Tesla (TSLA) hits all-time high in afterhours trading on blowout 2020 guidance

Tiger Uppercut!

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Tesla has reported revenues of $7.38 billion and adjusted earnings per share of $2.14/share. The company also stated that they will exceed 500,000 units delivered in 2020 as a result of the Chinese ramp of Model 3 and the Model Y ramp in Fremont, California. 

Some other highlights from the TSLA Q4 2019 earnings release:

  • Tesla cash on hand grew by $930 million to $6.3 billion
  • Tesla had free cash flow (operating cash flow less capital expenditures) of $1.0 billion in Q4 2019
  • $359 million in GAAP operating income; 4.9% operating margin in Q4 2019
  • $105 million in GAAP net income in Q4 2019
  • Model Y production ramp started in January 2020, ahead of schedule
  • Increased Model Y AWD EPA range to 315 miles from 280 miles
  • Record vehicle deliveries of 112,095 vehicles in Q4 2019
  • Record Q4 storage deployment of 530 MWh.
  • Tesla returned to profitability in the second half of 2019
  • Tesla generated $1.1 billion of free cash flow in 2019

Our pace of execution has also improved significantly, as we have incorporated many learnings from our experience launching Model 3 in the United States. As a result, we were able to start Model 3 production in Gigafactory Shanghai in less than 10 months from breaking ground and have already begun the production ramp for Model Y in Fremont.

None of this would be possible without strong demand for our products. For most of 2019, nearly all orders came from new buyers that did not hold a prior reservation, demonstrating significant reach beyond those who showed early interest. Amazingly, this was accomplished without any spend on advertising. As more people drive our cars and as the industry rapidly validates electrification, interest in our products will continue to grow.

Higher volumes driven by Model Y and Gigafactory Shanghai, continued improvements in operating leverage, and further cost efficiencies should allow Tesla to ultimately reach an industry-leading operating margin.


Automotive revenues of $6.368 billion in Q4 2019 were up slightly from the $6.323 billion in Q4 2018. GAAP Net income ws down from 2018 in the quarter. 

Financial results for Tesla in Q4 2019.
Financial results for Tesla in Q4 2019.

In 2019, our revenue growth was positively impacted by a strong increase in vehicle deliveries. Revenue growth was offset by higher lease mix*, Model 3 becoming a larger part of our mix, introduction of the Standard Range trims of Model 3, and adjustments to vehicle pricing. These changes have resulted in a reduction to the average selling price (ASP) relative to 2018. We do not expect ASP to change significantly in the near term, which means volume growth and revenue growth should correlate more closely this year.

We are positioned to accelerate our revenue growth further through increasing build rates in Gigafactory Shanghai and our Model Y production line in Fremont. These production increases will allow for higher total vehicle deliveries and associated revenue. GAAP gross profit of $4.1B remained essentially flat in 2019 compared to 2018. Volume growth and successful cost reduction efforts were offset by normalization of ASP, mix shift towards Model 3 and a higher lease mix.

Sequentially, GAAP gross margin remained relatively flat in Q4 compared to Q3, while we ramped Model 3 production at Gigafactory Shanghai. While we saw an increase in operating expenses in Q4 (driven mostly by $72M of non-cash SBC expense related to one more 2018 CEO award operational milestone becoming probable), higher gross profit resulted in a 72bp sequential improvement of GAAP operating margin to 4.9% in Q4.

Quarter-end cash and cash equivalents increased by $930M QoQ to $6.3B, driven by positive quarterly free cash flow of $1.0B. Capital expenditures increased sequentially due to investments in Gigafactory Shanghai and Model Y preparations in Fremont.


It seems like lease accounting will definitely have an effect on revenue recognition going forward, which the company stated lead to the weaker revenue growth in Q4 from the previous year. Here's a breakdown of the unit sales and leased vehicles:

Unit sales for the Tesla Model S, X, and 3.
Unit sales for the Tesla Model S, X, and 3.

Tesla's guidance and unit sales outlook were definitely the highlight of this quarter. The company expects vehicle deliveries to top 500,000 in the full year of 2020. The company also expects to be cash flow positive each quarter going forward. They did note that there could be some quarters around the ramp of a new product that this might not be the case. "We continue to believe our business has grown to the point of being self-funding." read the 2020 outlook.

