Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[22522]

On the other hand, hasn't stopped people buying iPhones. (FWIW I'm Google Pixel )

Cases and wraps eliminate the need for extensive variety in manufactured colors. How much does a model Y wrap cost?

 

[Tslynk67]

I just want to take this moment to remind certain people that Tesla hasn’t made or sold a Model X in over 9 months and nobody is missing it. Tesla didn’t make or sell a Model S for over 6 months (I think it was even longer) and nobody missed that either. A handful of people wanted the latest and greatest, but overall Tesla did just fine without either vehicle being produced.

#dontbesurprisedwhenTeslastopsmakingeithervehicleinthenearfuturejustsaying

Hey, I'm missing my new MX Plaid! Model Y just isn't big enough for wife, three teenage kids and three dogs, and CT is no solution in Europe

 

[22522]

I'm a huge SpaceX fan. Love what Elon has done with the company and for space technology. But as an investor, I gotta point out that SpaceX is a minnow compared to Tesla. SpaceX annual revenues are around 3 weeks of Tesla revenues. They have about a tenth of the employees. And the TAM of the underlying market (space launch plus satellite internet) is probably around 1-2% of the TAM of Tesla's market (transportation and energy).

I don’t fully understand.
TAM is an indicator of scale of return on investment.
Maybe SAM in one of its definitions might be useful.

Cost Differentiation is important to some versions of SAM.

Starlink has a low cost and a large SAM.

How expensive would the link be to serve a whole apartment building?

I see the Baron Partner Fund, pointed out on this forum, as a way to obtain Tesla behavioral (management) pattern match guidance in investment decisions.

Returns in disruptive industries are based on races. And management’s ability to win them.

Each heat is about giving the customer choice in comparison to existing products/services/experiences.

SpaceX and Tesla offer choice compared to ICE and the Russians and Verizon. They should both do well. The are winning the race to choice.

 

[RobStark]

Tesla Model 3 Shines in France As Plugin Vehicles Reach 20% Market Share! - CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News! The French plugin vehicle market took its usual holiday in August, with last month’s plugin registrations ending at 17,404 units, divided between 9,916 BEVs and 7,488 PHEVs. The former jumped 78% year over...

cleantechnica.com

 

[RobStark]

Cases and wraps eliminate the need for extensive variety in manufactured colors. How much does a model Y wrap cost?

An installer in Oklahoma City with little experience? Maybe $2k.

An expert installer in West Los Angeles? Up to $10k.

On average $3500 for a basic wrap with basic materials. No fancy wraps with pearl,chrome, paint shifting effect.

Most people would rather pay $3500 to the OEM for a rare/special color paint.

 

[Thekiwi]

There's multiple counters to this argument. But just to point out the years you circled we were in a recession......every stock's P/E multiple was much lower than it usually was for years after the market crashes and P/E multiples across the board are much higher today than in those years. Apple's current P/E is 29............

Also, a big part of the reason Apple's P/E was so low to begin with is because they actually hard earnings from a early stage, mainly because while the Iphone business was new for them, the company was matured and could realize profits much sooner than a growth company starting from nothing.

Pretty easy to plot out the timelines as to why Apple's P/E never really got high.

Pre 2007 - Apple is still making money on their Mac lineup, they had 2 billion in net income that year.

2007 - Iphone is release, some hype but questions about how big it could be and to note...the company was already making 3.5 billion in net income

Years 2008- 2012 - Iphone is big success but country in recession which will depress all stock's P/E....plus Apple is able to realize profits right away which again keeps their P/E low. Their net income essentially keeps up with the stock gains....keeping the P/E multiple low.

Years 2013-2020 - Revenue growth slows considerably, is lumpy, and especially, net income starts to stall. Wall St's expectations for future earnings drops and thus their P/E never really get's higher than what it's always been.

It wasn't exactly fair for Apple to a low P/E during the first 4 years of the Iphone........but there were situational circumstances around it

I was simply answering the question as asked:

“Have those levels of PE and growth ever combined in a company of this size?”

To that I answered that in fact yes there was a large cap company with similar growth metrics at the start of its S cycle - and it was priced on a P/E basis an order of magnitude cheaper than Tesla.

Since Apple launched the iPhone in early 2007, they have grown revenue by 1500% ($19B to $325B), and it’s net income by 3500% ($2B to $76b). Notice that Apples revenue and income back then were smaller than where Tesla is now.

