TSLA - Tesla Motors

A friend tried to convince me a few weeks ago about buying into tesla but id read so much stuff about how the company was going to go bust had way too much debt, production and quality probs etc etc, looks like the noise got to me, what an amazing turn around and With Tesla so far ahead of the pack and demand for EV is ramping up hugely theres is no reason for it not continuing in this vein to be the next $trillion company ,sa la vie.

The whole thing that sparked this rally was the q3 earnings showed a profit of $143m.
However, there isn't clarity on a number of items that this comprised of:
1. The warranty provision was adjusted, resulting in a release to profit
2. The loans to build Shanghai were restated based on currency movements also resulting in a one-off profit
You take these two one off items out, it didn't make money.

Then you have had the 37 million of shorted shared being unwound and recycled to the current interest of 26 million shares alongside the hype that the Cybertruck will sell in large quantities (doubtful), TSLA will achieve the same marketshare in China as it does in the US and that it will be able to fund it's gigafactory in Germany from EV pooling with other car manufacturers.

What the media is not concentrating on is:
1. The US sales were down 39% on comp quarter in Q3 (yes, 39%).
2. The Netherlands is rushing to buy TSLA's before the sales tax doubled on 1 Jan 2020.
3. TSLA has now lost all of it's US federal tax credits and there are literally dozens of models coming out this year, that while are not TSLA killers, they will be substantially cheaper as they can utilise $7,500 in tax creds for a lot of vehicles (200,000 in volume). How does TSLA feel about competing against 1,000,000 vehicles subsidised when theirs are not? And that's after sales declined 39%.
4. TSLA cannot maintain a competitive advantage in battery tech (nor does it actually have it) for the long term.
5. TSLA has been able to charge upfront, large cash amounts for the promise of autonomous driving capability....yet they still burn cash. What happens when competitors offer this standard as part of their package? Or a subscription based on model?

It will be interesting to see, but there is a reason that 99% of all car manufacturers that have existed around the world have been bankrupt once or twice. It's bloody hard work.

Still, i do like the cars. Autopilot looks cool and it should be a winner takes all race....but we only hear about how TSLA are going and not the competitors. I mean, GM cruise have been delivering door to door pizzas with their cars for a while on trials now but that doesn't get hyped.

Quote:

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Originally Posted by upside_umop

The whole thing that sparked this rally was the q3 earnings showed a profit of $143m.
However, there isn't clarity on a number of items that this comprised of:
1. The warranty provision was adjusted, resulting in a release to profit
2. The loans to build Shanghai were restated based on currency movements also resulting in a one-off profit
You take these two one off items out, it didn't make money.

Then you have had the 37 million of shorted shared being unwound and recycled to the current interest of 26 million shares alongside the hype that the Cybertruck will sell in large quantities (doubtful), TSLA will achieve the same marketshare in China as it does in the US and that it will be able to fund it's gigafactory in Germany from EV pooling with other car manufacturers.

What the media is not concentrating on is:
1. The US sales were down 39% on comp quarter in Q3 (yes, 39%).
2. The Netherlands is rushing to buy TSLA's before the sales tax doubled on 1 Jan 2020.
3. TSLA has now lost all of it's US federal tax credits and there are literally dozens of models coming out this year, that while are not TSLA killers, they will be substantially cheaper as they can utilise $7,500 in tax creds for a lot of vehicles (200,000 in volume). How does TSLA feel about competing against 1,000,000 vehicles subsidised when theirs are not? And that's after sales declined 39%.
4. TSLA cannot maintain a competitive advantage in battery tech (nor does it actually have it) for the long term.
5. TSLA has been able to charge upfront, large cash amounts for the promise of autonomous driving capability....yet they still burn cash. What happens when competitors offer this standard as part of their package? Or a subscription based on model?

It will be interesting to see, but there is a reason that 99% of all car manufacturers that have existed around the world have been bankrupt once or twice. It's bloody hard work.

