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

[Knightshade]

I think you’re right. The second definition is so weird though. There are very few things people don’t ever want to buy. If someone isn’t willing to pay, say, $20k for a Tesla, do they want to buy a Tesla or no?

This is why demand needs to be tied to a specific price level. Hence the demand curve, which I know is an economics concept…

But now I understand why I and many others got downvoted for saying Tesla cut prices because demand was lower than supply. Really thought this was intuitive to everyone.

2023 Tesla Model Y + $7,500 Federal Tax Credit $47,240 (For Qualifying Buyers)

Tesla has dropped the base price of the Tesla Model Y from $52,990 down to $46,990-> Now $47,240. All Model Y vehicles also qualify for the $7,500 Federal Tax Credit (details here). ...

slickdeals.net

78 page thread, in only 48 hours.... with plenty of people who say they'd never buy a Tesla at any price.

And plenty of others making the exact "not the econ 101 definition of demand" argument I mentioned.

Now recently updated with earnings call FUD like a dude who just posted Tesla is gonna sell these at a loss to move volume and the Y will be 30k later this year.

 

[AndrewZ]

All vehicles will move, and sequentially more and more vehicles will need move each quarter, the question is at what prices will they move.

If interest rates stay higher for longer, that will be downward pressure on prices.
Pumping more and more of the same thing into a market creates downward pressure on prices.
If we hit an actual recession, unemployment begins increasing, economy weakens, that will create downward pressure on prices.

Costs need to be cut to offset this, both through things directly under Tesla's control and through suppliers who are pricing based on their own input costs from commodities and labour + markup. Big part of the Central Bank's focus right now is avoiding a wage-price spiral, where wages increase in response to higher prices and those wages drive up labour costs for companies that then cements and exacerbates inflation that likely requires more rate hikes to subdue because either margins need to compress (less likely) or prices need to go up to maintain margins (more likely).


Anecdotally I'm aware of substantial wage increases just recently happening or in the pipeline in labour unions here within Canada. One union I work with just two weeks ago signed a new contract with a 13% increase in base wages over the next five years, the first increase in a long long time.

 

[Hiline]

Here is my main issue with the "FSD is more important than anything else" line of thinking:

Yes I do believe FSD will be revolutionary, eventually, BUT I also think it will take a long, LONG time to play out even after the point where FSD reaches Level 5. Once FSD is solved I do not think we are going to see an immediate massive inflow of revenues to Tesla.

Currently FSD costs $15,000 to buy, it will likely cost more once it is Level 5. How many normal everyday people will be willing to pay that price for software when it only does something they can do themselves and already do every day (driving)? I know the argument is "people will pay it happily" but my hunch is they won't because it's just too expensive for a luxury they don't need. I know I have no intention of paying $15K+ for it, I'm completely happy with standard Autopilot on my Model Y. Sure some people will buy it, but Elon's constant statement that "FSD will be the largest value increase in history" feels overly optimistic to me.

FSD being solved probably won't be a "switch throw" for immediate revenues nor an immediate increase to TSLA. A few Tesla owners will pay the huge price tag, some taxi style companies will grow around it and deploy robotaxi services, and Tesla themselves will most likely build their own robotaxi fleet. But that will take time, a lot of time, to set up, build, and deploy.

What if very few people buy it? What if few people want to use robotaxis? What if FSD never gets solved? What if someone else like OpenAI somehow incredulously gets there first? There is so much uncertainty to this prophetic forecast for the future of Tesla and TSLA that relying on it to bring value to the company and stock worries me.

In the meantime Tesla needs to survive and be world leading without FSD, and while I am confident it will, here on TMC we are all concerned about our shares of TSLA. And I'm pretty sure we would all rather our TSLA went up instead of sideways or even down. Whenever I hear Elon (or anyone) claim FSD is our Ace in the Hole to get margins back up again I shudder, because that is both an extremely long term and uncertain outlook.

I see you’re skeptical about the development and use cases of FSD, just like I was about AI 5 years ago. ChatGPT made me change my mind. Fully autonomous vehicles will be here - nobody is certain when, but it’ll be here and people will pay for this convenience. Not everyone likes driving. And not everyone should be a driver. Tons of people commute over an hour to work or go on road trips. Time is money, and safety is more important than anything else when you go on the road. Maybe you don’t value time and safety as much, but millions of others, including me, do.