My own expectations for Tesla are similar to the above over the next decade, if not greater.

(I’ve been covering Apple as an amateur analyst & investor for over 15 years, so am very aware of the rollercoster it has been on and the various narratives it has been subjected to by others to try and justify it “being doomed” and why it had a low PE).

 

[FS_FRA]

An installer in Oklahoma City with little experience? Maybe $2k.

An expert installer in West Los Angeles? Up to $10k.

On average $3500 for a basic wrap with basic materials. No fancy wraps with pearl,chrome, paint shifting effect.

Most people would rather pay $3500 to the OEM for a rare/special color paint.

Good wrap for a Model S in Frankfurt is €4000-€5000 ($4700-5900) - MY probably the same (surface area) and CT would be higher (assuming it makes it to Europe). You've got to be a special kind of vain I guess...?

 

[The Accountant]

Troy has increased his Q3 Deliveries from 220k to 225k.
He as an odd assumption that Models 3&Y from Fremont will drop vs Q2.
Q2 - 111,520
Q3 - 95,907
That's a 15,613 drop in deliveries out of Fremont.

In response to a challenge on Twitter, he comments that production will be higher but that Tesla will likely build some inventory in Q3.
This does not sound logical based on the wait times we are seeing for new orders. Why build inventory when you have orders on hand?

So if you add the 15k difference to his 225k . . . . . .you get my 240k number. So we differ on one assumption.
Let's see if he continues to adjust his number up.

 

[Artful Dodger]

Well, it's been one year since our family lost EV TV host and TSLA investor Jack Rickard to lung cancer.

His team has put together this tribute video, including an 8-min clip from one of Jack's last videos:

EVTV Friday Show - "Bolt Recall and Jack Tribute"

You are missed, but not forgotten.

Cheers, and much love Uncle Jack!

 

[EVMeister]

Troy has increased his Q3 Deliveries from 220k to 225k.
He as an odd assumption that Models 3&Y from Fremont will drop vs Q2.
Q2 - 111,520
Q3 - 95,907
That's a 15,613 drop in deliveries out of Fremont.

In response to a challenge on Twitter, he comments that production will be higher but that Tesla will likely build some inventory in Q3.
This does not sound logical based on the wait times we are seeing for new orders. Why build inventory when you have orders on hand?

So if you add the 15k difference to his 225k . . . . . .you get my 240k number. So we differ on one assumption.
Let's see if he continues to adjust his number up.

View attachment 710005

Based on his track record for the past few quarters, how much weight should we really put on Troy's figures? The more models the merrier I guess, but I think your models are very well-reasoned and better researched.

 

[The Accountant]

Based on his track record for the past few quarters, how much weight should we really put on Troy's figures? The more models the merrier I guess, but I think your models are very well-reasoned and better researched.

Troy's final number for the quarter has many times been better than mine. However, he tends to start low with his first forecast and then revises them up.
Troy takes an admirable approach to forecasting . . . he takes the demand approach . . . looking at VIN registrations, insurance registrations, ships, etc.
That's a lot of work when you have to track demand and deliveries in dozens of markets.

I take the lazy-forecasters Production approach. Since I believe Tesla will sell everything it can produce, I generate my forecast computing production for 2 factories and then I keep an eye out for any logistics issues . . .and try to determine if the cars produced will get delivered on time.

It's easier to forecast production for 2 factories than demand for dozens of markers.
I do appreciate Troy's work as it can help validate some of my work.

 

[Todd Burch]

Troy has increased his Q3 Deliveries from 220k to 225k.
He as an odd assumption that Models 3&Y from Fremont will drop vs Q2.
Q2 - 111,520
Q3 - 95,907
That's a 15,613 drop in deliveries out of Fremont.

In response to a challenge on Twitter, he comments that production will be higher but that Tesla will likely build some inventory in Q3.
This does not sound logical based on the wait times we are seeing for new orders. Why build inventory when you have orders on hand?

So if you add the 15k difference to his 225k . . . . . .you get my 240k number. So we differ on one assumption.
Let's see if he continues to adjust his number up.

View attachment 710005

Have you read the latest notes from UBS’s meeting with Tesla Investor Relations (Martin Viecha)? See Tesla Daily’s latest Youtube video from Rob Maurer.

Among the points:

1. Most of the recent price increases were not yet visible in Q2 and will show up in Q3/Q4. Should add several hundred million straight profits to Q3 vs. Q2.