A few production updates to note are that production of the Model Y has already begun to ramp at Fremont ahead of schedule. This is a term Tesla purchasers might not be used to hearing, but yeah, the Model Y is coming out earlier than expected and with better range than initially thought. Nice UPOD, Elon and Co. GG. Tesla also said that they plan to produce limited volumes of Tesla Semi in 2020. T

This is a banger of a quarter, and I will be back to provide coverage of the Tesla Q4 2019 earnings results conference call when it starts at 6:30 PM ET.


Tesla (TSLA) Q4 2019 Earnings Release Conference Call

Here are the highlights from the conference call:

  • Stock price starts the call at $649.89/share at 6:32 PM ET.
  • Elon, Zach, and the funky bunch are on the line.
  • Q4 results were announced at 4:00 PM ET today.
  • Elon opening remarks
  • "Q4 was another strong quarter."
  • $20 billion of revenue with zero advertising spend.
  • Speaks to the nature of the product.
  • Fremont factory back to Numi's record from back in the day. Expected to exceed that output from the plant.
  • Congratulations to Shanghai
  • Excited and optimistic about the Shanghai factory.
  • Broke ground on the Model Y factory in China
  • Started production of Model Y thanks to great effort of team
  • Cybertruck reveal, "that went very well."
  • Trying to build a better product in every way.
  • The goal was to kick the ass out of every pickup truck.
  • Demand has been incredible.
  • Never seen anything like it, basically.
  • We will sell as many as we can make.
  • The product is better than they realize.
  • They underestimate the awesomeness of it.
  • It's just great.
  • FCF of $1 billion while doing the Model Y ramp and Shanghai going online
  • Testament to the incredible performance of the Tesla team.
  • Thanks the Tesla teams for helping to grow the company.
  • Model Y, Giga Building, Tesla Semi, Solar, Battery, FSD, Next Gen Roadster, and more products
  • Touts companies roadmap
  • You look back 10 years from today
  • We will produce 1000 more cars per day than we did in 2010.
  • So, where will we be in 10 years? It is a very exciting prospect.
  • Zach jumps on the mic.
  • Model 3 demand is transitioned from preorders to new demand
  • New production capacity coming online faster and cheaper thanks to things they learned in Model 3 ramp
  • Higher volumes, improved capex, working capital management, lead to postive gaap net income in Q3 and Q4 2019
  • Stock Based Compensation was up due to Elon's stock grant, because he is killing it.
  • Forecasting the best performance in company history.
  • One and one and a half week slowdown at China factory due to Coronavirus.
  • Stock is at $648/share 6:44 PM ET
  • Q&A begins
  • investor question about California demand due to new home construction laws
  • Elon: "demand is very strong," admits to coming off of a low base.
  • Seeing a lot of interest
  • It's the future we want, but because it is a new and quite revolutionary product, there are a lot of challenges to overcome
  • the Buffalo factory is doing great
  • Bad question about car sharing
  • Elon: Car sharing can be done before FSD
  • Something we can do.
  • Superchargers at airports?
  • Ridesharing while using Tesla Insurance
  • How many customers are using Tesla Insurance?
  • When will you use data learned from Tesla Insurance to lower the cost?
  • Zach: Expand it to other locations
  • talking to regulators in other places
  • working on processes to adjust rates
  • working with regulators
  • significant amount of innovation, and this will be rolled in over time
  • Elon: Insurance is going to be quite a major product for Tesla in the future
  • Poor feedback mechanism between insurance rates and how the car is being driven
  • we can see that in real-time
  • FSD retrofitting queston
  • Elon: I said we were hoping to be feature-complete by the end of the year
  • Feature complete means it has some chance of getting somewhere with no intervention.
  • FSD autonomy core autopilot software team is making progress
  • The apparent progress as seen by consumers will be seen as very rapid, but we are focused on a very strong foundation. 
  • Moving to video training
  • all eight cameras simultaneously
  • it is a huge leap in labeling efficiency
  • we are making great progress on that
  • Most retail investors seem to understand Tesla better than analysts, do you even have to answer questions from analysts?
  • Elon: A lot of retail investors have deeper insights than wall street analysts
  • Some remarkable insight from retail investors like me, Asif Khan.
  • Gross Margin and Operating Expense question
  • Stock at $648.75/share at 6:55 PM
  • Touts the capabilites of the Shanghai plant.
  • Significant reduction of cost of Model 3 in Shanghai compared to Fremont
  • Similar margins in both factories
  • Chinese customers buying the more affordable Model 3, leading to similar margins
  • Elon comments on efficiency of building cars where you sell them instead of putting them on boats in California
  • Stock at $647.40 at 6:58 PM ET.
  • Capital Raise Question
  • Elon: "We're actually spending money as quickly as we can spend it. No artificial holdback on expenditures."
  • We are not artificially limiting our expenses
  • Zach: Some of our learnings during the Model 3 launch period was that we great too quickly and too in a complicated manner
  • Reduction in costs in recent year due to efficiencies seen in those mistakes.
