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Q2 2020 Update

ir.tesla.com

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Re: Q2 2020 Update

#261

Post by Tuna-Fish »

justapassenger wrote: post #233
SaltyLemonZest wrote: post #226

Earlier quoted context omitted.

There are reasons to believe they might soon be that big. I'm not saying it's close to a sure bet, but in the Netherlands and Norway they're already the top selling brand - I think any reasonable analysis has to admit the possibility that they might soon replicate that success in larger countries.

You need to check your data. Netherlands and Norway are markets where Tesla is failing extremely hard once competition showed up. They used to be one of the top selling brands, 1-2 years ago. Since then, their market share plummeted. For Norway, in 2020, for all car sales, Model 3 is in the 6th place, and with 1-4th place occupied by BEV from "legacy" car companies [1]. Model S/X sales are basically gone. Their marke…

In both the Netherlands and Norway that happened because there were limited-time incentives that ran out, so Tesla shipped disproportionate amounts of cars for the last few quarters when they were still available.

Both the "n% of new cars are Teslas" and the "instant n% drop in Tesla sales" news stories are red herrings. They were both artificially caused by where Tesla allocated their production.

The only signal you can extract from this data is basically that the demand for Teslas well exceeds the company's capability to manufacture them, as whichever country or region they allocate more of their production towards will see a corresponding sales spike. This is mildly positive, but given how long it takes to expand production, I still don't think you can justify the share price on this. Right now, if Tesla had much more cars available, they'd be able to sell them. However, by the time they have ramped up production to match the demand, competitors might have something that matches them.

Re: Q2 2020 Update

#262

Post by marvin »

abenga wrote: post #260
marvin wrote: post #220

Earlier quoted context omitted.

Then, suddenly, the day arrives when battery tech has advanced to the point where it's obvious even to casual observers that battery tech is the future. Hell, it's the present by then. We're almost there. Battery tech is still following an exponential decline in price/performance. Problem is, now the rest of the industry is 10 years behind. They were hoping to just buy this tech from their suppliers, but so is everyo…

How is the Taycan 10 years behind any Tesla model?

Costs 50% more than any. Also inferior range due to 1000 small design & drivetrain details. Can't produce 100,000 of them per year, due to battery sourcing constraints. No global charging network that will make cross-country trips painless.

Technically charges at 350kW, but good luck finding more than a 50kW CHAdeMO along your route. Especially during congested hours. Porche claims intention to install 800 of the fastest charging points globally by 2020, but after years of dragging feet, onus is on them to prove it.

This is what most casual observers fail to get. It's not about the specs of the cars themselves, it's about thousands of small details in production & distribution infrastructure, charging technology and UX that go deeper than just paying a subcontractor to slap it on top.

Many manufacturers can, with a proper effort, make something that seems convincing at a casual glance. But creating a properly competitive product is hard and will take years. Along with a cultural change that I think almost none will mange.

Re: Q2 2020 Update

#263

Post by marvin »

Animats wrote: post #239
9nGQluzmnq3M wrote: post #216

Earlier quoted context omitted.

These are not normal times: flat sales during Q2 is quite an achievement when all your competition tanked by ~30%.

The question here is, what's it worth without assuming great future growth? Tesla is in the price range of BMW, in the midrange luxury segment. Assume they stay there. What's Tesla's value?

Assuming no great growth isn't entirely reasonable when analyzing a company that has had a CAGR of greater than 50% for the last 8 years, and intends to continue.

If you think that's the reality, you should go short in a big way. Stock would be overvalued by 90%.

Meanwhile, a 50% CAGR on an annual revenue of $25 billion is exactly what you want when interest rates will be zero indefinitely. Not at any cost, of course, but if you were so smart that you saw this in 2015, you would have bought then.

Re: Q2 2020 Update

#264

Post by marvin »

reducesuffering wrote: post #248
Animats wrote: post #247

Earlier quoted context omitted.

Tesla's price movement has been in the other direction - upward. The Model 3 was originally supposed to sell for $35,000. Now, it's "$39,990 - $56,990".

More recently there were 2k cuts on 3 and Y and major cuts on S and X.

There's also been some inflation since the Model 3 was announced.

Re: Q2 2020 Update

#265

Post by vardump »

DanCarvajal wrote: post #191
jedberg wrote: post #182

Earlier quoted context omitted.