 

[cab]

Here is my main issue with the "FSD is more important than anything else" line of thinking:

Yes I do believe FSD will be revolutionary, eventually, BUT I also think it will take a long, LONG time to play out even after the point where FSD reaches Level 5. Once FSD is solved I do not think we are going to see an immediate massive inflow of revenues to Tesla.

Currently FSD costs $15,000 to buy, it will likely cost more once it is Level 5. How many normal everyday people will be willing to pay that price for software when it only does something they can do themselves and already do every day (driving)? I know the argument is "people will pay it happily" but my hunch is they won't because it's just too expensive for a luxury they don't need. I know I have no intention of paying $15K+ for it, I'm completely happy with standard Autopilot on my Model Y. Sure some people will buy it, but Elon's constant statement that "FSD will be the largest value increase in history" feels overly optimistic to me.

FSD being solved probably won't be a "switch throw" for immediate revenues nor an immediate increase to TSLA. A few Tesla owners will pay the huge price tag, some taxi style companies will grow around it and deploy robotaxi services, and Tesla themselves will most likely build their own robotaxi fleet. But that will take time, a lot of time, to set up, build, and deploy.

What if very few people buy it? What if few people want to use robotaxis? What if FSD never gets solved? What if someone else like OpenAI somehow incredulously gets there first? There is so much uncertainty to this prophetic forecast for the future of Tesla and TSLA that relying on it to bring value to the company and stock worries me.

In the meantime Tesla needs to survive and be world leading without FSD, and while I am confident it will, here on TMC we are all concerned about our shares of TSLA. And I'm pretty sure we would all rather our TSLA went up instead of sideways or even down. Whenever I hear Elon (or anyone) claim FSD is our Ace in the Hole to get margins back up again I shudder, because that is both an extremely long term and uncertain outlook.

While I share much of your concern (especially since Tesla routinely touts manufacturing efficiency as their Ace in the hole), I would add that I dont think they plan to get $15k+ for FSD. Future monies will likely come from monthly subscriptions...a much more palatable option for folks...especially if they make it a reasonable price. Heck, EVERYTHING, is going subscription based - sheesh, the MyQ garage door opener software is...and it's a GARAGE DOOR for Pete's sake! I can see special sales on it, 3 month trial offers, the list goes on and on.

 

[NicoV]

Some data about the Belgian new car market in Q1: https://www.tijd.be/ondernemen/auto...an-populairste-auto-s-in-belgie/10461958.html

Headline: “Tesla races with Model Y to the top of the most popular cars in Belgium”

- 16% EV’s, now more than diesel.
- 21% EVs in the professional/company car market. This segment is 2 thirds of the total new car market.
- Model Y is the 3d most popular car (3.140 new cars), Volvo XC40 (3.231) and Toyota Yaris (3.141) sell slightly better. (So I wouldn’t be surprised if Model Y is the number 1 selling car from Q2 on).
- 83% (2610) of all Model Y’s are bought in the professional market. Model Y is in second place in that market, behind XC40 with 2812 sales.

A reminder: the (tax based) phaseout of ICE in the professional market starts at the end of Q2.

 

[ggies07]

It's very odd to me that WS continues to discount Tesla's achievements with this downward stock price action.

Say one day everyone wakes up and all cars are Teslas...will WS still say "see....margins blah blah blah".

This *sugar* is tiring.

 

[Hiline]

2023 Tesla Model Y + $7,500 Federal Tax Credit $47,240 (For Qualifying Buyers)

Tesla has dropped the base price of the Tesla Model Y from $52,990 down to $46,990-> Now $47,240. All Model Y vehicles also qualify for the $7,500 Federal Tax Credit (details here). ...

slickdeals.net

78 page thread, in only 48 hours.... with plenty of people who say they'd never buy a Tesla at any price.

And plenty of others making the exact "not the econ 101 definition of demand" argument I mentioned.

Now recently updated with earnings call FUD like a dude who just posted Tesla is gonna sell these at a loss to move volume and the Y will be 30k later this year.

I bet you if Tesla cuts prices enough all of those “never Tesla” will jump on a Tesla. “Never” should not be literally interpreted.

 

[Webeevdrivers]

Here is my main issue with the "FSD is more important than anything else" line of thinking:

Yes I do believe FSD will be revolutionary, eventually, BUT I also think it will take a long, LONG time to play out even after the point where FSD reaches Level 5. Once FSD is solved I do not think we are going to see an immediate massive inflow of revenues to Tesla.