  • Stock back at $649.50/share at 7:00 PM ET.
  • Can we please talk about cost control? Growth vs Gross Profit Growth?
  • Zach: We have learned a lot about cost efficiency. Operating expenses will start to tick up.
  • Battery question
  • Elon talks about battery efficiency.
  • Rapidly approaching a 400 mile range on a Model S.
  • Model S and X have more range than we are currently stating
  • lol
  • They just haven't got around to the EPA rerating
  • It has been that way for awhile
  • lol
  • Q&A from Wall Street Jaboofers begin
  • Adam Jonas MS
  • Excellent retail questions
  • "potential for Tesla cars and Starlink terminals?"
  • Elon: It certainly could happen in coming years. 
  • Starlink is really for homes and aircraft. The attenna is about the size of a medium pizza.
  • It would work
  • Adam Jonas: How would compatibility with a Starlink help the Tesla vehicles?
  • This is a bad question from a Wall Street Jaboofer
  • Elon: I don't think about it very much to be honest.
  • Dan from Wolf of Wall Street 
  • Capex guidance question
  • long term guidance for capex?
  • Elon: I don't think we want to tell you what our capex will be this year
  • It is not artificially limited
  • we will spend a lot of money this year
  • The challenge comes in decided which way to spend the money
  • Elon: There are efficiencies in the company that would not be apparent to customers, but apparent in our financial results
  • Dan from Wolf: followup on building demand and capacity
  • Zach: Our internal plans are for faster growth. The Shanghai facility has a loan facility.
  • Growth in China will help fund growth elsewhere
  • Elon: 50% growth
  • Gene "the Hammer" Munster: Congratulates Tesla on quarter. How many of these Cybertrucks can you make?
  • Elon: Demand is far more than we can reasonably make in the space of 3 or 4 years
  • Man that rules
  • We are focused on increasing our battery production capacity
  • We need more batteries to produce more vehicles
  • That is part of why we have not accelerated production of the Tesla Semi.
  • Steep ramp in battery production
  • very fundamental 
  • extremely difficult
  • Battery Day probably in April 2020
  • Go through what the challenges are
  • How do you get from here to a couple thousand GW/year
  • Gene: High Density Passenger Vehicle?
  • Elon: Minivan? We have to scale battery production to crazy levels that people cannot fathom today.
  • Wall Street Jaboofer: Difference between Model 3 and Model Y? Followup Will Model 3 sales grow from the release of Model Y?
  • Elon: Model X increased Model S sales
  • They both increased
  • We are not worried about demand. We are worried about production.
  • Elon: We have to go as fast as we can with the Model Y. 
  • Stock at $649/share at 7:17 PM ET.
  • Model 3 and Model Y expand as all three factories go live in Shanghai, Berlin, and Fremont.
  • Colin Rush, Oppenheimer: Pricing Strategy question? Is there a per product target for profit margins?
  • Elon: focused on positive cash flow
  • Zach: agrees on growth while staying profitable
  • Elon: High margin comes from autonomy.
  • Autonomy sales not as good in China
  • As we fix that, we will see more people buying it
  • As we get closer to FSD, the margins will grow
  • Powertrain followup from Colin from Wall Street Inc.
  • Elon: Our powertrain is pretty damn good
  • Touts Tesla powertrain versus Taycan with similar battery pack
  • Colin: How do you lower the cost of the powertrain
  • Elon: Tesla is all about hardcore engineering, - he sounds baked
  • ASP question about flat guidance in pricing for 2020
  • Elon: we will adjust according to demand
  • Zach: relative to the current Model 3, China Model 3 ASPs are lower
  • Capital raise question again
  • Why not pay down debt or make acquisitions?
  • Elon: who should we acquire?
  • lmao
  • Autonomy companies?
  • Elon: We are not aware of anyone we would want to acquire
  • Debt?
  • Elon: Diluting the company to pay down debt does not make sense right now
  • Zach: we are not constrained
  • Elon: We will keep steadily paying down our debt
  • Elon sounds pissed by this question
  • Pierre from New Wall Street Research
  • 800,000 in unit capacity for cars by the end of the year? 
  • Where do you stand now in battery capacity?
  • Question about what they are doing better than their competitors in battery?
  • Elon: A lot of people made fun of us, but it turns out the pros are struggling with it.
  • We have shown massive growth at the gigafactory in Nevada
  • We've gotten pretty good with that
  • Panasonic relationship has been excellent
  • We've added LG and other partners at smaller scale
  • We will talk about this on Battery Day
  • We are super deep in cell
  • lol
  • Battery Production, 7 days a week
  • Man, do we know a lot about batteries
  • We do have a decade plus of cell and battery production and engineering experience at Tesla
  • "We know a lot about batteries" - Elon is stoned, or just can't take these questions
  • LAST QUESTION JOSEPH OSCEA JMP SECURITIES
  • Cell technology question
  • Maxwell tech question 
  • Capacitor Dry Cell
  • Elon: We will talk about this on Battery Day
  • Battery Day will be lit
  • Elon: It blows my mind and I know it
  • Ultracap technology and important piece of the puzzle
  • The call mercifully ends at 7:30 PM ET. Tesla stock is at $648.25/share. 
  • Tesla's stock rose nearly $70 on the release of their earnings report, and Elon and Zach managed to not talk the stock down.
  • Goodnight Cleveland.

