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

[insaneoctane]

U.S automakers throwing in the towel AFTER the IRA has passed? What a plot twist. At this rate they should just rename the IRA to the Tesla Tax Credit Act.

Totally agree. Tesla used the original US subsidy very efficiently while learning the hard knocks of how to scale production EVs as necessary to make a profit. Everyone else made compliance cars and just used the subsidy to be a little more profitable for a few extra quarters. Their discipline allowed Tesla the miracle of survival. Here we are again for round 2 of the US subsidies and it's as if the others haven't learned a thing. I honestly think this "delay" will actually cinch the inevitable bankruptcy. You can lead a horse to water, give them a colorful straw, add LED blinky ice cubes, and flavor it like delicious cherry cola, but...

 

[Knightshade]

Then in the Q3 2023 call, we were informed that the effective retail price of a Model Y, as measured by the monthly loan payment, has remained approximately constant, and the only difference has been that more of the payment is now going towards paying interest instead of paying down the principal. Considering that the actual cost is what matters to the customer, not the Tesla list price, this would indicate that intrinsic demand has not declined.

Pretty sure several folks have run the math on that claim, in this very thread, and it is...less than factual.

But sure let's do it yet again-

Y LR AWD was 65.9k Jan 1 of this year. When Elon said that it was 48,490 (48,990 today). That's a 25% price cut.

A 2% 60 month loan on 65.9k has a monthly of $1155.08.
An 7% 60 month loan on 48,490 has a monthly of $960.16.
(note this may vary slightly based on your state/tax/registration costs and if you can, and do, roll em into the loan- but they'd make the cheaper car look even cheaper by comparison).

And 7% is a little bit HIGHER than the 60 mo new car loan with good credit I saw checking a few major banks just now BTW.

A 5% bump in interest rate on a car loan does not REMOTELY offset a 25% cut on the opening balance.

So no, the monthly payment has not stayed the same... it's nearly $200/mo (or about 17%) cheaper today than before they started slashing prices.

 

[insaneoctane]

Lots of extra money coming to Tesla in future quarters from other OEMs whose fleet fuel economy average is going to plummet from their pullback on EVs…

Sorry, haven't you read the articles? Those ZEV credits are temporary and certainly will be drying up any moment...

 

[raffiniert]

All colors for S & X free of charge:

https://twitter.com/x/status/1717731940462170596

that is, in Tesla-terms, "old" news, if I'm correct?
I ordered my MS Plaid several weeks ago and Ultra Red (and all other colors) were already free.

 

[heltok]

There is a lot of discussion in Sweden regarding the IF Metal union starting a strike against Tesla. Tesla are ignoring the common practices in Sweden(not illegal, but against common practice in Sweden). The unions in Sweden are very influential and have not lost any fight before(they defeated Toys R US for example after a very messy fight with people standing outside the stores heckling customers etc) and are escalating the fight to ask other companies to block Tesla, for example logistics companies will stop delivering Tesla cars. Tesla have asked employees if they intend to go to work, which some argue is illegal to do in Sweden(you are not allowed to ask if they are part of a union).

Since the unions are used to getting their ways they act very surprised that Tesla are not seeing how beneficial it would be for Tesla to just obey them. Tesla have not bent to the German unions yet so we will see if Sweden will be the first country to force unions onto Tesla and if not how much the Swedish unions will escalate the fight.

This video is in Swedish but you can turn on english subtitiles:

A summary of the video:

