Tesla security analysis - Q3 2018

Anyone have any shares in Tesla?

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Yep! :raising_hand_man:

:raising_hand_man: Yes, I have some now. Not regretting it, yet…

I found the news on hitting the 35k price point interesting and important - that’s where they could really hit the mainstream car market which is far larger than their current market.

Suspect they have cut jobs and sales channels to hit that price point before the other car makers can compete. A bold bet.


I’ve been in one of the new Tesla’s and thought it was a fantastic car. However, I recently seen a BMW i3 and was blown away by it.

What troubles me when it comes to buying cars is how quickly the depreciate in value. A new BMW i3 is about £35k but you can pick up a model from 2016 and it’s around £18k. Half of the value is lost in the first 3 years. Given how quickly the value falls off I doubt I’d ever buy a new car.

Tesla depreciation performance is not too bad, especially considering the EV average so far.
You’re right though it makes far more sense to either lease or purchase 12-36 month old used.

Someone at Barclay’s has set a price target of $192. The share price is certainly coming down but quite a bit to go if its to reach those levels.

Have you seen this



Here’s some more ‘FUD’ :wink:



Just read that analysis which was quite solid.

I think the <$200 targets are just a little…questionable (I am physically restraining myself typing that). Have to say that Tesla has pretty much a make or break year ahead of it, we’re seeing a mountain piling on right now with China, stores and the Crawley fire, SEC and profitability. If the Model Y reveal is even remotely close to “meh” I think I might be start getting ugly…


As I mentioned, I think this is good news but changing course like this makes it seem like their strategy’s not that well thought out :cold_sweat:

Edit - maybe this is why:



I don’t even know what to think anymore lmao

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Model Y is cheaper than I thought it would be, it also looks good, specs are nice as well.

They mention 15 minutes charge gets you 168 miles, this will be the next major competing point, especially since the Porsche Taycan can provide a 62 mile range in 4 minutes. Feels like Tesla might be headed in the wrong direction on pay per use for the chargers, when again Porsche will provide free charging points for 3 years.

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I’ve had some time (and sleep!) to digest Q1 Earnings, which you can access here, initially fearing for the worst I think there are silver linings in the shareholder letter.

  1. The loss of $522m is not great, but isn’t wildly out of control, given the bond payment and the mysterious $188m of non-recurring costs that Tesla mentioned. The cash balance of $2.2bn is also not too worrying for the reasons below, but its now realistically dipping below $2bn for the first time since 2015 thanks to VAT payments and other immediate costs. Even Elon has hinted at the possibility of a capital raise.
  2. Capex & Capacity: Capex is being used on the Semi Truck, scaling Solar, Model Y and Service+Charging network. Shanghai Gigafactory is being financed using Chinese debt, if you’ll remember, but unclear when it should be online, especially if China enters a slowdown or Trade wars intensify. Energy revenues were also severely limited by battery capacity which was routed to M3 production. Some are estimating solid growth (c. $2bn) once more in this segment for the year. Automotive production is also modestly improving (Musk on the call scoffed that 5000 cars a week is no longer a problem).
  3. There are plenty of positives: Model Y and Shanghai-built Model 3 margins are likely going to be very juicy (See Relative capex per unit of capacity graph on p. 2) and should help reverse the gross margin trend. Autopilot/Robotaxi is a long-term revenue stream that could start being realised within two years, and the progress confirmed for the Solar Roof this year should also help with the eviscerated Energy margins too. Tesla detailed how inventory issues are not quite as bad as many thought, although it’s hard to see how they can stop inventory buildup worsening with European expansion looming. Musk also confirmed on the call that stores will not be axed, simply trimmed where necessary (this is objectively a positive given the lease costs involved with closure). In line with all this, Tesla guides positive operating cash flow and profitability from Q3, which actually seems probable.
  4. Demand: Tesla laid the blame almost entirely on seasonality and adjustments in lineups/production, but we simply don’t know how true this is yet. Non-US markets will obviously drive Model 3 demand for the rest of the year, but a ~50% reduction in S+X deliveries YoY is worrying, and market-beating range upgrades are not going to double sales on their own. Watch out for S/X deliveries in the Q2 letter, and if they slip further, alarm bells should start ringing in Palo Alto.

A minor clarification: Tesla has confirmed it will be using several battery suppliers for Shanghai. Together with the negative Panasonic news this could be the end of a decade-long friendship.


I’ve felt they have been overvalued and even with the 25% drop of share price of last year I still won’t touch them. I just don’t know how they keep finding cash.

Just like with Uber, people believe in its future success and are happy to keep injecting cash.


I listened to the earnings call last night. I was rather encouraged to be honest and over the next couple of years I’m hopeful they can start bringing in more of those additional revenue streams. At the moment there is definitely a blockage in battery production which is slowing down activity in the power wall sector whole they prioritise the use for cars but this year they suggested lore capacity would go to power wall and that things like the solar roof tiles will start earning next year in earnest.

If they can work with regulators over then next few years on the automatic taxis then that would be very exciting.

Tesla stated last night that all tesla currently being sold will be able to be turned in to auto taxis and earn their owners an additional revenue, not to mention for tesla I would have thought too.

My own opinion and do your own research. Obviously I choose to believe what they say, not everyone will.


Yes I think Musk is a huge liability to Tesla, but also a huge asset. He clearly sees where the industry is going and will sacrifice anything but himself to get there, but his timelines are far too optimistic (a deliberate tactic I suspect to drive employee sacrifice) and he can’t resist taunting competitors. I too am optimistic in the long term for Tesla, esp. if he finds some capable operations people as at spacex. The software talent he has there is impressive IMO.

I’ve now invested in Tesla and will be interested to see what happens but it is my riskiest investment outside crowdfunding.

Always entertaining though!

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It is entertaining. Just have to look at the leafblower tweet he sent out the other day :grin:

Only down side is I have shares in tesla at HL and want to bring them to freetrade and top up while prices are lower than I originally paid :sweat_smile:


Happy birthday :partying_face:

Did you get an electric leaf blower?

Pretty sure my blood sugar has spiked with the birthday cake and cake day cake in this thread today


I wish…