That's all for now, but check out our 9to5 Elon podcast if you are into Tesla content.

CEO

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
    • reply
      January 29, 2020 1:39 PM

      $$$

    • reply
      January 29, 2020 1:41 PM

      :O

    • reply
      January 29, 2020 1:41 PM

      my tsla options are doing insane right now on investopedia stock simulator

    • reply
      January 29, 2020 1:41 PM

      holy fuck.

    • reply
      January 29, 2020 1:49 PM

      So basically, when I'm able to project my consciousness back into the past, I'll ensure that I dump all my money into Apple stock until Tesla appears, then switch it all to Tesla.

      Got it.

      • reply
        January 29, 2020 1:57 PM

        It was like when I was way too lazy to move out of my money out of my corporate stock in my 401K. It was $96 when I started and just hit the mid 430s. Laziness paid off for once.

      • reply
        January 30, 2020 3:12 AM

        Nah, buy Bitcoin in 2009 when it was like $1 per and cash out at $10,000. Turn $1000 into $10 million

    • reply
      January 29, 2020 1:58 PM

      I keep seeing articles implying they are making a huge loss, is that true?

      • reply
        January 29, 2020 2:06 PM

        just reported net income of ~$100M on ~$6.5B in revenue a little bit ago so not exactly bleeding. definitely not the "bad" situation they were in a couple years ago

        • reply
          January 29, 2020 2:07 PM

          ^ for the quarter, if that wasn't clear

        • reply
          January 29, 2020 2:12 PM

          That's the part that makes it hard to justify it's high stock price IMO.
          It's income seems to always be on the threshold no matter how many cars it can sell in a quarter.

    • reply
      January 29, 2020 2:07 PM

      Was *this* close to ordering an M3, but the 8-10 week wait time (car needed in two weeks) just wasn't in the cards. Next one will be a Tesla!

      • reply
        January 29, 2020 2:13 PM

        You should just rent a car for those weeks IMO.
        Definitely worth the wait.

    • reply
      January 29, 2020 2:21 PM

      $TSLA up and $FB down. Truly a great day for humanity.

    • reply
      January 29, 2020 2:33 PM

      There must be a round of dilution coming? If they issued enough share to knock $100 of the share price, they could retire a bunch of imminent debt, have plenty of working capital, and still leave shareholders with great returns.

      • reply
        January 29, 2020 2:49 PM

        I mean, they don't seem to need capital, but I guarantee it is a question asked on the conference call by an analyst.

      • reply
        January 29, 2020 3:06 PM

        "We continue to believe our business has grown to the point of being self-funding." read the 2020 outlook.

        • reply
          January 29, 2020 3:31 PM

          As long as they have enough to get the Cybertruck into production at a decent clip, I'm happy!

          (Now i just need to save up for a few years to be able to buy one...)

          • reply
            January 29, 2020 4:48 PM

            From the conference call:

            Gene "the Hammer" Munster: Congratulates Tesla on quarter. How many of these Cybertrucks can you make?
            Elon: Demand is far more than we can reasonably make in the space of 3 or 4 years
            Man that rules
            We are focused on increasing our battery production capacity
            We need more batteries to produce more vehicles
            That is part of why we have not accelerated production of the Tesla Semi.
            Steep ramp in battery production
            very fundamental
            extremely difficult
            Battery Day probably in April 2020
            Go through what the challenges are
            How do you get from here to a couple thousand GW/year
            Gene: High Density Passenger Vehicle?
            Elon: Minivan? We have to scale battery production to crazy levels that people cannot fathom today.

