they will be the next Delorean

Porsche, Honda, Volvo, & Jaguar will put them out of their misery soon enough

I'll add very little here. I will say that I own a Model 3 Performance, and it is absolutely, hands down, the best car I've ever owned. I'm just home after letting a friend drive it. This friend has a Lambo, a mid seventies Stingray, a Slingshot, and several other high value cars, and in his words, "That was an expensive few minutes." I've got a hundred bucks he buys one in less than a few weeks. He can afford it.

I've followed the bull argument, and the bear argument. I outgrew my ambitions to pick stocks long ago, so as long as they honor my warranty, I don't have a financial dog in the fight. I find it interesting the argument about unsold cars, false reporting of sales and profits etc, when the registrations are public, the quarterlies are audited, and I see the cars driving all over. I do think there is a ton of emotion on both sides, and I think a lot of rich people will get richer on both sides, and those who get their talking points from Twitter will get burned in the middle.

Tread carefully out there folks. Most of us are guppies, and the sharks are always hungry.

That's a good post Endo. I think there's a good chance that what you and your friend are mostly captivated by is the performance electric drive train, not a "Tesla." I guess the Taycan will be a good litmus test and we'll see.

For the record I don't think anyone (here at least) is arguing that cars don't exist, just that there is an alarming lag in registrations and very soft demand after November or so. The two price decreases in the last 30 days speak to this along with the storage lots.

I sincerely hope your warranty holds up, ch11 or not.

Endo Ag. You have been fooled by Elon Musk. I don't own a Tesla but know 4 people who do and express the same satisfaction. Musk is a wizard

LCE said:

---

Endo Ag. You have been fooled by Elon Musk. I don't own a Tesla but know 4 people who do and express the same satisfaction. Musk is a wizard

---

If your first logical fallacy doesn't work out, might as well try another one. From red herring to straw man.

Let me try. I'm glad people like the car, but it's really thanks to the tax payers and the charitable donors... "investors" that the car that Elon designed every bolt of to exist.

I mean seriously how ridiculous is that... I don't think you receive Amazon in the mail and say praise Jesus Bezos who single-handedly built the logistics network that is Amazon - it's an "amazing" service though even when it's not being serviced for 3 months.

Margins are collapsing on this car - especially now that the pool of people who want to tell their friends they paid $60k for a $35k car is more or less exhausted. $1.5B in debt obligations are due this year in cash, and we're starting multibillion dollar investments in 3+ product lines (allegedly) while going operationally cash flow negative (from the corresponding margins). It's no wonder this growth company is laying off 7% of the workforce while dropping their prices twice in 30 days into a pool of limitless demand.

In all seriousness, I hope people that own the car like it - i wish them no ill will. I'm personally not going to spend that kind of money on a depreciating asset that's function is to get me from point A to point B even though I can afford it. Nor do I like the idea of being limited by the mediocre energy density of batteries. It's still not affordable enough to be a mass market car, and people renters, particularly apartment renters, will struggle to justify purchasing an EV.

AHAHAHAH fantastic write up.

Elon is so full of ***** He is is a world class bull ****ter with a cult personality and following.

Elon must be in the spotlight at all times.

And the delusions about Mars are hysterical considering we can't even colonize Antarctica, a literal a block of ice. But we are going to build a spaceship to shuttle 100 people to a planet that has no water and no oxygen.

Elon said his rocket is designed to carry 100 people to Mars! There is something pathological about the way he lies. Maybe he believes his own delusions. 98% of what comes out of his mouth is ignorant bull*****

Read this to see what people have to say about him, the good and the bad. He seems very high IQ. The fact that he is a sociopath who lacks empathy for other people is why he has been so successful.

https://www.wired.co.uk/article/whats-driving-elon-musk

And here is why you need to be wary of investing in Elons companies, Elon doesn't care about profitability.

Quote:

---

Cantrell: "Elon really doesn't care about the money he wants to go to Mars. It was always focused on Mars, none of this was focused on the market. I was the guy who had the market focus, and I was like, 'Hey, look Elon, we've got to have a return on investment.' His response to me was, 'I don't really give a damn about return on investment.'"