Still, i do like the cars. Autopilot looks cool and it should be a winner takes all race....but we only hear about how TSLA are going and not the competitors. I mean, GM cruise have been delivering door to door pizzas with their cars for a while on trials now but that doesn't get hyped.

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Thank you for bring some interesting perspective to this debate. Here the so called people's car the Tesla 3 in base guise with no options has an asking price of $75,000 plus on road costs. How many Kiwi families can afford that ? I see at least 10 Nissan Leaf's on the road for every Tesla.

The point is Tesla is not making money on a sustainable basis so how do they fund future R&D ? Meanwhile the giant and highly experienced VW group have invested $91 Billion in EV...Tesla shareholders might like to ponder what the result of all the R&D research might involve ? Just one major game changing technological advancement that's patented by the VW Group could see the playing field change dramatically. https://europe.autonews.com/automake...estment-rivals

VW have not spent $91B, they plan to spend it on EVs and batteries over the next ? years. In the meantime they are producing the ID.3 which looks like it could be a winner. Only trouble is that they have software issues, so they will have 10,000 large costly paper weights until??? They will be individually serviced by a software engineer when they find a patch.
The Koreans are making some great electric cars, but not in any volume yet,
The new Leaf is just over NZ$60,000. It is much better than the old ones you see everywhere, but I understand they still have issues with their batteries (heat management which is one reason the old ones are dying early giving EVs a bad name)
There are some really interesting EVs being sold in China.
The real competition is ICE vehicles. In Norway EVs are now 42% of the market, add in plug in hybrids and it was 56%. VW is suggesting that will be the norm in less than a decade, hence their investment in EVs.
The "mad fund manager" with the $6,000 target is assuming Tesla have 15% of the EV market.

Quote:

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Originally Posted by upside_umop

The whole thing that sparked this rally was the q3 earnings showed a profit of $143m.
However, there isn't clarity on a number of items that this comprised of:
1. The warranty provision was adjusted, resulting in a release to profit
2. The loans to build Shanghai were restated based on currency movements also resulting in a one-off profit
You take these two one off items out, it didn't make money.

Then you have had the 37 million of shorted shared being unwound and recycled to the current interest of 26 million shares alongside the hype that the Cybertruck will sell in large quantities (doubtful), TSLA will achieve the same marketshare in China as it does in the US and that it will be able to fund it's gigafactory in Germany from EV pooling with other car manufacturers.

What the media is not concentrating on is:
1. The US sales were down 39% on comp quarter in Q3 (yes, 39%).
2. The Netherlands is rushing to buy TSLA's before the sales tax doubled on 1 Jan 2020.
3. TSLA has now lost all of it's US federal tax credits and there are literally dozens of models coming out this year, that while are not TSLA killers, they will be substantially cheaper as they can utilise $7,500 in tax creds for a lot of vehicles (200,000 in volume). How does TSLA feel about competing against 1,000,000 vehicles subsidised when theirs are not? And that's after sales declined 39%.
4. TSLA cannot maintain a competitive advantage in battery tech (nor does it actually have it) for the long term.
5. TSLA has been able to charge upfront, large cash amounts for the promise of autonomous driving capability....yet they still burn cash. What happens when competitors offer this standard as part of their package? Or a subscription based on model?

It will be interesting to see, but there is a reason that 99% of all car manufacturers that have existed around the world have been bankrupt once or twice. It's bloody hard work.

Still, i do like the cars. Autopilot looks cool and it should be a winner takes all race....but we only hear about how TSLA are going and not the competitors. I mean, GM cruise have been delivering door to door pizzas with their cars for a while on trials now but that doesn't get hyped.

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Thanks Upside,heres my friends reply to you.He appreciates the stress testing.

"The reasons for the recent surge in Tesla's share price goes far beyond the Q3 earnings. One of the biggest reasons is the rapid completion of Gigafactory 3 in China (in less than a year), and what appears to be a rapid ramp up in production of the Model 3. The Model Y is also appears to be going into production ahead of schedule and will probably be released in the first half of 2020.