Currently FSD costs $15,000 to buy, it will likely cost more once it is Level 5. How many normal everyday people will be willing to pay that price for software when it only does something they can do themselves and already do every day (driving)? I know the argument is "people will pay it happily" but my hunch is they won't because it's just too expensive for a luxury they don't need. I know I have no intention of paying $15K+ for it, I'm completely happy with standard Autopilot on my Model Y. Sure some people will buy it, but Elon's constant statement that "FSD will be the largest value increase in history" feels overly optimistic to me.

FSD being solved probably won't be a "switch throw" for immediate revenues nor an immediate increase to TSLA. A few Tesla owners will pay the huge price tag, some taxi style companies will grow around it and deploy robotaxi services, and Tesla themselves will most likely build their own robotaxi fleet. But that will take time, a lot of time, to set up, build, and deploy.

What if very few people buy it? What if few people want to use robotaxis? What if FSD never gets solved? What if someone else like OpenAI somehow incredulously gets there first? There is so much uncertainty to this prophetic forecast for the future of Tesla and TSLA that relying on it to bring value to the company and stock worries me.

In the meantime Tesla needs to survive and be world leading without FSD, and while I am confident it will, here on TMC we are all concerned about our shares of TSLA. And I'm pretty sure we would all rather our TSLA went up instead of sideways or even down. Whenever I hear Elon (or anyone) claim FSD is our Ace in the Hole to get margins back up again I shudder, because that is both an extremely long term and uncertain outlook.

Agreed. Overall good outlook for the company. But too much reliance on FSD going forward. More people need to drive an FSD vehicle to see just how far it is from even a limited level 3 system. It has changed marginally in the last 18 months and in many ways is worse. Keep developing it sure but enough with the pipe dream of it ever being any kind of level 4 or 5 system with existing hardware. This kind of thing scares investors away, or at least the ones who have ever been in an FSD car. And for gods sake please change the name. That’s just an ongoing embarrassment for the company.

Jmho

 

[jerry33]

It's very odd to me that WS continues to discount Tesla's achievements with this downward stock price action.

Say one day everyone wakes up and all cars are Teslas...will WS still say "see....margins blah blah blah".

This *sugar* is tiring.

It's not odd when you consider that much of WS is invested in fossil fuels.

 

[Krugerrand]

What if very few people buy it? What if few people want to use robotaxis? What if FSD never gets solved? What if someone else like OpenAI somehow incredulously gets there first? There is so much uncertainty to this prophetic forecast for the future of Tesla and TSLA that relying on it to bring value to the company and stock worries me.

There have always been what ifs. There will always be what ifs. Either you believe the company can or you believe they cannot. It’s really that simple. As simple as is was over a decade ago before Model S hit production.

Invest accordingly. Don’t know what else to tell you. If you see a truck coming while attempting to cross the street, stay on the curb.

In the meantime Tesla needs to survive and be world leading without FSD, and while I am confident it will, here on TMC we are all concerned about our shares of TSLA.

Tesla will survive until FSD comes to fruition. They literally told you that. But you need to get it out of your head that they’re not depending on FSD. Again, you’ve been point blank told by the CEO that FSD is crucial and they are banking on it.

Invest accordingly. Simple. If you can’t afford to lose your investment in TSLA, then get out. If you don’t like the direction the company is going in, get out. If you don’t think they can achieve their goal, get out. If you’re against the mission, get out. If the risk is more than you want to deal with, get out. If you don’t want to deal with the WS shenanigans, get out.

And I'm pretty sure we would all rather our TSLA went up instead of sideways or even down. Whenever I hear Elon (or anyone) claim FSD is our Ace in the Hole to get margins back up again I shudder, because that is both an extremely long term and uncertain outlook.

Then you know what you must do for your peace of mind and financial situation. Why are you fighting it?

 

[ItsNotAboutTheMoney]

I see you’re skeptical about the development and use cases of FSD, just like I was about AI 5 years ago. ChatGPT made me change my mind. Fully autonomous vehicles will be here - nobody is certain when, but it’ll be here and people will pay for this convenience. Not everyone likes driving. And not everyone should be a driver. Tons of people commute over an hour to work or go on road trips. Time is money, and safety is more important than anything else when you go on the road. Maybe you don’t value time and safety as much, but millions of others, including me, do.