    • reply
      January 29, 2020 2:45 PM

      Spiked again. At ~$650 now. Up $70 in AH trading. lol

    • reply
      January 29, 2020 2:48 PM

      I will be updating the article during the conference call. I have also added a bunch of information from the TSLA Q4 earnings release: https://ir.tesla.com/static-files/b3cf7f5e-546a-4a65-9888-c928b914b529

    • reply
      January 29, 2020 3:10 PM

      Fuckkkk I keep dragging my feet waiting for a dip to buy in...

    • reply
      January 29, 2020 3:10 PM

      With tax credits expiring will be interesting to see how 1Q deliveries are. They have been already trending down in the US.

      • reply
        January 29, 2020 3:13 PM

        The tax credits were damn near nothing this last quarter. $133 million of $6.368 billion in revenues. They will be fine. The better question is what happens to demand when the Green New Deal passes.

        • reply
          January 29, 2020 4:08 PM

          1800 credit as an incentive to buy was more my point. It's certainly significant. Expecting a green new deal to pass is pretty optimistic.

    • reply
      January 29, 2020 3:30 PM

      Conference Call about to start. Will be updating the article in real-time.

    • reply
      January 29, 2020 4:35 PM

      interesting watching the stock go down after your name was mentioned
      Stock is at $648/share 6:44 PM ET
      (Some remarkable insight from retail investors like me, Asif Khan.)
      Stock at $648.75/share at 6:55 PM
      Stock at $647.40 at 6:58 PM ET.

    • reply
      January 29, 2020 4:43 PM

      At this rate Tesla is going to buy me a Tesla.

    • reply
      January 29, 2020 5:45 PM

      Ford and GM have ~$300b revenue. Tesla has 6.5b. Does the stock price imply that TSLA is going to have >$300b revenue in the next, oh, 5 years? Or be providing dividends equivalent to Ford/GM? Does the price imply that no other company will compete with TSLA in electric or self-driving cars in the next decade? What justifies the valuation?

      • reply
        January 29, 2020 5:50 PM

        For one nobody else is stepping up. And they’ve had years to do so. When (if?) that changes then things might stall or turn around a bit when it comes to $TSLA.

        • reply
          January 29, 2020 6:03 PM

          what does this even mean, do you think there are no other electric cars on the market? you think nissan can't make a luxury car if they wanted? that other carmakers can't make an electric car if the market forces made it a $500b market?
          https://www.edmunds.com/electric-car/articles/best-electric-cars/

          • reply
            January 29, 2020 6:09 PM

            I'm sure they can make the car, but the software behind it would be a dumpster fire. I have no faith that any of the big car manufacturers will have the ability to start producing quality software anytime soon.

            • reply
              January 29, 2020 6:21 PM

              software? they’re not a sole leader in self driving cars, not even the leader in autonomy.

              Also, I will never, ever trust a company that essentially lets users beta test their brakes and then pushes out a patch over the internet:
              https://arstechnica.com/cars/2018/05/how-a-software-brake-upgrade-won-tesla-a-consumer-reports-endorsement/

              even if it’s a fix it’s a horrifying situation. if my car’s brakes are buggy the consequences are life and death, very different than say a bethesda game release.

              • reply
                January 29, 2020 6:24 PM

                I'm not talking about the autonomy stuff, I'm talking about all the other stuff that users actually interact with on a consistent basis. Tesla is the only manufacturer out there who operates like a tech company, with time and energy spent on things like usability studies.

                We just bought a 2020 RX350 and the dashboard is hot garbage and only very minor upgrade over the dashboard software in my 2015 ES350. Car companies just don't give a shit about stuff like that, they aren't tech focused and it shows.

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                  January 29, 2020 6:28 PM

                  so TSLA should be valued at an estimated 2020 p/e of like 180 because they replaced the dash with a tablet? that is insanity

                  honest question, if you’re driving and the screen breaks because some kid hits it with something what’s the backup

                  • reply
                    January 29, 2020 6:32 PM

                    It's not about the tablet, it's about how they approach software and technology in general.

                    • reply
                      January 29, 2020 6:36 PM

                      so one read of that is that tsla is gonna monetize its user base by selling the privacy of its drivers, just like the rest of SV

                      i can see that

                      sell your gps info
                      listen to you via the tablet, sell that
                      weigh you daily, sell that
                      sell ads on the tablet dash
                      sell ads on the speakers

                      • reply
                        January 29, 2020 6:38 PM

                        Didn't GM sell those things with the onstar system?

