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abasile
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Re: TSLA corporate outlook

Wed Nov 01, 2017 8:42 am

Tesla does have very aggressive goals and Elon Musk is not one to shy away from risk.

The biggest risks for Tesla, in my opinion, would be a stock market collapse and/or an economic downturn. As long as the market is strong and the overall economy is good, I think there will be some patience for Model 3 delays and Tesla will continue to have access to capital.

If the market tanks, I think Tesla will be forced to seek out a large infusion of funds from a cash-rich corporation (recall Tencent's buy of 5% equity in Tesla) or be acquired by another company. TSLA shareholders would suffer, but the brand and the Supercharger network would most likely live on.
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edatoakrun
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Re: TSLA corporate outlook

Wed Nov 01, 2017 11:01 am

Many recent reports indicate TSLA has major production problems at BOTH of it's factories, in Fremont and (east of ) Reno.

Panasonic CEO claims pack production automation at the "gigafactory" will begin "soon".

Panasonic says Gigafactory battery output to increase for Tesla's Model 3

TOKYO (Reuters) - Panasonic Corp on Tuesday said output at the $5 billion battery “Gigafactory” it runs with electric vehicle maker Tesla Inc could soon increase as the causes of bottlenecks that have hobbled production are now understood.

Panasonic, the world’s largest automotive lithium-ion battery manufacturer, makes battery cells to which Tesla adds electronics to make battery packs for its cars.

Tesla earlier this month blamed manufacturing bottlenecks for limiting quarterly production of its mass-market Model 3 sedan to 260 vehicles rather than its 1,500 goal.

Panasonic Chief Executive Kazuhiro Tsuga said at an earnings briefing that delays to the automation of the battery pack production line meant some stages had to be completed manually.

“This process (for battery packs) will be soon automated, and then the number of vehicles to be produced will rise sharply,” Tsuga said. He declined to comment to what extent Model 3 production would be behind its targeted schedule...

https://in.reuters.com/article/panasoni ... NKBN1D00WG

But this series of comments from-the-scene seems to claim the problems with the "giga factory" may be intractable, based on poor location and (ironically) the failure to secure a reliable electricity supply.

...I hate to say it because I’m a local (albeit transplanted from the Midwest) but the Gigafactory location decision was poorly made. Reliable power supplied to the factory likely wasn’t a consideration since the early plans were to be off grid, but there’s little excuse for the other location oversights that are now big issues with the physical location. The factory is too far away from where employees live with the nearest city being 20 miles away. The majority of the labor staff making $14 an hour the math doesn’t work for what it costs them in fuel and vehicle maintenance cost to make that 40 mile round trip daily. They should have also known they were building in an area where people didn’t have tech or production backgrounds...

Not that hard to figure out on your own that Northern Nevada doesn’t have production experienced people living in this part of the country where the local economy is based solely on casinos and tourist.

Not that hard to search Reno media and see how often NV Energy has constant power outages affecting thousands of people.

Not that hard to search Reno media and find how often I80 and ISA Parkway between Reno and Fernley gets closed down due to mainly accidents any given day of the year but also weather and fires depending on the time of year...

https://disqus.com/by/endeep/

TSLA and its corporate successors may find that the decisions made in selecting white elephant factory sites based on cheap government subsidized initial costs a very expensive mistake.
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Nubo
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Re: TSLA corporate outlook

Wed Nov 01, 2017 1:02 pm

abasile wrote:Tesla does have very aggressive goals and Elon Musk is not one to shy away from risk.

The biggest risks for Tesla, in my opinion, would be a stock market collapse and/or an economic downturn. As long as the market is strong and the overall economy is good, I think there will be some patience for Model 3 delays and Tesla will continue to have access to capital.

If the market tanks, I think Tesla will be forced to seek out a large infusion of funds from a cash-rich corporation (recall Tencent's buy of 5% equity in Tesla) or be acquired by another company. TSLA shareholders would suffer, but the brand and the Supercharger network would most likely live on.


Apple. What else you gonna' do with $200 billion in cash? Assuming someone at Apple still wants to change the world.
I noticed you're still working with polymers.

edatoakrun
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Re: TSLA corporate outlook

Wed Nov 01, 2017 1:25 pm

CNBC just reported 5k per week model 3 production rate pushed forward by three months, to end of Q1 2018.

Tesla earnings focus on Model 3 production ramp, demand: Live blog

Loss is worse than expected, $2.92 a share.

http://blogs.marketwatch.com/thetell/20 ... live-blog/

Letter gives no date for 10k per week model 3 production (formerly claimed by end of 2018) and also admits cutbacks in model S/X production of "about 10%" this quarter.

