • 1/1/2015
    guest
    Oyvind, I see the revenue numbers and expenses just as you do. 20,000, at an average of about $80,000, $400 million overhead.

    we may be a little conservative on the average price per car, and even the 20,000 in sales (it seems Elon is repeatedly trying to get the message that the goal is at least 20,000 cars produced), but a) I'd rather have upside surprise than downside, b) the first 3,000 cars sold off waiting list will draw from the pool of most expensive reservations in 2012,... performance and other 85kwh cars. this would mean a small lowering of average prices in 2013 (although I see reservations skewing even more to 60 and 85kwh packs going forward than reservations prior to Supercharger details and glowing reviews).

    bottom line, I expect eps of zero to fifty cents in 2013.
  • 1/1/2015
    guest
    Isn't a good portion of that assumed $400m in overhead already in the margin rate? Not the gen 3 or X R&D, but G&A and other?
  • 1/1/2015
    guest
    This poll is more current and shows what people actually ordered:
    http://www.teslamotorsclub.com/poll.php?pollid=122&do=showresults

    40kWh ~7%
    60kWh ~27%
    85kWh ~25%
    Performance ~41%
  • 1/1/2015
    guest
    as I understand gross margins R&D and SG&A would not be included in the 25% margin rate. you're right that $400 million is likely high... some of what in past has been R&D is now cost of good sold as management has stated. perhaps overhead will be $300-350 million... an easier bar to surpass for a profit next year. I think guidance from company will be coming early next year.

    the main point I saw in Oyvind's post is that a profitable 2013 is very realistic despite what Tesla's detractors have written.
  • 1/1/2015
    guest
    With these numbers we`re probably at an average price of $85,000. With a goal of 25% margin we`re at $425 million in profit from the Model S alone. In other words, Tesla is cash flow positive with the Model S alone at the low 20,000 production rate.
    And then the question is; what do they make on producing drivetrains for Toyota and Mercedes, and are they able to deliver any X`es in 2013?

    Exactly. I am tired of reading comments from people stating that Tesla will go bankrupt shortly, and that they`ll never make money.......
  • 1/1/2015
    guest
    Hey guys,

    I finally got a trading account opened up and bought my tiny little amount of stock this morning :) It is the first company I have ever bought into, and I intend to hold it for a long time... I am fortunate enough to have invested this money knowing that if everything goes pear-shaped, it isn't the end of the world. I got in at the 30.32 price (or whatever it was at closing on friday/opening today). I wanted to buy a few weeks back, you may remember my questions about buying before the Q3 Q&A call. ;-)

    Thanks for the knowledge shared in this thread and I'll be keeping an eye on the thread into the future of course!

    Hope you're all well,

    Charlie -
  • 1/1/2015
    guest
    After the motor trend announcement I am a little disappointed I didn't buy more stock. I was waiting for a sub-29 number. I don't know if we will see that ever again at this rate. :( But I am new to investing to who knows.

    What do you guys think? Speculation abound on a volatile stock! Any thoughts on if it will ever be below 29 again?
  • 1/1/2015
    guest
    My philosophy is that the market always gives you another chance. Some day it won't but I find that saying to be true 100x before it comes up wrong.

    Pay the price you are willing to pay, not what the market is asking for.
  • 1/1/2015
    guest
    Solid words. Resonated with me really. I have been sitting here debating on 30 or 31 but in the end your right. It will give me more time to save up for buying more at 29 :)
  • 1/1/2015
    guest
    In general stocks rise slowly, and retreat often.
    They drop like a stone for reasons know one knows, it's inevitable what the market gives it takes away too.
    On the way to $500/share it may drop to $25, rise to $50, drop again to $35, start moving toward $100, it will be all over the place. There will be plenty of opportunities to buy it at what you are comfortable with.
  • 1/1/2015
    guest
    Bardlebee I think it depends on your goal. If you are looking for a modest movement, say a 25% increase, sure maybe it will dip. if you are a long term investor and are hoping this company will really be the fourth American automaker, what's a couple of dollars between 29 and low 30's entry and a several fold increase? there's always the option of buying half of what you plan and waiting on the other half to see if there is a drop. with unknowable binary events I like to split my bets.
  • 1/1/2015
    guest
    Possibly down to $29, but probably never as low as $25, but then again, what do I know?

    My overall cost basis is $29.66. I just wish I'd bought all I got when I first started buying. I was too timid at first.

    The first 17% I got was at about $27.
  • 1/1/2015
    guest
    What billionaire was it that said, "I've gotten very wealthy buying too late and selling too soon." ?

    :wink:
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    I would like "Quotes from William O'Neil's bestselling book" for 100 please Alex...

    Who is Nathan Rothschild?

    For the win.

    w00t!

    When I came across that sentiment way back in '89 or '90, I liked it so much that I printed it out and framed it. And I've still got it here in my den. =)
  • 1/1/2015
    guest
    Umm. Someone here is still waiting for under $20 share price to invest...

  • 1/1/2015
    guest
    unfortunately the < 2000 will not happen
    think >> 3000 this year. With the night shift running I see big #'s soon
  • 1/1/2015
    guest
    Night shift is already running and has been for a while, along with 7 day weeks. They have made 200 vehicles in a week once, I wouldn't count on seeing 400/week this year, still too many things to iron out internally and externally.
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