Jump to content

TSLA - Tesla Motors


Palantir

Recommended Posts

If I had to bet, I'd bet on Tesla staying out of manufacturing raw components.

 

What they have done very well is develop battery packs and the maximizing software. These are their competencies on the battery/storage side of the equation.

Link to comment
Share on other sites

  • Replies 4.6k
  • Created
  • Last Reply

Top Posters In This Topic

If I had to bet, I'd bet on Tesla staying out of manufacturing raw components.

 

What they have done very well is develop battery packs and the maximizing software. These are their competencies on the battery/storage side of the equation.

 

They are more vertically integrated than any automaker I can think of. In part because as a startup, suppliers didn't want to work with them for a long time, or at least, didn't want to put their "A" teams on the job, so they had to learn to do a lot internally. Wouldn't be so out of character to make cells.

 

In fact, buying Maxwell Tech might mean that they could want to go a different direction than most of the industry eventually... But that's a low probability scenario for a long while, IMO.

Link to comment
Share on other sites

Don’t know much about that business but they’re interested it seems...

 

https://electrek.co/2020/02/11/tesla-building-pilot-battery-cell-manufacturing-line-fremont/

 

There you go. Building up expertise and showing interest.

Wow color me totally wrong on that. Pretty nuts, but I guess if they see enough demand in cars + storage/home then there is enough volume to warrant this. Given the way they have treated their other products it does not seem likely they will be manufacturing for anyone other than Tesla/Elon products.

Link to comment
Share on other sites

Don’t know much about that business but they’re interested it seems...

 

https://electrek.co/2020/02/11/tesla-building-pilot-battery-cell-manufacturing-line-fremont/

 

There you go. Building up expertise and showing interest.

Wow color me totally wrong on that. Pretty nuts, but I guess if they see enough demand in cars + storage/home then there is enough volume to warrant this. Given the way they have treated their other products it does not seem likely they will be manufacturing for anyone other than Tesla/Elon products.

 

In my uninformed view, it's just another option for them, which could potentially be something big and valuable, or simply as a hedge.  Taking a step back, EVs are a nascent industry and there are lots of stuff still to be figured out.  As such, it's not clear to me where margin will accrue in the value chain.  Will it be the hardware (range?  speed?), software (auto updates?  farts?), self driving, brand, charging network, manufacturing, battery tech, etc.?  I have no clue.

 

So they've simply decided to do it all - an incredibly audacious strategy but it seems to be paying off.  If they think their competitive advantage is engineering, then it certainly makes sense to spend some money looking into battery tech.  Maybe they'll come up with a better mouse trap, maybe not.  At worst, it'll serve as a hedge in case battery manufacturing tech becomes concentrated in a couple of global giants who will have everyone over a barrel. 

 

Link to comment
Share on other sites

Don’t know much about that business but they’re interested it seems...

 

https://electrek.co/2020/02/11/tesla-building-pilot-battery-cell-manufacturing-line-fremont/

 

There you go. Building up expertise and showing interest.

Wow color me totally wrong on that. Pretty nuts, but I guess if they see enough demand in cars + storage/home then there is enough volume to warrant this. Given the way they have treated their other products it does not seem likely they will be manufacturing for anyone other than Tesla/Elon products.

 

In my uninformed view, it's just another option for them, which could potentially be something big and valuable, or simply as a hedge.  Taking a step back, EVs are a nascent industry and there are lots of stuff still to be figured out.  As such, it's not clear to me where margin will accrue in the value chain.  Will it be the hardware (range?  speed?), software (auto updates?  farts?), self driving, brand, charging network, manufacturing, battery tech, etc.?  I have no clue.

 

So they've simply decided to do it all - an incredibly audacious strategy but it seems to be paying off.  If they think their competitive advantage is engineering, then it certainly makes sense to spend some money looking into battery tech.  Maybe they'll come up with a better mouse trap, maybe not.  At worst, it'll serve as a hedge in case battery manufacturing tech becomes concentrated in a couple of global giants who will have everyone over a barrel.