If ChatGPT were an autonomous vehicle, it would have been totaled already.

With autonomous AI, impact of error is a very important factor and for AVs, impact of error is _huge_.

If you want to see ChatGPT as a signal of for autonomy, you could say that L2 driver assistance systems like current FSD are going to become extremely capable, and limited L3 will be common, but there's no guarantee that we will ever have significant AV.

 

[Paul_SF]

Great Visual of the earnings. The Energy bucket will/can surpass Auto in how many years?

 

[unk45]

On what feels to me like a tematically related, but perhaps more sober note. May be not in the style of the moment after the earnings call, but...

Does anyone else get a sort of overall feel that Tesla is doing a outstanding job of managing/throttling the money flows to keep all the the plates spinning in this rather wild macro environment:

Outflow side (all with interrelated demands and unpredictable features)
1) Rapid development towards revolutionizing low-cost, low-embedded-energy, mass-produced batteries. Costly, esp. in terms of time.
2) Rapid development of unheard-of-efficient manufacturing techniques to be implemented in a factory shortly. Costly to start up - no production for a year plus.
3) Rapid costly (infrastructure always is!) development of the Supercharger network: absolutely required STILL (in the US anyway) to enable expansion in sales / mission
4) Rapid investment in GW scale stationary storage production on multiple continents (hopefully less costly than automotive factory but still - startup costs).
Basically, tons to spend money on, none of which can be ignored.


Inflow side (also hard to predict or even [in the case of legislation] understand)
1) Automotive demand, per quarter or faster, per market (Elon asked for a crystal ball on this IIRC) to determine pricing
2) Government subsidies, with rapidly changing/clarifying rules, possibly up for cancellation due to politics. Predict that, bookies!
3) Probably other stuff here I'm not aware of since I'm not an accountant type

They have to balance these forces (and more) in real time without starving any one priority for too long, and they are certainly interrelated in weird ways. After Investor Day, I am not worried that this all has to be in Elon headspace, but even for a 20 person management team, they have a lot to manage.
This Q1 report strikes me as Tesla managing all these things well enough to stay above water, while the world/market goes through a trough between ocean waves. If you can keep your head above in the trough, you will be 6 feet high when the next wave comes.

My $0.02. I'm staying long - if prices do dip, and dip enough, will nibble a few more kibble.

Re: Supercharging: Everywhere! not just the US. Tesla is entering new countries where building Superchargers is vestigial of non-existent. From Singapore and Thailand we need much better coverage, and Malaysia, between the two needs many Superchargers. Then consider the expectation as Elon said, to add many more countries. Soon there will be South Africa, Brazil, Argentina, Saudi Arabia, Oman and Chile, plus Alaska and South Eastern Europe, the Balkans and much more density throughout Europe and North America, including, again, Alaska (that, if only to serve the founder of our Forum).
Despite all the capital required to build all those Superchargers, making them accessible to non-Tesla will immediately afford better revenues that would Tesla sales alone.
Unless someone has better evidence I will be shocked if all this infrastructure buildout will become any sort of earnings drag, in major apart due to immediate revenue.

As for stationary storage, each utility-level installation can be supported by itself, not too much direct investment required. Further, global utility storage demand is rising more quickly even that is solar and wind deployments. Why? Storage now can replace the vast majority fo speaker plants, making cheaper peak management and more efficient operation fo even inflexible ancient coal plants, that are still less dirty when operated in a steady state. As tesla keep telling us, the constraint is production capacity and nothing else.

As Elon and Zach made clear the next years are destined to be devoted to scale, scale and scale. Once both Cybertruck and the 'new platform' arrive scaling fo automotive will speed also.

In sum, we should all care about margins, COGS and, above all, Free Cash Flow. More basically as shareholders we bought the Mission...

Thus, we should encourage good competitors, Elon keeps telling us that, but somehow many of us still want all the non-Tesla OEM's to fail.
That is contrary to the mission!

 

[jerry33]

Agreed. Overall good outlook for the company. But too much reliance on FSD going forward. More people need to drive an FSD vehicle to see just how far it is from even a limited level 3 system. It has changed marginally in the last 18 months and in many ways is worse. Keep developing it sure but enough with the pipe dream of it ever being any kind of level 4 or 5 system with existing hardware. This kind of thing scares investors away, or at least the ones who have ever been in an FSD car. And for gods sake please change the name. That’s just an ongoing embarrassment for the company.