2. MIC cars sold to the western world (Europe) are the most profitable cars. There was a LOT of that in Q3.

3. High point for China demand starts in Oct, so no concerns for domestic demand there. (Perhaps leading to additional price increases in China?)

4. Elon sees opening up the Supercharger network in Europe as a revenue opportunity, so anticipate Tesla looking to bank on that starting in 2022. Thus Superchargers will directly become a revenue stream for Tesla.

5. Tesla is starting to feel FSD/AI will be more proprietary/exclusive tech into the future, vs previous views showed they felt it would be more of a commodity. This implies Tesla could have a longer high revenue stream with both exclusivity and/or selling FSD to other automakers for a longer time.

All of these things affect both long and short-term forecasts to the positive, although I imagine you’ve probably modeled for them all. Just curious if this new official info adjusts your forecasts at all. Certainly makes TSLA appear even more attractive as a longer-term investment…

 

[Pezpunk]

Based on his track record for the past few quarters, how much weight should we really put on Troy's figures? The more models the merrier I guess, but I think your models are very well-reasoned and better researched.

we're very spoiled if we're calling Troy's estimates inaccurate. he's within 10% every time and usually within 5%. Projecting something that can be as noisy as quarterly deliveries, that's pretty impressive in my opinion. Glad we have multiple sources taking multiple approaches to validate each others' work.

 

[The Accountant]

Have you read the latest notes from UBS’s meeting with Tesla Investor Relations (Martin Viecha)? See Tesla Daily’s latest Youtube video from Rob Maurer.

Among the points:

1. Most of the recent price increases were not yet visible in Q2 and will show up in Q3/Q4. Should add several hundred million straight profits to Q3 vs. Q2.

2. MIC cars sold to the western world (Europe) are the most profitable cars. There was a LOT of that in Q3.

3. High point for China demand starts in Oct, so no concerns for domestic demand there. (Perhaps leading to additional price increases in China?)

4. Elon sees opening up the Supercharger network in Europe as a revenue opportunity, so anticipate Tesla looking to bank on that starting in 2022. Thus Superchargers will directly become a revenue stream for Tesla.

5. Tesla is starting to feel FSD/AI will be more proprietary/exclusive tech into the future, vs previous views showed they felt it would be more of a commodity. This implies Tesla could have a longer high revenue stream with both exclusivity and/or selling FSD to other automakers for a longer time.

All of these things affect both long and short-term forecasts to the positive, although I imagine you’ve probably modeled for them all. Just curious if this new official info adjusts your forecasts at all. Certainly makes TSLA appear even more attractive as a longer-term investment…

Thanks - yes, I did see the UBS notes. I have factored for all of the items in my forecast but I did so conservatively.

For example,
I have the Model Y average selling price flat as the price increase in US is offset by the introduction of the Y SR in China.
I also have the Model 3 pricing flat when that should be higher but I was worried that the 3SR could drag down pricing.
On cost, I have the Model Y decreasing $300 per car vs Q2 despite more Ys coming from low cost Shanghai and cheaper cost Y SR sales.
Cost per vehicle on the Model 3 is only $100 lower - it can be much better than $100 - just the saved logistics on the Fremont production being delivered locally would more than provide the $100 savings.

My financials were so strong, I found it difficult to take more aggressive assumptions.

Using an American Football analogy, I threw a deep bomb with my financials but I didn't step into the throw . . . it's possible the ball will fall short.

 

[SwTslaGrl]

New huge delivery center!

 

[jerry33]

Obvi… But as far as I know they don’t report it. I am looking for crowdsourced data. Something more quantitative than anecdotal evidence

There is a dashboard at the local Service Centres (at least the ones that I've been to) where you can see the usage.

 

[ZeApelido]

I take the lazy-forecasters Production approach. Since I believe Tesla will sell everything it can produce, I generate my forecast computing production for 2 factories and then I keep an eye out for any logistics issues . . .and try to determine if the cars produced will get delivered on time.

I take the ultra-lazy forecasters approach where I just copy all of your predictions and add small random numbers to make me feel better.

 

[Krugerrand]

Hey, I'm missing my new MX Plaid! Model Y just isn't big enough for wife, three teenage kids and three dogs, and CT is no solution in Europe

You can’t miss something you never had in the first place.