                      • reply
                        January 29, 2020 6:38 PM

                        Tesla doesn't need to sell user data to make money, there's a huge demand for EV's that are designed by people who understand technology.

                        When is the last time you saw people wait months for a pre-order to be fulfilled by one of the old timey car makers? There's a reason people like Tesla, they are the only car maker on the market designing cars for the 21st century.

                        • reply
                          January 29, 2020 6:46 PM

                          when’s the last time a big time auto maker released a new major model car in a small batch run? they have the production lines to mass produce. it’s a bad comp. you think that if Ford announced they were only making 10,000 mustangs in 2020 there wouldn’t be a waiting list?

                          • reply
                            January 29, 2020 6:47 PM

                            The Model 3 isn't a small batch run, and I think if Ford announced a pre-order for their next model Mustang people would laugh because no one wants that shit.

                          • reply
                            January 29, 2020 6:50 PM

                            Ford has to do a small batch run for the mustang because they have no batteries. I doubt they have enough batteries to fulfill the preorders they have already received.

                            Mercedes Benz cancelled the release of the EQC in the US because of this exact reason. The vertical integration of Tesla has proven itself to be correct. The OEM route will struggle unless major changes occur in the next 5 years.

                  • reply
                    January 29, 2020 6:47 PM

                    They have a 10 year head start on a technological revolution that no other car company wants to happen.

                    Show me a CEO that is willing to take a 50% stock price hit to invest in R&D to really compete with Tesla. They want to milk ICE for as long as they can and FUD BEV tech for as long as anyone is dumb enough to listen.

                    They are all dead. The EU will tighten down regulations to the point where, eventually ICE will be illegal. BMW is on record stating they only build BEV vehicles because they are forced to. China will do the same to try and salvage their shit air quality. The US will drag it’s feet because we are stupid.

                  • reply
                    January 29, 2020 6:57 PM

                    It's not a bet on Tesla, it's a backing of Elon Musk.

            • reply
              January 29, 2020 6:42 PM

              Why wouldn't you trust any of the big companies to handle the regulatory hurdles they face?

              • reply
                January 29, 2020 6:44 PM

                The other companies don't face hurdles that Tesla doesn't also face, I'm just skeptical that they can change their company culture enough to take on Tesla on the technology/software/usability front. Tesla is first and foremost a technology company, and it shows.

          • reply
            January 29, 2020 6:11 PM

            The constraint right now on all EVs is battery supply. Tesla has a mammoth lead thanks to the partnership with Panasonic. Other EV makers didn’t integrate batteries into their supply chains as successfully. They also have fund ICE production...

            • reply
              January 29, 2020 6:23 PM

              this is a fair answer but doesn’t sound like anything insurmountable. other car makers are, well, familiar with managing supply chains.

              • reply
                January 29, 2020 6:30 PM

                But they are debt laden, own plants that aren’t built for EVs and they are beholden to the oil industry. This is like CDs vs MP3s. These car companies will he left in the dust. Tech companies might end up acquiring them. This is a secular shift in the technology powering vehicles. Tesla has a first mover advantage of epic proportions.

                • reply
                  January 29, 2020 6:41 PM

                  CDs are physical products, MP3s are not. cars are cars.

                  now, debt or outdated distributor networks, or tooling that is useless for EVs and will be scrapped, ok. some bad sunk costs. so they have some good pure business advantages if you assume the future is all lithium ion battery.

                  I just don’t buy any of the tech, software or design arguments to justify the valuation. tesla is not magical.

                  spacex’s sticking the landing was a much more impressive engineering achievement

                  • reply
                    January 29, 2020 6:49 PM

                    Gigafactory. How many does GM have? Ford? Toyota? That is the real first mover advantage. Software? Do you realize how much driving data they have collected? Only Waymo compares, and maybe Apple. Other companies are definitely working on autonomy. But the big players are in tech. Be it MSFT INTC AAPL GOOGL TSLA NVDA, that is where the play is in AI, Machine Learning, Computer Vision, and all that other fun stuff required to get anything near FSD.

                  • reply
                    January 29, 2020 7:10 PM

                    Yeah I don't get it. A century of auto manufacturing has shown us that advantages are fleeting and the competition inevitably catches up. Otherwise we would all still be driving around Model Ts.

                    I don't doubt Tesla is going to last and grow, but it's not going to be the only major EV player long term, and it's not going to extract tech company style profits.

