Tesla

[2o6]

I think it could work. It's much less cringey than a BMW X6 Competition. What competition, exactly? I wish more auto makers would develop a little sense of humor.

It's weird. It's referencing something that doesn't translate across cultures and not everyone finds funny.


Also it's gonna wear out the humor of Spaceballs.


It's weird.

[r0tor]

Space balls can not possibly be worn out

[MrH]

Elon has seen one movie I'm convinced.  It wasn't funny the first time, and gets worse the more he goes with it.

[cawimmer430]

Shot a Tesla Model 3 Performance and a Model X recently.

[12,000 RPM]

Space balls can not possibly be worn out

I think it's only appeal is the memories it conjures up for people who saw it new

It's bad

[r0tor]

I think it's only appeal is the memories it conjures up for people who saw it new

It's bad

No way... Watched it recently with the son and we both laughed hysterically

[Soup DeVille]

I think it's only appeal is the memories it conjures up for people who saw it new

It's bad

You're crazy.

A lot of the movies it spoofs are also old now too, and if you haven't seen them you might miss some jokes, but honestly there's just a lot of good old fashioned humor in it too that needs no pop culture relevance.

[MX793]

I feel like Spaceballs was kind of the beginning of the end for Mel Brooks.  It was good, especially if you were into scifi and familiar with what was being spoofed, but Blazing Saddles and Young Frankenstein were his best.

[12,000 RPM]

I feel like Spaceballs was kind of the beginning of the end for Mel Brooks.  It was good, especially if you were into scifi and familiar with what was being spoofed, but Blazing Saddles and Young Frankenstein were his best.

That is prob part of why I judge it so harshly now.... but when I saw it I had no idea who Mel Brooks was, and was still unimpressed.

[MrH]

Holy shit, none of this adds up   This 10Q is going to be interesting.

More cars sold than produced for the quarter, but inventory went up?

[12,000 RPM]

I thought of you when I heard the news. Was wondering how your shorts were looking

[Morris Minor]

I thought of you when I heard the news. Was wondering how your shorts were looking

The auto market is entering a tough period in general. So it will be bumpy. IMO Tesla's main problem is the behemoth established competitors are slowly turning their guns & bringing them to bear on EVs.

[12,000 RPM]

I feel more like Tesla gets in its own way. I get the sense they'd be more profitable with a more conventional dealer/service model and less bespoke design/parts.

I'm not seeing a threat to the Model 3 yet, but I think a big part of that is, as Tesla is showing, it's currently impossible to make something like a Model 3 profitably. It's going to take a breakthrough like Toyota's upcoming solid state batteries to make the economics work. Once that floodgate opens then yea I think it will be game over for Tesla.

But that's a long time to hold a short position...  "The market will stay irrational much longer than you can stay solvent"

[MrH]

I feel more like Tesla gets in its own way. I get the sense they'd be more profitable with a more conventional dealer/service model and less bespoke design/parts.

I'm not seeing a threat to the Model 3 yet, but I think a big part of that is, as Tesla is showing, it's currently impossible to make something like a Model 3 profitably. It's going to take a breakthrough like Toyota's upcoming solid state batteries to make the economics work. Once that floodgate opens then yea I think it will be game over for Tesla.

But that's a long time to hold a short position...  "The market will stay irrational much longer than you can stay solvent"

Yep, that's pretty much where we're at.   Saw this on twitter and it totally hits the nail on the head:

"The trouble with "the shorts" is that they have this gnarly cognitive dissonance: 1. Elon is a fraud and 2. this quarter's numbers will be terrible.  Can't have both"   That sums it up well. 


I'm just short via long dated puts.  I've lost something, but nothing crazy.  With the big spike from yesterday, I'll put some more $10-$20 strike price puts that expire in summer of 2021.  Timing this thing is a nightmare, there are so many avenues for subsidies, transferring money between companies, etc.  They'll raise capital at any terms, they don't care.  Structurally it's bankrupt, but they're going to drive this thing into the wall at 100 mph.

The numbers don't make any sense though.  Foreign exchange grew favorably substantially for the quarter, despite the US dollar getting stronger in every foreign market they sell in, interest rates dropping...every variable went the wrong direction here and they've said multiple times they don't hedge here.

Profit swing of $550M on declining revenue.  They threw everything they had at it this quarter from an accounting standpoint for some reason.  There's a lot of theories, but the most probable one:  In the financial statement, there's small print that says the margins were improved by non-reoccuring items but doesn't account for that comes out to exactly.  We now know what created the Q3 2018 miracle: a massive rebate from Panasonic.  The most likely explanation now is a big rebate from existing carry over suppliers from the Model 3 for sourcing them the business for the Model Y.