The reduced Q4 sales of the Model 3 in the USA are due to supply constraints rather than lack of demand. For example some customers faced 2 months delays when they ordered a Model 3. Tesla didn't have any excess stock sitting around at the end of 2019, so they have no problems selling what they produce. As the China factory ramps up and supplies China, Tesla will no longer need to export Model 3 into China and will have more available to supply the USA market.


The same thing goes for the European market. Tesla currently only has a single factory in Fremont USA manufacturing the Model 3, so the number of cars it can supply into Europe is limited. That's why Gigafactory 4 is being built.


Regarding where the money for building the factories comes from: The funding for Gigafactory China came from a consortium of Chinese lenders at favourable interest rates. The factory is wholly owned by Tesla, so it isn't the usual joint venture that most non-Chinese companies have been forced into. Let that sink in. The Chinese have paid Tesla to build Gigafactory 3, and Tesla owns the factory.


Tesla also enjoys far higher gross margins on each car it sells than other car makers. In Q2 2019 Tesla reported a gross margin of 17.2% per car, and this margin has increased over 2019.
https://ark-invest.com/research/wrig...s-gross-margin


Some are predicting that the Chinese Model 3 will have a gross margin of 35%
https://www.teslarati.com/tesla-made...rgin-cash-cow/


So that leaves plenty of revenue on the table to go towards building new factories.


Let those profit margins sink in. Most other car makers manufacture their EVs for little or no profit. Many are sold at a loss. (primarily due to the high cost of battery packs)


And that leads to Tesla's advantage in batteries: Tesla's battery packs are cheaper to build that their competitors. Tesla's battery management, including thermal management, is superior to other car makers. Sounds like a competitive advantage to me. And as the competitors eventually improve their batteries in few year's time to match Tesla's current offering, Tesla with only have pulled further ahead and continued to maintain their advantage.


And finally the Cybertruck: 250,000 people have laid down a $100 deposit to buy one, so there is plenty of interest. I've seen reports from business people operating pickup trucks who will shift to the Cybertruck when it comes available, based purely on its specs. It will be much cheaper to operate than an ICE truck and far more durable and reliable. Most of those people couldn't give a rat's arse what it looks like. That being said, the production release of the Cybertruck is too far out to have a material effect on Tesla's current share price, but as pre-production Cybertrucks start to circulate on the roads in a year's time, they will give a bump to the stock price (as is happening with pre-production sightings of the Model Y)."

https://www.stuff.co.nz/motoring/118...ion-complaints

It will be interesting to see if they investigate, the issue was prompted by a non Tesla owner short seller. For a long time there has been a $10,000 reward posted by a neutral party for anybody able to show car error rather than driver error. So far, nobody has successfully claimed it. I suspect the incredible acceleration of Teslas is to blame as people have little time to react if they hit the wrong pedal. There does seem to be an issue with phantom breaking, so I imagine that has caused a few noise to tails.
The short sellers have tried all sorts of lies - Elon has cancer etc, but hope if they sling enough mud some will stick.
The airport carpark fire in Norway was claimed to be a Tesla by the short sellers, but proved to be a diesel model with a know problem.
https://europe.autonews.com/automake...norway-airport
There are on average more than 150 car fires a day in the USA, but watch the internet light up if it happens to a Tesla.

BMW was in the gun last year https://abcnews.go.com/US/mysterious...ry?id=60843215

+ + WOW !!! TSLAs shares hit US$650 in after hours trading after a fantastic last qr and Musks statement that they will sell 500,000 units this year not counting trucks which when they are produced will be a massive winner, pickups to 16 wheelers , my early Jan purchased has doubled already and rumour is that we are headed to U S $800 per share ($1200 Kiwi ) shortly, say mid year, hmmmmm ! .

Interesting times...good cash flow

Good to see the market continue to reward this company for it's solid underlying performance....