Tesla doesn't just make cars. They are really a battery company that happens to make cars that use their batteries, but they also make whole home batteries, which include recycling the ones from the cars, as well as solar panels to charge those batteries and charging systems that can be deployed to charge those batteries. I'm not saying the valuation makes sense, but to compare them to a car company doesn't make a to…

Nonsense. Tesla doesn't even make batteries, they pay Panasonic to make their batteries with some Chinese batteries on the side.

They're already producing in Fremont and on track for TWh scale battery production in Texas. I think it's fair to say Tesla is a battery company, at least in part.

Re: Q2 2020 Update

#267

Post by mrep »

jcheng wrote: post #196
hrpnk wrote: post #137

Earlier quoted context omitted.

A company can issue new shares for the index funds instead of requiring those to buy the shares on the market. Otherwise, with the low free float, such demand would move the price higher.

Is there a reason the company would want to do that? Why wouldn't they just let the price move higher?

To raise capital and fuel their growth. They raised 2 billion earlier this year at a price of 767 (1650 now) to fuel their growth because they thought there share price was high then. It seems like a perfect time to announce another massive capital raise to fuel their growth now that their share price is double what it was back then and this page [0] lists 1 trillion dollars worth of sp500 index funds and I know vanguard sp500 etf (voo) which isn't in that list has another 250 billion. sp500 is about 27 trillion so that list alone represents about 4.6% of the market.

TSLA joining the sp500 means those index funds alone will have to buy about 4.6% of TSLA to rebalance so this to me looks like an amazing opportunity to raise a ton of cash to fuel cybertruck/semi/roadster growth. 4.6% of TSLA 300 billion market cap could fuel a 13.8 billion dollar capital raise which could be announced after sp500 inclusion as a quick way to get those funds to the proper weighting.

At least that is my idea. During the call, they said they have 8 billion in cash so they don't need to raise any more capital. But then again, elon also said that right before their 2 billion dollar raise earlier this year so...

[0]: https://www.investopedia.com/articles/markets/101415/4-best-...

Re: Q2 2020 Update

#268

Post by ssharp »

downvoteme1 wrote: post #259
ckastner wrote: post #89

Earlier quoted context omitted.

> "The list goes on in terms of growth & profitability" It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019. It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.…

Tesla is in a spot similar to where Apple was in 2009. The iPhone was a well established product that differentiated itself from a sea of similar looking androids. The world was coming out of a big recession and the iPhone catapulted Apple into a trillion dollar market share in the next 10 years. This is what Tesla investors hope for Tesla’s future. That ten years from now, there would be Tesla and all other car manu…

Apple also managed to mostly stave off competitors from eating away at their incredible margins while still staying within price bounds that make their products accessible to the mass market. I'm not sure Tesla can do the same. There is a big difference between paying the Apple premium on a $2000 computer or $800 phone and paying the Tesla premium on a car. You're dealing with a premium upwards of $10,000.

The Model Y, a compact SUV, starts at $53,000. That is wildly out of bounds for most people. Factor in the low price of gas right now, the unreliability of Teslas, and tax credits that are going away and you really erode away the savings that put a dent into the Tesla's value equation. You're left with a vehicle that competes on value moreso against a smaller luxury compact SUV class.

The big question is if Tesla can continue to see gains from scale that either allows them to address a larger market while still keeping margins at an industry leading level. All that while managing to stay ahead of the influx in competition that will be coming from all the major auto manufacturers as they increase their EV and battery capabilities.

Re: Q2 2020 Update

#269

Post by HALtheWise »

ckastner wrote: post #89
marc__1 wrote: post #28

Earlier quoted context omitted.

Tesla posted positive free cash flow (CFO - capex) for 4 of the last 5 quarters (page 24) and it the only company with increase in # of deliveries among the 10 largest autos globally (page 7). Gross margins >20% is also best in class in the auto industry The list goes on in terms of growth & profitability

> "The list goes on in terms of growth & profitability" It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019. It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.…

There's a difference between dominating a market by market share and dominating by profit margin. Apple certainly doesn't sell the majority of phones, but they do make more money than anyone else on phones by a lot. Similarly, Tesla looks to me like the only company positioned well to ever make large margins selling significant numbers of cars. If you buy that analogy, and realize that the automobile market is about 4x the smartphone market, Tesla could be worth 4x Apple, discounted by however likely you think that future is.

Re: Q2 2020 Update

#270

Post by spectrum1234 »

itsoktocry wrote: post #6

The difference in the narrative versus the financial data is stark: Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more models and expanding global deliveries. Their sales of regulatory credits this year is greater than all of the net income ever earned in their entire history.

To get their market cap you need to factor in solar, batteries, and self driving cars. Just FYI I think you are missing these.
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