 

[Todesbuckler]

A website for the Berlin Giga Country Fair is online:

Agentur für individuelle Software Lösungen | Pixobytes

giga-fest.com

Priority for Berlin and Brandenburg residents. Possibility to add one adult and some kids.
(if someone from Brandenburg or Berlin is willing to add me, that would be great!)

 

[petit_bateau]

I'm only going to say this once more so pay attention!

The number of vehicles in the fleet per Supercharger connections will rightfully trend up towards some number above 40-67 vehicles per Supercharger. I'm not going to try to quantify that number because Tesla has the required data, I do not.

The reason fewer connections per vehicle are necessary as the network matures would become apparent if you lived and travelled in less populous areas as I have. You will observe that most Supercharger stations have at least 4-8 stalls and it's rare for them to be even 1/8 utilized. Over the last several years Tesla has been increasing the reach of it's Supercharger network to increasingly rural and less popular routes which has pushed the number of connectors per car to a higher number than will be ultimately needed. While it's true the fast rate of growth of deliveries has created choke points on busy holidays near large population centers, Tesla has made a conscious decision that it was more valuable to the brand to expand the reach of the network at the expense of eliminating all wait times during the busiest holiday weekends around populous areas. You can debate the wisdom of that all you want but the point is, Tesla's strategy has resulted in much unused capacity on rural routes that will not need to be doubled in proportion to the doubling of the fleet size. Large areas of the network are only used at less than 5% capacity so don't make the mistake of thinking that new connections need to grow in exact proportion to the fleet growth.

There are other factors that also allow this ratio to increase over time, one of which is the fact that cars with free Supercharging for life are becoming a much smaller percentage of the fleet every year. Yes, some people were attracted to Tesla early on because they love to get something for nothing and have a disproportionate amount of Supercharger use. People who did regular long highway trips were disproportionately attracted to Tesla for the free Supercharging. Those cars are slowly falling off the network for various reasons and are being outnumbered by new production which does not have free Supercharging and has a higher number of daily commuters who charge at home.

And, as other's have pointed out, Tesla has more manufacturing capacity than 10,000 Superchargers/year and will increase it as needed. I understand that people shouldn't ever have to wait but they also shouldn't be limited as to which rural areas they can visit. Tesla has the data to calculate the ratio of cars/connection that will be required as the network continues to mature but I believe both of these restrictions/inconveniences (rural availability and peak holiday availability) will improve over time without decreasing the number of cars per SC connection (because utilization of each connection will rise). Another way to say this is that we only needed one connection for every 40 vehicles when most connections had laughably low utilization.

I'm sorry, but whilst aspects of what you say are correct, it is extremely US-centric in its worldview. For most of the world Tesla is still in full-blast network build-out mode and so needs to be at the lower end of the contention ratio range (.... 40) rather than the higher end ( .... rising 67).

What you have written may - or may not - be a perfectly valid explanation of the Tesla build-out strategy in the USA. I simply don't know, though I suspect you are largely correct, but I know that I don't have the data to be sure. Tesla does have the data, so I let them get on with it, and I try to get better data whenever I can.

However outside of USA there are still huge gaps in the network that simply have to be filled at the same time as building density in the conurbations, even more so as Tesla increasingly accesses European and Chinese market segments that don't have their own driveway and/or parking place. Both the gaps and the density matter. And both contribute to contention ratio (which I can track) and other things that I cannot track - such as utilisation ratio; time per charge; kWh per charge; time of charge; diurnal/ weekly/ seasonal variation; SoC on arrival/departure; journey length/duration; vehicle model; occupancy; etc. Given all the things that I would dearly love to know, but do not know then inevitably I must fall back on the one metric that I can track with confidence.

As a for-example re the gaps let us consider northern European families that holiday in Greece via road-trip. This is quite common, the driving season is not just a US-phenomenen. I've just driven that road through the Balkans and it is not currently viable using the Tesla charger network. So for that family contemplating buying a Y as the high-end vehicle in what would be a typical two-car European family's car-mix, they simply will not press the 'yes' button on the Tesla Y purchase. Within 18-months we need them to be pressing that 'yes' button. Here in Europe, in China, in Canada, in Mexico, in Australia. And soon after in Brazil, India. So for the next several years we should expect/hope/anticipate that contention number to trend downwards rather than upwards.

I am very glad to see that as a company Tesla is not overly US-centric. On some things yes, but the balance is within the acceptable range, which is contributing to the success of Tesla. That matters to me as an investor, and it is why I watch things like contention ratios and connector styles and model development and etc quite closely.