Never Bet Against Elon™️
or,
I Promise I'm Not A Bull But We Should All Try To Think Like One Sometimes
or,
Please Don't Put Me On The BlockList This Is Just a Mental Exercise
0.1/many
$tsla $tslaq
0.2/
0.3/
0.4/
0.6
OK enough preamble lets get into it. Thoughts may jump around, apologies in advance.
0.7/
ASP may not be as bad as some think.
As noted earlier today, @TroyTeslike's Model 3 order tracker indicates that Model 3 ASP **INCREASED** from Q1 to Q2.
This is primarily due to mix and FSD uptake.
$tsla $tslaq
1a/
But that's a big honeypot that can be tapped should Elon ever want to.
1b/
Removal of MR and LR RWD means more LR AWD and P purchases.
1c/
$tsla $tslaq
1d/
S is a dog, no doubt about that. I myself was posting plenty of screenshots of LRs going for $7x,000 until they sold out.
1e/
Both models' ASPs will be hurt by the free luda promo that $tsla ran this quarter, and S was heavily discounted, but overall I don't expect a total cratering.
1f/
mitigating points on potential good ASP:
1) on-the-ground data in the US appears to show a weaker 3 mix than is reported in Troy's sheet. Many more SR+ (and also, prob a ton of those into CA since that was the moneycar in terms of incentives).
1h/
1i/
1j/
MOVING ON...
2a/
(As my managerial accounting professor said, in his opinion, the failure of managers to understand managerial accounting led to unnecessary US outsourcing).
2a.5/
I'm not going to get highly quantitative; I'd would rather keep this at a high level.
Attached is a chart on auto industry costs from marketrealist.com/2015/02/raw-ma…
2b/
Because, when you go from making 63k Model 3's in Q1 to 73k Model 3's in Q2, fixed costs per car decline by ~15% (all else equal), which is going to provide a nice healthy margin boost to Tesla.
$tsla $tslaq
2d/
2f/
Enjoy this part 1 while I compose Part 2 (and 3 and 420?)
We shall resume at 2g, will try to figure out the best way to do this.
$tsla $tslaq
Lets say the average all-in comp exp of those 4k laid off workers was $75k/yr (mostly plant, some white collar).
That's $300m/yr, $75k Q.
needle moving.
2h/
That saves a lot of direct labor expense (which may happen not via layoffs but less OT).
$tslas $tslaq
2i/
2j/
2l/
I'd expect that auto GM clocks in at at least 20% this quarter. @DeanSheikh1 wanna bet?
2n/ NEW TOPIC
we at $tslaq love to laugh at the lemmings suffering but there's a reason for the madness.
Tesla, despite just raising $2b, is pinching every penny right now.
Is it bc they're short on cash? no.
It's because god-king wants to burn shorts.
3a/
3a.5/
1) start making people pay for diagnosis of issues during warranty period. ~$1-200 a pop.
2) Refuse to replace yellowing S/X screens.
3) hit the credit cards of people who are supposed to have unlimited supercharging
4) not improve parts waits.
3b.1/
3b.2/
It's because the god-king thought that profitability may be possible.
I have no idea if they're close.
But so much nickle and diming (when cash is relatively flush) means that the focus finally *IS* on accounting profits.
3b.3/
$tslaq
3b.4/
end of 3/getting to the end
$tsla $tslaq
4.0/
I think @elonmusk f'd up in a big way in his lil cute quarterly deliveries release.
$tsla $tslaq
4a/
because there's no way that the number is impressive.
If we're talking S/X/3 orders, (imo) the number is probably like what, 10 or 15k absolute max? cool, 1 month of orders bro.
If that number gets stated, LOL.
4c/
So, in the immaculate Q pt 2, that's one big mistake to harm story.
4d/
Tesla has always been a contrarian's play.
Who were the bulls who *REALLY* made money?
The ones who bet on a balding @elonmusk talkin crazy stuff about EVs taking over the world in 2012. he looked destined to fail but (kinda) came through.
5a/
Those who shorted 1) after @elonmusk committed the most egregious securities fraud in history and 2) after the magic Q3 deliveries print.
So what does that mean for today?
5b/
Analysts are largely still negative.
$tslaq is highly negative.
( $tsla bulls of course still are extremely rose-glassed for both near-term results and The Story).
But if we/analysts are expecting the worst, that means there's upside potential.
5c/
POINT 0: This is a thought exercise of what could go right for god-king.
Point 1: ASPs may be better than $tslaq expects.
Point 2: Efficiencies from higher volume.
Point 3: other cost cuts signal desperate profit drive.
(continued)
FIN 1/3
Point 5: the overall bearishness of the $tsla/ $tslaq environment right now worries me a bit and is really the motivating factor for me to throw this bullish spaghetti at the wall.
FIN 2/3
$tsla $tslaq
DUN