There is zero change to their fundamentals.  The growth narrative is dead.

[12,000 RPM]

You don't think the Shanghai Gigafactory/China will help at all? I realize it's kind of a "dont worry, we will make up for the losses with volume" situation but that seems like a positive bullet point for the growth story. IF the factory gets up and running w/o problems, which I would probably not bet on.

[MrH]

You don't think the Shanghai Gigafactory/China will help at all? I realize it's kind of a "dont worry, we will make up for the losses with volume" situation but that seems like a positive bullet point for the growth story. IF the factory gets up and running w/o problems, which I would probably not bet on.

The whole factory is strange.  It's being kept off the books, so basically it's all paid for with General Mao's money.  I don't think the demand and capacity equation in China makes any sense.

Overall, September China EV sales were down 24% YoY.  Demand for the model 3 has been consistently 550-650/week for all of 2019 in China.  That's nothing, and certainly not enough to justify a plant.  Even a 30% price cut won't get them enough demand to pack that capacity full.  If an auto plant isn't running 80%+ capacity, it'll hemorrhage money.

[r0tor]

Ouch... Tough day for Tesla shorts

[MrH]

Ouch... Tough day for Tesla shorts

Tough day, but not a tough year really.

[r0tor]

Why would you be short a whole year?

[MrH]

Why would you be short a whole year?

Most people who are short Tesla are not naked short the stock, just buying and selling options.

[12,000 RPM]

The whole factory is strange.  It's being kept off the books, so basically it's all paid for with General Mao's money.  I don't think the demand and capacity equation in China makes any sense.

Overall, September China EV sales were down 24% YoY.  Demand for the model 3 has been consistently 550-650/week for all of 2019 in China.  That's nothing, and certainly not enough to justify a plant.  Even a 30% price cut won't get them enough demand to pack that capacity full.  If an auto plant isn't running 80%+ capacity, it'll hemorrhage money.

Well part of the EV drop is China cracking down on companies spitting out garbage. Golf carts passed as cars and shit. 33K cars a year is pretty sad considering the size of China's market and what Tesla is selling here... but how much of those low sales are a supply issue? I think sales will ramp up once the Shanghai GF gets online.

[MrH]

Well part of the EV drop is China cracking down on companies spitting out garbage. Golf carts passed as cars and shit. 33K cars a year is pretty sad considering the size of China's market and what Tesla is selling here... but how much of those low sales are a supply issue? I think sales will ramp up once the Shanghai GF gets online.

This is 100% the false narrative Tesla is pushing.

This last quarter, they sold cars in China to their own Chinese subsidiary.  This is very much a stuffing the channels situation.  They are not supply constrained at all though.

[Morris Minor]

They're getting better.

The biggest survey of Tesla drivers ever conducted shows that the automaker has finally figured out how to deliver cars with fewer problems, cutting the rate of defects nearly in half.
more...
https://www.bloomberg.com/graphics/2019-tesla-model-3-survey/

[GoCougs]

Third quarter revenue down 39% in the US yet record "deliveries."

[Rich]

Third quarter revenue down 39% in the US yet record "deliveries."

Could be a lack of selling carbon credits to other automakers. I think that's where they had been making a surprising amount of their revenue?

[12,000 RPM]

Third quarter revenue down 39% in the US yet record "deliveries."

Logic and skepticism should go together

Model 3s cost less than Model S/Xs... guess what they are selling more of

[MrH]

And the margins suck on the Model 3. They should have stayed a niche luxury brand.

[NomisR]

Wasn't Musk saying that Tesla's fortune is going to be ok once Model 3 is going to hit production while all the skeptics are saying, no because if they're already losing money off of high profit Model S and X, how are they going to improve the situation with more low profit Model 3s...

[Morris Minor]

Wasn't Musk saying that Tesla's fortune is going to be ok once Model 3 is going to hit production while all the skeptics are saying, no because if they're already losing money off of high profit Model S and X, how are they going to improve the situation with more low profit Model 3s...

Would you prefer to sell a 1,000 $10 widgets with a net profit of $1 on each?
Or 200 $25 luxo-widgets with a net profit of $3 on each?

[Soup DeVille]

Would you prefer to sell a 1,000 $10 widgets with a net profit of $1 on each?
Or 200 $25 luxo-widgets with a net profit of $3 on each?

Those sound like well researched numbers that I can't argue with.