                    • reply
                      January 29, 2020 9:56 PM

                      Advantages are fleeting, but why did my 1990 Integra get better gas mileage than any car after? Because big oil. Tesla is disrupting the fossil fuel industry not just automakers. The wheel of progress that they have put in renewable motion is going to crush them. All the competition is at minimum 5 years behind.

          • reply
            January 29, 2020 6:12 PM

            Software? Battery production??? Just pumping out joe blow EV isn’t what’s important here.

          • reply
            January 29, 2020 6:37 PM

            1. Tesla has a massive supercharger network.
            2. Tesla gets more range per kWh hour than other cars (given the weight of the vehicle) https://www.reddit.com/r/teslamotors/comments/cevc99/ev_core_efficiency_comparison_chart/
            3. Tesla has the ability to update the car over the air and improve it over time (nobody else can do this to the extent Tesla can)
            4. Tesla has a superior battery design and cooling approach, allowing higher charging speeds (250kw on the model 3) and a more space efficient design (pouch batteries are expensive and do not scale as well as the 2170 design)
            5. Tesla’s cars have some of the highest safety ratings of any cars ever produced.
            6. Tesla bought Maxwell tech. The rumor is a million mile battery may soon be unveiled.
            7. Tesla is the only car company outside of China to OWN their factory INSIDE China.
            8. Tesla is using technology from spacex, utilizing the pipeline of innovation we have seen in the past where nasa hands out tech to create new industries, but now it is all in house. (Cybertruck used the stainless steel used in starship for instance).
            9. No EV produced by a company outside of Tesla so far has managed to eclipse the overall efficiency of the 2012 Model S.
            10. The number of real world driving collected by the Tesla fleet has provided a totally insurmountable lead when it comes to building a training data set for full self driving AI.
            11. All model 3’s on lease will be returned to Tesla to provide the foundation of their full self driving robo taxi service. (You cannot purchase a model 3 lease)

            The only car company that seems to be trying to compete is Volvo. They are partnered with LG chem, which means they will be massively battery constrained, as will Ford with their “mustang”. Rivian has priced themselves out of the market so far. Their entry level truck is almost as expensive as a tri-motor cybertruck, but with nearly half the range.

      • reply
        January 29, 2020 6:08 PM

        also sorry, yes, 6.5b for quarter not year

    • reply
      January 29, 2020 6:22 PM

      Anyone getting a Y? http://i.chattypics.com/files/modely_uoi1ca6mi3.png

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        January 29, 2020 6:41 PM

        I was. The plan was my wife would have the X, I would have the Y (fitting). We got the X, then I saw the cybertruck and lost my damn mind. I think about it every day.

      • reply
        January 29, 2020 6:42 PM

        I was, until the Cybertruck was announced. Sucks that I have to wait until 2022 though.

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        January 29, 2020 6:48 PM

        I'd like to get one but if we did my wife would drive it mostly. We'll see

      • reply
        January 29, 2020 6:49 PM

        I kinda want one.

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        January 29, 2020 6:56 PM

        I’m super close to pulling the trigger on a blue one to replace my wife’s MDX. Every time we drive her car it feels ancient, and we use it a lot less now that we got a Model 3 in 2018. I’m just not really looking forward to taking a hit on the trade in. Her MDX is only a 2017.

        • reply
          January 29, 2020 7:57 PM

          Make sure you pay your credit card debt off first or Shacknews.com Chatty users will be upset.

          • reply
            January 29, 2020 8:04 PM

            I don’t carry a balance at all on any credit cards and don’t have any student loan debt. The only consumer debt I have is my cars and solar on the house. I could do better, but I’m not in a bad spot at all.

      • reply
        January 29, 2020 7:56 PM

        Hope to pick one up in a few years yeah. I expect it to look better in person, just like the 3.

      • reply
        January 29, 2020 8:08 PM

        I want to replace my wife's Sorento with one, but I’ll wait a year to let them sort out the bugs.

      • reply
        January 29, 2020 10:05 PM

        my 2nd telsa will be a Y in a few years

      • reply
        January 29, 2020 10:28 PM

        No induction wheels???

      • reply
        January 29, 2020 10:32 PM

        Can't even afford a 3... The cheapest model in Australia is $75k with no add ons.

        • reply
          January 30, 2020 1:18 AM

          We're lucky electric pedal-assist push bikes are less than $20k.

          • reply
            January 30, 2020 1:23 AM

            I feel like this is our version of "back in my day"...