---

Elon sells real products and services to consumers, but he sells delusions to investors and the media.

Honestly, what I think he really cares about is power, influence, self indulgence, control, and worshop/being people's idol. Every schtick he has is to further that cause. Whether it's neuralink, the boring company, or the fact that Mars government will be a direct democracy. It's all about pandering to his "Elon the visionary" base. It doesn't matter how disconnected from reality it is, because it's "visionary".

When you boil it down, "his ideas" are typically not very original, not practical, half-baked, and frankly just overrated. He's had 1 company that has had many successful rocket launches, at potentially unsustainable economic, and another company who has successfully made cars at a potentially unsustainable company, and that has some how given him permission to claim rewards without substance. Vision is overrated. "The future" doesn't absolve you from responsibility.

DFWag84 said:

---

they will be the next Delorean

Porsche, Honda, Volvo, & Jaguar will put them out of their misery soon enough

---

Delorean sold less than 10k total cars.

Tesla delivered just under 91k cars last quarter and had the best selling luxury vehicle in the US last year.

http://www.thedrive.com/news/25878/tesla-model-3-beats-bmw-3-series-to-top-2018-luxury-car-sales-charts


Of course Tesla didn't really sell all those cars. It was actually just a giant conspiracy...

Gordo14 said:

---

LCE said:

---

Endo Ag. You have been fooled by Elon Musk. I don't own a Tesla but know 4 people who do and express the same satisfaction. Musk is a wizard

---

If your first logical fallacy doesn't work out, might as well try another one. From red herring to straw man.

Let me try. I'm glad people like the car, but it's really thanks to the tax payers and the charitable donors... "investors" that the car that Elon designed every bolt of to exist.

I mean seriously how ridiculous is that... I don't think you receive Amazon in the mail and say praise Jesus Bezos who single-handedly built the logistics network that is Amazon - it's an "amazing" service though even when it's not being serviced for 3 months.

Margins are collapsing on this car - especially now that the pool of people who want to tell their friends they paid $60k for a $35k car is more or less exhausted. $1.5B in debt obligations are due this year in cash, and we're starting multibillion dollar investments in 3+ product lines (allegedly) while going operationally cash flow negative (from the corresponding margins). It's no wonder this growth company is laying off 7% of the workforce while dropping their prices twice in 30 days into a pool of limitless demand.

In all seriousness, I hope people that own the car like it - i wish them no ill will. I'm personally not going to spend that kind of money on a depreciating asset that's function is to get me from point A to point B even though I can afford it. Nor do I like the idea of being limited by the mediocre energy density of batteries. It's still not affordable enough to be a mass market car, and people renters, particularly apartment renters, will struggle to justify purchasing an EV.

---

$60k for a $35k car?

Do you know how I know you don't know what you are talking about?

There are some legitimate questions about what Tesla will look like in the future as a business, but they are selling a lot of very expensive cars to a lot of very happy customers.

https://electrek.co/2019/02/01/tesla-model-3-tops-satisfaction-brings-joy/

DFWag84 said:

---

they will be the next Delorean

Porsche, Honda, Volvo, & Jaguar will put them out of their misery soon enough

---

Sweet that means I will be able to buy a brand new Tesla in 2037.

Yes I do. The Model 3 has always been the fabled $35k car. Sure people overpaid for some amenities and also paid thousands of dollars of dumb money for a product that doesn't exist ("full self driving"). These people were always going to convince themselves it's the best car ever made. The average sales price in Q3 & Q4 was ~$60k - again for a car marketed as a $35k car... And that's great, until that entire market dries up. Which it clearly did at the end of Q4. That's why there's an attempt at a mid-range variant, significant layoffs, and 2 price drops have all happened recently. Clearly margins are falling apart due to a lack of demand. They still can't sell a car even near $35k and make money, and they can't sell the current car ASP in enough volume at current prices without 2.5 years of pent up demand. It has nothing to do with how happy customers are bringing up their car in every conversation or internet forum they possibly can (I do really appreciate the people who say something like, "drove it 100 miles before the computer crashed and my car shut down... Amazing car though"). That's yesterday's news and no longer relevant to the solvency of Tesla.