 

It's also similar to Apple's strategy of trying to control as much as possible all the core technologies on which they depend. They don't want to somehow end up in a position where a supplier has life & death control over them (not necessarily through malice, but maybe through incompetence... Apple is no doubt moving away from Intel on the Mac platform in good part because Intel has had so much trouble delivering on its roadmap these past years... It has taken them a while to build in the silicon design expertise, starting with the acquisition of PA Semi, but they've been able to do it on the mobile side and will no doubt eventually leverage that on the Mac side).

 

Tesla is probably looking ahead and thinking that if they're going to reach their goals, it's going to put a lot of stress on battery production ramp and they'd like to see the pace of innovation stay high, and they don't want some partner to not be able to keep up. It's probably why the Gigafactory is a partnership with Panasonic (they couldn't do it alone at the time), and maybe why at some point in the future, future gigafactories won't be partnerships at all. But who knows, I'm just guessing by going with what I'd look at as options if I was in their place ¯\_(ツ)_/¯

 

Financial people think about these things from a financial perspective, but operators have to think about the kind of problems they're faced with, and problems with suppliers are up there (and have been especially problematic for Tesla).

Link to comment
Share on other sites

Tesla recalls 15.000 Model X because of a power steering issue: https://www.businessinsider.com/tesla-recalling-15000-model-xs-because-of-power-steering-issue-2020-2?r=US&IR=T

 

I guess this must be exhibit 420 that this company does not care about it's customers: https://twitter.com/ex_tesla/status/1227746692029542400?s=21

 

Long story short:

- in 2018, Tesla recalled the Model S built before 2016 because of issues with the steering assist motor bolt

- at that time, Tesla mentioned in the recall message that the recall only affected Model S and not the Model X or the Model 3

- the person whose tweets I referred to, who is an ex-engineer at Tesla, indicates that the writing was on the wall that the Model X would be affected

- fast forward to 2020: they recall the Model X built before 2016 for the same issue

- they remove from the 2018 recall message the reference to the fact that the recall only affected Model S and not the Model X or the Model 3

 

 

Link to comment
Share on other sites

Smart move to issue capital at these stock prices: https://ir.tesla.com/news-releases/news-release-details/tesla-announces-offering-common-stock

 

Elon will contribute the full $10m and Larry $1m, a real vote of confidence  ;D

 

Definitely smart move. Surprised it's not more. Why not $5B? $2B doesn't seem like much in comparison to market cap or spend

Link to comment
Share on other sites

I see 2 possible reasons, the fact that they did not find anyone willing to put up $5b and/or the fact that Elon does not want the float to increase by too many shares.

 

The 10K is out and it appears that Tesla's general counsel left (on December 6) just 2 days after the SEC issued a subpoena on a new investigation into TSLA's financials (on December 4). Does not sound like coincidence.

 

The investigation also started 12 days after Einhorn asked Elon questions on the accounts receivable balance and the 10K now includes an explanation linked to the fact that "Accounts receivable primarily include amounts related to receivables from financial institutions and leasing companies offering various financing products to our customers".

 

Channel stuffing anyone?

Link to comment
Share on other sites

The dude owns what % of the company? What amount would've made a difference?

 

I would have expected him to contribute approximately $69.420.420.

 

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?

Link to comment
Share on other sites

The dude owns what % of the company? What amount would've made a difference?

 

I would have expected him to contribute approximately $69.420.420.

 

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?

 

Sure. That's how finance works.

Link to comment
Share on other sites

I see 2 possible reasons, the fact that they did not find anyone willing to put up $5b and/or the fact that Elon does not want the float to increase by too many shares.

 

The 10K is out and it appears that Tesla's general counsel left (on December 6) just 2 days after the SEC issued a subpoena on a new investigation into TSLA's financials (on December 4). Does not sound like coincidence.

 

The investigation also started 12 days after Einhorn asked Elon questions on the accounts receivable balance and the 10K now includes an explanation linked to the fact that "Accounts receivable primarily include amounts related to receivables from financial institutions and leasing companies offering various financing products to our customers".

 

Channel stuffing anyone?

 

Maybe. I mean, I get being tactical. I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

 

Like why even do it all if you're only going to raise $2B?

Link to comment
Share on other sites

The dude owns what % of the company? What amount would've made a difference?

 

I would have expected him to contribute approximately $69.420.420.

 

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?