Most importantly, letter claims TSLA has enough cash to continue operations for ~ five months untill it is selling ~5k model 3's per month.

Letter doesn't say what the plan is if it can't build and sell ~5k model 3's per week by then...


...To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged
into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module
design and its automated manufacturing process has taken this line longer to ramp than expected.,,

While we continue to make significant progress each week in fixing Model 3
bottlenecks, the nature of manufacturing challenges during a ramp such as this
makes it difficult to predict exactly how long it will take for all bottlenecks to be
cleared or when new ones will appear. Based on what we know now, we currently
expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1
2018...

...we plan to produce about 10% fewer Model S
and Model X in Q4 compared to Q3 because of the reallocation of some of the manufacturing workforce towards Model 3 production...

Between cash on hand, future cash flows
and available lines of credit, we believe that we are well capitalized to accommodate the revised ramp of Model 3 production to 5,000 per
week.
Upon achieving this production level, we expect to generate significant cash flows from operating activities...

http://files.shareholder.com/downloads/ ... 017-3Q.pdf
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Re: TSLA corporate outlook

Wed Nov 01, 2017 3:54 pm

Nubo wrote:
abasile wrote:Tesla does have very aggressive goals and Elon Musk is not one to shy away from risk.

The biggest risks for Tesla, in my opinion, would be a stock market collapse and/or an economic downturn. As long as the market is strong and the overall economy is good, I think there will be some patience for Model 3 delays and Tesla will continue to have access to capital.

If the market tanks, I think Tesla will be forced to seek out a large infusion of funds from a cash-rich corporation (recall Tencent's buy of 5% equity in Tesla) or be acquired by another company. TSLA shareholders would suffer, but the brand and the Supercharger network would most likely live on.


Apple. What else you gonna' do with $200 billion in cash? Assuming someone at Apple still wants to change the world.

This is among the biggest risks Tesla shorts face. They are betting that human beings can't solve problems, can't solve them in a given time frame, and that the time frame can't be extended by other human beings who just happen to be good buddies with people at Tesla, drive their cars, and have the means to do practically whatever they want on a whim.
That's a big bet.
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edatoakrun
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Re: TSLA corporate outlook

Wed Nov 01, 2017 8:00 pm

="abasile"

... As long as the market is strong and the overall economy is good, I think there will be some patience for Model 3 delays and Tesla will continue to have access to capital...

Chauncey Gardiner would approve of those sentiments.

There is no way to know when, or why, investors' obsession with greed will finally catch the whiff of failure and degenerate into a panic.

Considering the overwhelming stench already coming from TESLA though, that occurrence might not be too far in the future...

Tesla's Nightmare Before Christmas

By Liam Denning

It looks like Elon Musk just canceled Thanksgiving and probably Christmas, too -- if you work at Tesla Inc., anyway.The electric-vehicle-cum-battery-cum-solar-equipment company Musk heads reported third-quarter results on Wednesday evening. Tesla missed earnings forecasts by a mile. But that number, never a huge concern, mattered even less this time around. It's cash and cars -- specifically the somewhat more mass-market Model 3 -- that count.First, cash: Having racked up its first quarter of burning through more than $1 billion of cash in the three months ending in June, Tesla topped that with $1.4 billion of negative free cash flow in the third quarter. In the past two quarters, therefore, Tesla has burned through more cash than the previous six combined.More importantly, it has burned through roughly four out of every five of the $3.2 billion dollars it has raised since late March through selling new equity and convertible debt and its debut in the high-yield bond market.

Consequently, debt has soared. Even just using debt with recourse to the company, on a net basis it has almost tripled since the start of the year to $3.36 billion.This would matter less if the primary objective of sucking in most of that external funding -- mass production of the Model 3 -- was fast approaching. Instead, it has receded further...

Musk insists these are all early challenges that will be solved and downplays the short-term shifts in the production schedule as being immaterial to the long-term value of the Model 3 and Tesla overall.But the long term is really just an accumulation of short terms. And with Tesla now burning a billion dollars-plus per quarter, keeping the door open to capital markets and lenders is critical. Confidence about scaling up production of the Model 3 is the key to that door -- and it is slipping badly.

https://www.bloomberg.com/gadfly/articl ... -christmas
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Re: TSLA corporate outlook

Wed Nov 01, 2017 10:24 pm

LTLFTcomposite wrote:
Nubo wrote:
abasile wrote:Tesla does have very aggressive goals and Elon Musk is not one to shy away from risk.