Honestly though, I see the appeal of the acceleration you get in a Tesla. That being said, their owners often have a cult like attitude of forgiveness for the inexcusable. Whether it's, months of service time, terrible paint jobs, panel gaps, etc. Owners seem to be happy to tell themselves it's ok as long as my car has the capability of making fart noises.

Gordo14 said:

---

Yes I do. The Model 3 has always been the fabled $35k car. Sure people overpaid for some amenities and also paid thousands of dollars of dumb money for a product that doesn't exist ("full self driving"). These people were always going to convince themselves it's the best car ever made. The average sales price in Q3 & Q4 was ~$60k - again for a car marketed as a $35k car... And that's great, until that entire market dries up. Which it clearly did at the end of Q4. That's why there's an attempt at a mid-range variant, significant layoffs, and 2 price drops have all happened recently. Clearly margins are falling apart due to a lack of demand. They still can't sell a car even near $35k and make money, and they can't sell the current car ASP in enough volume at current prices without 2.5 years of pent up demand. It has nothing to do with how happy customers are bringing up their car in every conversation or internet forum they possibly can (I do really appreciate the people who say something like, "drove it 100 miles before the computer crashed and my car shut down... Amazing car though"). That's yesterday's news and no longer relevant to the solvency of Tesla.

Honestly though, I see the appeal of the acceleration you get in a Tesla. That being said, their owners often have a cult like attitude of forgiveness for the inexcusable. Whether it's, months of service time, terrible paint jobs, panel gaps, etc. Owners seem to be happy to tell themselves it's ok as long as my car has the capability of making fart noises.

---

No, Tesla has always said that they plan to eventually produce a $35k version of the Model 3. The versions they are selling right now are higher-end and more expensive cars than the 35k version. This isn't really hard to wrap your head around.

When someone buys a BMW M3 they are not buying a 330i.

Margins are not collapsing:

Quote:

---

Model 3 GAAP and non-GAAP gross margin remained stable at >20% in Q4

---

and

Quote:

---

Our operating margin also improved significantly in the second half of 2018, changing from being negative to on-par with other premium carmakers. Despite margins in the automotive industry typically being lower in Q4, that was not true for us as our operating margin remained strong at 5.7% in Q4. Our GAAP net income of $139 million was impacted by a non-cash charge of $54 million attributable to non-controlling interests. Free cash flow (operating cash flow less capital expenditures) also improved sequentially in Q4 to $910 million. In the second half of 2018, our cash position improved by $1.45 billion despite the scheduled repayment of a $230 million convertible bond in Q4. We have sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019

---

and

Quote:

---

As we improve the production rate of Model 3, the cost per vehicle continues to decline. It is critical that we continue this trend so that we can keep increasing the affordability of Model 3 while retaining a sustainable level of profitability. The labor hours per Model 3 vehicle declined yet again by roughly 20% compared to Q3 and by about 65% in the second half of 2018 alone. Despite introducing a lower-priced mid-range variant and other headwinds, Model 3's gross margin remained stable in Q4 at over 20%.

---

http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0


As Tesla continues to improve their processes and drive their costs down they will continue to cut their prices and introduce lower margin lower-end vehicles. This has always been their plan and they have been totally open about that.

FML, I just finished typing a word wall and lost it since I got logged out.

With regards to Musk. Is he a genius? Yes. Is he an ass? Yes. Do I believe all his ambitions are achievable or even plausible? No. Has he dragged multiple industries into the future by achieving what many said was impossible? Undeniably.

With regards to TSLA vs TSLAQ?

For every TSLAQ claim, there is a signed and audited financial filing. Demand is zero? Earning call claims over 20,000 European orders at the highest cost models? Claims of insolvent?