 

Strong work from our twitter wannabe detectives here. Seemed to have moved on from musks’s margin calls, demand cliffs, car fires, elon’s tweets, unintended acceleration to...elon and larry should have put up more cash. Thesis creep is a wondrous thing. So is the capacity for dogmatic behavior. Keep on pounding it in.

 

Wonder what would happen if any other business had this level of scrutiny. The Buffett quote about “if a cop follows you on the highway for 500 mi you will surely get a ticket” rings true. Fortunately these are no cops, but just sad TSLAQ people who waste away their life on attacking this co and ceo with not just opportunity costs but real $$$ costs to show for it!

Link to comment
Share on other sites

This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

 

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

 

I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

 

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

 

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

Link to comment
Share on other sites

If $2B derisks the future for a $150B EV company, why not just do an ATM? Or better yet, one of those absurd 10-15y convertible offerings that carries a 0.5% interest rate?

 

I meant it as in it "lowers risk", not "fully eliminates risk".

 

And I'm not saying they're running the cap table the way I would do it, obviously they've always been very aggressive and always cut it close. But things are certainly less risky with $2bn extra on the balance sheet than without it.

 

And a lot of what they're spending is within their control -- they didn't have to go at that speed, they could've milked the Model S for a few more years before even embarking on the 3, and they could've elongated the 3 ramp up by a few years, and waited some more for the Y and to design the Semi and build other factories and so on... But clearly speed is a very high priority for them, and so far it has benefits too -- hard to find an EV that's even as good as the 2012 Model S, so their pace is hard to keep up for others.

Link to comment
Share on other sites

This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

 

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

 

I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

 

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

 

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

 

Then you don't answer the question directly or say it will be dictated by market availability and company needs or come up with some other BS non answer like every other corporate executive does. You don't make an outright lie.

 

Musk has massive credibility issues and this is just another check mark against him. How anyone can trust this guy is beyond me.

 

1) Taking private/funding secured. Lies

2) Bought SolarCity for the "synergies" and not for the conflicts of interest. Lies.

3) "Everything is fine, and liquidity concerns are overblown" while self-admittedly being days away from running out cash? Lies.

4) Raising capital right after you said you wouldn't raise capital? Lies

 

Probably another half dozen things that could be added to the list that weren't outright lies but incredibly disingenuous and misleading statements/actions.

 

He's a brilliant dude, but totally and consistently untrustworthy. How the board or the shareholders is ok with him leading the company is beyond me - but I guess they're all just blinded by the money his lies have produced for the...

 

Is lying only wrong if it loses a company money?

Link to comment
Share on other sites

This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

 

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

 

I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

 

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

 

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

 

Then you don't answer the question directly or say it will be dictated by market availability and company needs or come up with some other BS non answer like every other corporate executive does. You don't make an outright lie.

 

Or he changed his mind since then because the facts changed? It's very possible he had no plans for it at the time, but since then the stock went up like a zillion percents and China and part of the rest of the world shut down and who knows when that'll end, maybe the risk/reward of raising capital changed a bit.

Link to comment
Share on other sites

This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

 

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

 

I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

 

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

 

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

 

Then you don't answer the question directly or say it will be dictated by market availability and company needs or come up with some other BS non answer like every other corporate executive does. You don't make an outright lie.

 

Or he changed his mind since then because the facts changed? It's very possible he had no plans for it at the time, but since then the stock went up like a zillion percents and China and part of the rest of the world shut down and who knows when that'll end, maybe the risk/reward of raising capital changed a bit.

 

Possibly.

 

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.

 

It was 10 business days between when he announced he wouldn't be selling stock and when the stock was offered.

 

If we're being realistic, they were probably getting all of the paperwork for the follow-on offering together while he was actively saying they weren't. That's certainly more in tune with his prior actions and character than telling the truth and changing his mind is ...

Link to comment
Share on other sites

 

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.

 

 

Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings.  I've not done follow on equity offerings, but having done it on the credit side it's really fast. 

Link to comment
Share on other sites

 

Is lying only wrong if it loses a company money?

 

We live in a society that praises lying (Trump, Musk) and doing whatever it takes to win.  Truth is dead...

 

There are many on here who would rather win (stock appreciation) no matter the cost than have principles.  And in a society that exalts money above all else the incentives sort of speak for themselves.

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now



×
×
  • Create New...