What I have learned here is that, in the short term, if the trend is unfavorable, one may temporarily exit but not necessarily stop paying attention. After all, there are companies with better short-term trends. It’s like the opportunity cost that Bear mentioned to me earlier. Of course, some people focus more on long-term trends and overlook short-term noise, just like SNOW experienced short-term noise, but some still hold on to it. They can persevere or switch to other better companies and continue to monitor.
This is something I’ve learned from Saul. When he sold Bill, he bought it back in another season because Bill improved, and Saul was willing to repurchase it.
I appreciate it Analog, and thanks for bringing this to everyone’s attention. Let me show you what they said on the Enphase earnings call.
** Philip Shen
Hi everyone. Thanks for taking my questions. Sorry, I’m bouncing between calls. So I wanted to check in on what you’re doing with pricing on micros in the U.S. Our checks this week suggest your recent spot discounts may be “aggressive” with big customers in exchange for semi-exclusivity. Our contacts suggest that maybe in response to some of the volume that may be going to Tesla. Can you quantify what the magnitude of the discounts might be, if anything? Or what it might mean, if anything, on a blended ASP-basis ahead? I know historically, you always have some kind of spot discount, but incrementally, is it greater now to try to maintain that business? Thanks.
So this is an analyst on the call bringing up the same concerns. Here is the response from Badri Kothandaraman.
Badri Kothandaraman
Right. We are not planning any microinverter pricing reductions in general, overall. As regarding pricing pressure, it is normal for us. Since inception, we are always used to pricing pressure. We are always used to competing with string inverters from Day 1. This company was founded based on distributed architecture wins. Distributed architecture basically means no single point of failure. So distributed architecture means that it’s a semiconductor-based architecture, which basically has got less number of components and very high quality, which means 0.05% failure rates. It also means 25 years of warranty versus other string inverters that may be half that many number of years.
** So basically, to answer your question, pricing is normal. We aren’t planning on any pricing reduction on microinverters. On batteries, it’s a different story. On batteries, I was very clear a month back in the public call, saying that, yes, we introduced our third-generation battery. And we cut the price of our second generation battery.**
That is why I am telling you that it isn’t the microinverters that Tesla is disrupting them on, because Tesla has an inferior product with an inferior warranty, But batteries are a completely different matter. That will be something that will be very hard to compete with Tesla on. Hopefully by selling the whole system integrated they will win more than they lose. But I am a Tesla share holder and an Enphase share holder so there is that.
The above part of the question from the analyst seems to mirror exactly what was in the tweet I referenced. Does this not seem like multiple sources are checking with their contacts in the market and hearing the same thing?
Yes, the CEO said they are not reducing price, but he does not say that they are not losing share.
Does the CEO’s reply instill confidence? He ends his response by saying “But I am a Tesla share holder…so there is that.” What??? This sounds like he’s saying, “well, sucks for ENPH investors, but I’ll be ok either way because I own Tesla”.
He also says (talking about Tesla) - “Hopefully by selling the whole system integrated they will win more than they lose.” I’m wondering if maybe this is not transcribed correctly - as written, it seems like he is saying he hopes Tesla wins more than they lose? If that is what he really said, then I don’t get it.
Below is the Tesla inverter sales propaganda. Is it true? I don’t have any idea. Are naive purchasers going to believe it? Some will. Would I want to be competing against Tesla? Hard no.
I’m not going to reply to anything else on this topic/thread. I apologize if I have been off topic, or if any of the info I have shared is not helpful. This stock has a long history of dramatic price drops and recoveries. This could be another repeat and it could turn on a dime and surge to all time highs. I don’t claim to know what will happen. I wish for success to any who chose to invest in it.
I spent yesterday at the “Tesla Takeover,” an EV event that the SoCal and NorCal owner’s clubs jointly put together in Central CA every year (my Roadster was part of the show again). Tesla had its own booth this year - on Tesla Energy. They built a garage with a solar roof, had samples of the solar roof and panels, powerwlls, etc. I spoke with a fellow who had been with them since the Solar City days.
When I asked about Tesla coming out with features like being able to charge the powerwall off a generator during a power outage, or use micro-inverters for better performance if the roof is partially shaded (and not having a single point of failure), he literally said “Enphase has those features and owns that portion of the market. We’re focusing on other areas.”
Now, that certainly doesn’t make ENPH a good investment (I had sold the few shares I had the day before), but it is an interesting data point that mighty Tesla has ceded some of the market to a competitor, at least so far.