Quote:

---

http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0
Free cash flow (operating cash
flow less capital expenditures) also improved sequentially in Q4 to $910
million. In the second half of 2018, our cash position improved by $1.45
billion despite the scheduled repayment of a $230 million convertible
bond in Q4. We have sufficient cash on hand to comfortably settle in
cash our convertible bond that will mature in March 2019.

---

I'm a gambler, but only for fun. I'm a boglehead, not a trader. I see two sides making completely opposite claims. One is backed by an accounting firm and signing SEC statements, the other is tweeting and writing articles for seeking alpha. Both have billions on the line, but only one side is risking jail. If TSLAQ is right, then Tesla isn't a bad investment, it's Enron 2020. Tread carefully, traders.

Fizban said:

---

Gordo14 said:

---

Yes I do. The Model 3 has always been the fabled $35k car. Sure people overpaid for some amenities and also paid thousands of dollars of dumb money for a product that doesn't exist ("full self driving"). These people were always going to convince themselves it's the best car ever made. The average sales price in Q3 & Q4 was ~$60k - again for a car marketed as a $35k car... And that's great, until that entire market dries up. Which it clearly did at the end of Q4. That's why there's an attempt at a mid-range variant, significant layoffs, and 2 price drops have all happened recently. Clearly margins are falling apart due to a lack of demand. They still can't sell a car even near $35k and make money, and they can't sell the current car ASP in enough volume at current prices without 2.5 years of pent up demand. It has nothing to do with how happy customers are bringing up their car in every conversation or internet forum they possibly can (I do really appreciate the people who say something like, "drove it 100 miles before the computer crashed and my car shut down... Amazing car though"). That's yesterday's news and no longer relevant to the solvency of Tesla.

Honestly though, I see the appeal of the acceleration you get in a Tesla. That being said, their owners often have a cult like attitude of forgiveness for the inexcusable. Whether it's, months of service time, terrible paint jobs, panel gaps, etc. Owners seem to be happy to tell themselves it's ok as long as my car has the capability of making fart noises.

---

No, Tesla has always said that they plan to eventually produce a $35k version of the Model 3. The versions they are selling right now are higher-end and more expensive cars than the 35k version. This isn't really hard to wrap your head around.

When someone buys a BMW M3 they are not buying a 330i.

Margins are not collapsing:

Quote:

---

Model 3 GAAP and non-GAAP gross margin remained stable at >20% in Q4

---

and

Quote:

---

Our operating margin also improved significantly in the second half of 2018, changing from being negative to on-par with other premium carmakers. Despite margins in the automotive industry typically being lower in Q4, that was not true for us as our operating margin remained strong at 5.7% in Q4. Our GAAP net income of $139 million was impacted by a non-cash charge of $54 million attributable to non-controlling interests. Free cash flow (operating cash flow less capital expenditures) also improved sequentially in Q4 to $910 million. In the second half of 2018, our cash position improved by $1.45 billion despite the scheduled repayment of a $230 million convertible bond in Q4. We have sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019

---

and

Quote:

---

As we improve the production rate of Model 3, the cost per vehicle continues to decline. It is critical that we continue this trend so that we can keep increasing the affordability of Model 3 while retaining a sustainable level of profitability. The labor hours per Model 3 vehicle declined yet again by roughly 20% compared to Q3 and by about 65% in the second half of 2018 alone. Despite introducing a lower-priced mid-range variant and other headwinds, Model 3's gross margin remained stable in Q4 at over 20%.

---

http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0


As Tesla continues to improve their processes and drive their costs down they will continue to cut their prices and introduce lower margin lower-end vehicles. This has always been their plan and they have been totally open about that.