Jmho

Most of my driving is road trips as I no longer have a commute. I would hate to take road trips anymore without AP or FSD. And no, it's not an embarrassment to the company. If nothing else, it generates clicks, which is better than advertising.

 

[Krugerrand]

Repeated price cuts tell a different story.

What!?

They literally are building more cars every quarter. They are literally selling more cars every quarter.

 

[Artful Dodger]

they’ve got tunnel vision and missed the forest for the trees.

Trees: GM, IRA credits, ASP, FX etc… Forest: Business as Usual

Badassery in the talons of a raptor.

Never doubt, Never surrender.

Cheers!

 

[Nocturnal]

I bet you if Tesla cuts prices enough all of those “never Tesla” will jump on a Tesla. “Never” should not be literally interpreted.

Sure would have been nice if they hadn't been turned off to that level to begin with though.

 

[2daMoon]

Here is my main issue with the "FSD is more important than anything else" line of thinking:

Yes I do believe FSD will be revolutionary, eventually, BUT I also think it will take a long, LONG time to play out even after the point where FSD reaches Level 5. Once FSD is solved I do not think we are going to see an immediate massive inflow of revenues to Tesla.

Currently FSD costs $15,000 to buy, it will likely cost more once it is Level 5. How many normal everyday people will be willing to pay that price for software when it only does something they can do themselves and already do every day (driving)? I know the argument is "people will pay it happily" but my hunch is they won't because it's just too expensive for a luxury they don't need. I know I have no intention of paying $15K+ for it, I'm completely happy with standard Autopilot on my Model Y. Sure some people will buy it, but Elon's constant statement that "FSD will be the largest value increase in history" feels overly optimistic to me.

FSD being solved probably won't be a "switch throw" for immediate revenues nor an immediate increase to TSLA. A few Tesla owners will pay the huge price tag, some taxi style companies will grow around it and deploy robotaxi services, and Tesla themselves will most likely build their own robotaxi fleet. But that will take time, a lot of time, to set up, build, and deploy.

What if very few people buy it? What if few people want to use robotaxis? What if FSD never gets solved? What if someone else like OpenAI somehow incredulously gets there first? There is so much uncertainty to this prophetic forecast for the future of Tesla and TSLA that relying on it to bring value to the company and stock worries me.

In the meantime Tesla needs to survive and be world leading without FSD, and while I am confident it will, here on TMC we are all concerned about our shares of TSLA. And I'm pretty sure we would all rather our TSLA went up instead of sideways or even down. Whenever I hear Elon (or anyone) claim FSD is our Ace in the Hole to get margins back up again I shudder, because that is both an extremely long term and uncertain outlook.

You may be looking at it wrong. Take a moment to speculate what the percentage of people driving is who really don't want to be driving at all. At least some of the time, if not all of it. These "drivers" are also the ones who are responsible for the lion's share of collisions due to being distracted, inattentive, or otherwise letting more mundane aspects of their lives take precedence over maintaining control of a multi-thousand pound missile in a very dangerous environment.

Elon's perspective is that these people won't have to make the choice of whether or not to add FSD to their Tesla purchase, rather, a significant number of people will be making the choice to not buy a car at all and put the Robotaxi app on their phone to summon a driverless car whenever they want one.

The number of cars sold to companies owning Robotaxi fleets is the point here. One hundred percent of those cars will include an FSD purchase.

 

[Webeevdrivers]

Most of my driving is road trips as I no longer have a commute. I would hate to take road trips anymore without AP or FSD. And no, it's not an embarrassment to the company. If nothing else, it generates clicks, which is better than advertising.

Yah we use it all the time. And in the city as well. Very cool. But no where near any kind of self driving level. Get rid of the “full self driving” name and just call the whole thing “autopilot”. FSD is an embarrassment at the first intervention which doesn’t take long in the city.

Jmho.

 

[Unpilot]

Yah we use it all the time. And in the city as well. Very cool. But no where near any kind of self driving level. Get rid of the “full self driving” name and just call the whole thing “autopilot”. FSD is an embarrassment at the first intervention which doesn’t take long in the city.

Jmho.

You have shared your Jmho......many many many many many many many many times.

It has gotten old and stale......Jmho.