The biggest risks for Tesla, in my opinion, would be a stock market collapse and/or an economic downturn. As long as the market is strong and the overall economy is good, I think there will be some patience for Model 3 delays and Tesla will continue to have access to capital.

If the market tanks, I think Tesla will be forced to seek out a large infusion of funds from a cash-rich corporation (recall Tencent's buy of 5% equity in Tesla) or be acquired by another company. TSLA shareholders would suffer, but the brand and the Supercharger network would most likely live on.


Apple. What else you gonna' do with $200 billion in cash? Assuming someone at Apple still wants to change the world.

This is among the biggest risks Tesla shorts face. They are betting that human beings can't solve problems, can't solve them in a given time frame, and that the time frame can't be extended by other human beings who just happen to be good buddies with people at Tesla, drive their cars, and have the means to do practically whatever they want on a whim.
That's a big bet.


Who would really want to buy Tesla, anyway? Basically, all of its technology is widely available and "off-the-shelf". The only real eco-system that's
somewhat of value is the SC system, and that's not all that significant. There's no real barrier to entry to producing a BEV that buying Tesla would 
alleviate. Most importantly why would any company, Apple as an example, want to enter the automotive market where margins are low,
e.g. compared to Apple's existing high gross margin product lines? Tesla's gross margins are now decreasing as exemplified in its Q3 report,
and will continue to decrease.

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Re: TSLA corporate outlook

Thu Nov 02, 2017 3:10 am

^ That's downright silly to suggest that what they have built up doesn't have tremendous value, or that anyone even with unlimited resources could recreate what they have done in a short period of time. The brand alone is worth billions.
None of which is to say it's necessarily smooth sailing ahead, particularly for investors; quite the opposite I suspect.
Most people are too young to remember the history of Amazon. In 1999 people were saying the same things: losing money, anybody can do this, blah blah blah. It lost about 95% of its valuation in the dot com collapse. An investment at that time would have grown 200x in the 16 years since. Picture Tesla going from 380 to 17 a year from now, then in 2035 being at 4000. Think it can't happen? It has before.
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Re: TSLA corporate outlook

Thu Nov 02, 2017 6:59 am

lorenfb wrote:
Nubo wrote:
Apple. What else you gonna' do with $200 billion in cash? Assuming someone at Apple still wants to change the world.

Who would really want to buy Tesla, anyway? Basically, all of its technology is widely available and "off-the-shelf". The only real eco-system that's
somewhat of value is the SC system, and that's not all that significant. There's no real barrier to entry to producing a BEV that buying Tesla would 
alleviate. Most importantly why would any company, Apple as an example, want to enter the automotive market where margins are low,
e.g. compared to Apple's existing high gross margin product lines? Tesla's gross margins are now decreasing as exemplified in its Q3 report,
and will continue to decrease.

I agree w/lorenfb's sentiments. Right now, Tesla's market cap is over $50 billion, which is nutty. Their previous 10-Q SEC filing (latest n/a yet) at http://ir.tesla.com/secfiling.cfm?filin ... IK=1318605 says
As of June 30, 2017 and December 31, 2016, the net book value of our Supercharger network was $236.3 million and $207.2 million, respectively, and as of June 30, 2017, our Supercharger network included 884 locations globally.

Can't see why a company would want to blow over $50 billion in cash or stock or borrowed $ to buy a currently overvalued company that's blowing thru cash like crazy and racking up major losses to boot (somewhere past $3.8 billion in cumulative net loss). AAPL on the other hand reports many billions of $ of positive net income every quarter. We will hear the latest from AAPL on that today.

It's probably less risky for a company to start their own EV program for several billion $, which would still be WAY cheaper than buying TSLA.

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Re: TSLA corporate outlook

Thu Nov 02, 2017 8:51 am

cwerdna wrote:Can't see why a company would want to blow over $50 billion in cash or stock or borrowed $ to buy a currently overvalued company that's blowing thru cash like crazy and racking up major losses to boot (somewhere past $3.8 billion in cumulative net loss).

They wouldn't. But at $20 a share I can easily see them being a buyer. What the actual number is who know, but my guess would be something that would have current shareholders in tears.
cwerdna wrote:It's probably less risky for a company to start their own EV program for several billion $, which would still be WAY cheaper than buying TSLA.

Wasn't that project Titan? How did that work out? As much fun as it is to bash the likes of GM, Ford, Nissan or whatever, building all that from the ground up is a daunting task when you consider design, engineering, marketing, compliance, manufacturing, distribution, a nationwide if not worldwide network of sales and service locations (even if you do hate dealers, you need something), and a bunch of other things I'm sure.
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