---

So you really think there's not a significant change in margins between Q4 and Q1.... you're not looking forward and I am. When the price has dropped $3,100 per model since Q4 and the selling mix will feature lower priced models now that reservation holders have been used up (at least reservation holders that will pay $60k for a $35k car anyways - another big hit to margins). Anybody that actually wanted a Model 3 had plenty of time to order it before the credits expired (well half of the credit so far). As a result, I fully expect inventory numbers to go up as well, because if there was limitless demand they wouldn't need to drop prices twice. Margins are collapsing, and it will really become apparent in Q1 or Q2 depending on the timing of COGS and accounts payable. And that's not even getting into the discussion of how Tesla loads up that margin number making it not comparable to other auto manufacturers. It's very likely they need ~17-18% margins the way Tesla shows margins to be profitable.

Their gross margin on the m3 is jack ***** Anyone who falls for their manipulation in this area deserves what they get.

You've posted that before. State your case, not your conclusions.

Have you read the thread?

-They are underreserving for warranty expense by about 2k per vehicle
-They do not attribute any sales expense which should include their retail locations and also some supercharging and referral reward expense
-They do not attribute any non-warranty service expense (a lot which they book to goodwill)
-They include the proceeds of regulatory credit sales, which is fine but has nothing to do with actual margins
-They don't attribute any R&D
-They pull labor from other places in the company and don't correctly attribute

Those are the big ones. But anyone who wants to believe Tesla went from the most inefficient manufacturer to the best in one quarter's time, go ahead.

So again, we are left to believe that either Tesla is perpetrating criminal fraud on a massive scale and that most of its executives will soon be in jail... or that maybe their financials/auditors/etc are basically correct and this car company is shockingly enough building and selling cars.

This is a bit like arguing with the Q people. (or any other internet conspiracy theory... the answer is always that the conspiracy goes farther/deeper than anyone expected!)

I found a parking lot full of Teslas!



Of course this particular parking lot full of Teslas was just offloaded in Belgium...

Fizban said:

---

So again, we are left to believe that either Tesla is perpetrating criminal fraud on a massive scale and that most of its executives will soon be in jail... or that maybe their financials/auditors/etc are basically correct and this car company is shockingly enough building and selling cars.

---

You're always forced into a choice with this company, which says more to you?

1/2019 Tesla: "2019 demand to increase over 50%"
or
1/2019 Tesla lays of 2/3rds of vehicle delivery staff

Endo Ag said:

---

I'll add very little here. I will say that I own a Model 3 Performance, and it is absolutely, hands down, the best car I've ever owned. I'm just home after letting a friend drive it. This friend has a Lambo, a mid seventies Stingray, a Slingshot, and several other high value cars, and in his words, "That was an expensive few minutes." I've got a hundred bucks he buys one in less than a few weeks. He can afford it.

I've followed the bull argument, and the bear argument. I outgrew my ambitions to pick stocks long ago, so as long as they honor my warranty, I don't have a financial dog in the fight. I find it interesting the argument about unsold cars, false reporting of sales and profits etc, when the registrations are public, the quarterlies are audited, and I see the cars driving all over. I do think there is a ton of emotion on both sides, and I think a lot of rich people will get richer on both sides, and those who get their talking points from Twitter will get burned in the middle.

Tread carefully out there folks. Most of us are guppies, and the sharks are always hungry.

---

I would be surprised if their quarterlies are audited, but even audited annuals don't give me much comfort. Enron's were audited as have been many others who failed. More than a few audit opinions have been purchased.

This is a major short opportunity. All the way to $0. But the trick is when does it finally happen. Elon keeps buying time.

TennAg said:

---

Fizban said:

---

So again, we are left to believe that either Tesla is perpetrating criminal fraud on a massive scale and that most of its executives will soon be in jail... or that maybe their financials/auditors/etc are basically correct and this car company is shockingly enough building and selling cars.

---

You're always forced into a choice with this company, which says more to you?

1/2019 Tesla: "2019 demand to increase over 50%"
or
1/2019 Tesla lays of 2/3rds of vehicle delivery staff

---

Well, Tesla is sending almost half their total Model 3 production to Europe now (where they are hiring), and additional cars to China so... that might be about right.