            Instead of "back in my day, we had to walk 40km through the perilous desert to go a poop in a pot"...
            We have "back in my day, our electric assist pedal bikes cost more than what the rest of the world pid for a luxury electric car... And the assist barely even worked when you peddled"


            ".....and it stabbed you in the balls everytime you stroked... And we were thankful for it!"

    • reply
      January 29, 2020 7:02 PM

      Is Tesla still the only big automaker without its workers being in a union? A quick google search says yes.

      It's very 2020 for the stock to go huge and every tech bro to slurp it up when it's workers are more in peril than any other auto worker.

      • reply
        January 29, 2020 7:07 PM

        I am in investing to make money. I can then take my money and donate it to causes that I care about. That is how I attempt to balance the ethical dilemma of investing in any giant corporation.

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          January 29, 2020 7:11 PM

          me too, except the cause is the "Dan Early Retirement" fund that I donate to.

          • reply
            January 29, 2020 7:14 PM

            Well, I find early retirement to be boring. So I bought a website. And I keep trying to grow my portfolio.

            • reply
              January 29, 2020 7:55 PM

              My idea of early retirement is being financial set so I can work at interesting startups and not be financial dependent on them succeeding. Or doing the 3 month contract and 3 months off thing where I travel or work on my own projects, etc.

            • reply
              January 29, 2020 10:08 PM

              [deleted]

              • reply
                January 29, 2020 10:12 PM

                It is not gambling as much as it is taking calculated risks when you study companies and keep up with their financial performance.

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                  January 29, 2020 11:44 PM

                  That’s still gambling though. You can do all the best research but sometimes get completely screwed because the market isn’t in any way rational.

                  Take roulette for example. There are different levels of risk but all are still gambles with different levels of payouts and sometimes you win sometimes you don’t.

                  Tesla right now is riding high but tomorrow some weird ass Elon scandal could come out or something dumb Trump does or even something completely irrational investors do that could tank the stock.

                  It’s all a gamble because the company itself could be doing great and doing all the right things but outside forces aren’t rational.

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                January 29, 2020 11:19 PM

                very few active investors beat the market

                if anyone can consistently beat the market, then they can open a fund themselves and retire early because theyll be printing cash

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                  January 30, 2020 1:19 AM

                  Hi. I am that exception to the rule.

                  • reply
                    January 30, 2020 7:10 AM

                    better go make hordes of cash investing other peoples money then because if you can do it consistently you’re basically gonna be done working soon

                    • reply
                      January 30, 2020 7:24 AM

                      Been doing it for 12 years going on 13. I don’t think I want to start a hedge fund... but I have been asked about it.

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                        January 30, 2020 7:32 AM

                        if you can do it consistently then you are absolutely making a mistake not jumping on that

                        beating the market consistently means you will be printing money with the capital of others

                        but of course weve been on a bull run with easy tech wins since the late aughts so who knows

                        but if youre confident in your shit get on it dude wtf money to be made

                        • reply
                          January 30, 2020 7:35 AM

                          There is the stress and anxiety that comes from managing other people’s money. Financial services can burn a person out.

                          • reply
                            January 30, 2020 7:36 AM

                            I don’t think it those things are outweighed by the money I could make.

                          • reply
                            January 30, 2020 7:40 AM

                            I imagine so, but if you’re confident then fuck it. You wouldn’t have to do it for long and then you could go join gameindustryplant on a tropical island or some shit.

                            All jobs have related stressors. May as well make ungodly sums of money while at it!

                            Or don’t. Just seems like a no brainer given what you’re saying.

                            I’m glad you’re motivated to put time into the Shack! So maybe you shouldn’t hahaha

                            • reply
                              January 30, 2020 7:43 AM

                              I really doubt I will ever go back to financial services full-time. It took years off of my life. And yeah, I like my job here at Shack.

                              • reply
                                January 30, 2020 7:55 AM

                                There are so many ways to monetize that knowledge beyond personal application. You wouldn’t necessarily have to even manage assets yourself.

                                If you are as capable as you say, the knowledge can be sold. Get your confidence up, mister.

      • reply
        January 29, 2020 11:12 PM

        yyyyyyyyyep

        vote with your dollars

    • reply
      January 29, 2020 10:17 PM

      Fuck me, should have FOMO'd in last week or whenever it was mentioned here last time

    • reply
      January 30, 2020 12:13 AM

      Great write-up, thanks!

      Also, lol at bulletpoint "Some remarkable insight from retail investors like me, Asif Khan."

    • reply
      January 30, 2020 9:10 AM

      Finally figured out how Shacknews is funded

Hello, Meet Lola