"Tesla plans to be shipping around 3,000 Model 3 vehicles per week in Europe starting in February, according to the port handling company that is preparing to receive them in Belgium. "

https://electrek.co/2018/12/12/tesla-imodel-3-volume-europe-port/

Again, this isn't rocket science. They have shifted a major part of their sales to their overseas markets.

Any competent company with plenty of demand would maintain US operations as-is and gradually add overseas capacity. After all there's almost no infrastructure in place.

After all, the "dinosaur" auto companies make dozens of models/variants and ship them all over the world at extreme efficiency. There's no merit to this story line.

TennAg said:

---

Any competent company with plenty of demand would maintain US operations as-is and gradually add overseas capacity. After all there's almost no infrastructure in place.

After all, the "dinosaur" auto companies make dozens of models/variants and ship them all over the world at extreme efficiency. There's no merit to this story line.

---

It isn't a "story line," it is a simple statement of fact.

Tesla brought on a bunch of people to handle the delivery surge in Q3 and Q4 in the US ahead of the tax credit phaseout and has since shifted a huge chunk of its deliveries to overseas markets. US deliveries are down and they don't need nearly as many delivery staff. (and won't for at least the next couple quarters at least)

Tesla is going to need to stay nimble for the foreseeable future. We are talking about a company that has increased its production 10x in only a few years. It is going to take them some time to stabilize their global infrastructure and logistics given their rate of growth.

"Tesla shares jump after Canaccord Genuity upgrades the stock and predicts 40% rally"
https://www.cnbc.com/2019/02/11/tesla-shares-jump-after-canaccord-genuity-upgrades-the-stock.html

Quote:

---

Tesla shares got off to the week with a good start after Canaccord Genuity upgraded the stock and predicted a monster rally as electric vehicle penetration improves and the company gets closer to building a car that is affordable for the masses.
Canaccord upgraded Tesla to buy from hold and raised its 12-month price target to $450 from $330.
"The EV penetration story is underappreciated by the Street," analyst Jed Dorsheimer said in a note to clients Monday. "We see a more stable 2019 with far fewer concerns for investors in the company."

...

"We view the recent string of price cuts as further proof that the cost cutting and right sizing that the company has undertaken are resulting in concrete movement towards the ultimate goal of an affordable $35,000 Model 3," Dorsheimer said. "With the strong operating cash flow generation of $1.23B and cash on the balance sheet of $3.7B, the liquidity concerns and convertible note repayment are no longer valid concerns in our view."

---

I see Model S demand flat and Model 3 is about to decline.

Quote:

---

Tesla's delivery team said to be gutted in recent job cuts

"There are not enough deliveries," one of the former employees told Reuters. "You don't need a team because there are not that many cars coming through."

https://www.cnbc.com/2019/02/09/teslas-model-3-worries-delivery-employees-said-to-be-cut.html

---

Summary of what lead to today's contempt filing:

1. Last week, Elon lies on twitter
2. Hours later, Tesla's general counsel made him fix the statement and retweet.
3. Tesla GC promptly quits company.
4. Sec files because pre-approval process re material statements not being followed.

The first time there's been any attempt at internal controls that i've seen (apparently didn't go well). SEC finally grows a pair too.

for reference

TennAg said:

---

Summary of what lead to today's contempt filing:

1. Last week, Elon lies on twitter
2. Hours later, Tesla's general counsel made him fix the statement and retweet.
3. Tesla GC promptly quits company.
4. Sec files because pre-approval process re material statements not being followed.

The first time there's been any attempt at internal controls that i've seen (apparently didn't go well). SEC finally grows a pair too.

for reference

---

"Meant to say."

Buckle up Elon...
https://instagr.am/p/BuWse7Gj3vw

The dude can't help but self destruct.

IrishTxAggie said:

---

Buckle up Elon...
https://instagr.am/p/BuWse7Gj3vw

---

I see nothing.

?

Porsche's official announcement that they will be releasing an electric version of the Macan.

Stock up %4+

How do yall explain that? Everyone seems totally negative on Tesla.