• 00:00:00 In this section of the video, Peter Esse discusses the upcoming strike by the IF Metall union at Tesla's service center in Malmö. The strike is a result of Tesla's refusal to write collective agreements with the union. Esse explains that when a union gives notice of a strike, its members simply stop working, and if a company does not want to sign collective agreements, it is the first action taken by the union. However, in this case, Tesla has not even been involved in the bargaining process. Some people in the Tesla community believe the collective agreement is great, while others think it's awful. Regardless, collective agreements are important in the Swedish model, as they have benefited both employers and employees and have led to a record low number of conflicts in the labor market. Esse notes that when the strike happens, unfamiliar employees may be called in to replace the striking staff, but it is not legal to break a strike by replacing striking staff with others.
• 00:05:00 In this section, it is revealed that Tesla, the American electric car company, is planning to strike-break in Sweden by bringing in temporary workers to replace strikers who are on strike for better working conditions. Tesla has been accused of not having a good understanding of the Swedish labor market and not being particularly interested in acquiring the knowledge. The company has also been accused of not providing good working conditions for its employees, despite claiming to have better conditions than the average for the sector. The Union has tried to map the wages of Tesla's employees and has found that wages are not above the average for the sector. Tesla has also been accused of not having collective agreements, which reduce working hours and provide benefits to employees. This is not the first time that Tesla has been accused of poor working conditions and libertarian views. Tesla has been accused of being super-individualistic and not needing collective agreements.
• 00:10:00 In this section, the speaker discusses the negative reactions to union busting and the lack of protection for workers in companies that do not have collective agreements. The Swedish model was briefly explained, as well as the mutual respect between the parties involved and the fact that labor regulations are not as strict as in other countries. The discussion then shifted to the tactics used by unions to prevent strikebreaking, namely the use of sympathy strikes and associated blockades. The speaker went on to explain theexample of Tesla, which led to a major conflict with the United Transport Workers' Federation (IF Metall) and resulted in a change in tactics to gradually reduce the number of unionized workers and implement digitization in the picking up of Tesla cars. The trade unions then launched joint sympathy strikes against Axess Logistics and its counterparts in other ports, in an attempt to pressure the company to respect workers' rights.
• 00:15:00 In this section, we learn about a conflict between two powerful organizations, the Transport Workers' Union (IF Metall) and Tesla, over the transport of spare parts to the workshops. IF Metall is blocking the transport of spare parts, which means that Tesla's workshops cannot repair other cars except those that are Tesla's. This can escalate the conflict and lead to a sympathetic strike involving other unions, such as the Swedish Civil Servants' Union (Unionen), which can lead to the administration and payroll running. The conflict can have ripple effects in other countries, including Germany where Tesla produces its Tesla Model Y, and the US where there is a major car strike. Tesla, on the other hand, is a company that does not give up easily and will not allow lose to occur. The strategy of strikebreaking can be seen as an ugly tactic that can harm the civil services spirit of the other unions. The conflict can also increase the power struggles between the unions in Sweden, where the Swedish model is being threatened. The fight over Tesla's market share and competition is also a significant factor, as the dispute can affect future collaborations between traditional car manufacturers in Sweden and Tesla or other electric vehicle manufacturers. Overall, the conflict between the two organizations is a complex and significant issue that can have far-reaching consequences.

An article with some quotes from Tesla:

Tesla planerar för omfattande strejkbryteri

Dagens Arbete kan avslöja att Teslas Norden-chef Kim Jensen säger att han ska ta in strejkbrytare om konflikten bryter ut.

da-se.translate.goog

 

[Dikkie Dik]

that is, in Tesla-terms, "old" news, if I'm correct?
I ordered my MS Plaid several weeks ago and Ultra Red (and all other colors) were already free.

Oops my bad. Deleted the post.

 

[Christine69420]

Drone pilot "Met God in Wilderness" filming the new 4680 facility in Fremont:

(link should open at the relevant section)

 

[aubreymcfato]

I don’t understand. You’re speaking to someone that has no political reference points whatsoever. I’m interested in the individual topics, not which party a person belongs to/follows/associates themselves with. Politics and the like is never a subject I engage with others about. I’ll leave the room if even a hint comes out of someone’s mouth. Religion is another one I avoid. People lose their ever loving minds when talking about those. They go to war over them.

You are a different breed of cat, we already know that ;-)
We agree that politics and religion do divide people, and your attitude is maybe the best one: this is not to say that everybody thinks like you. People are very partisan sometimes, they pre-judge. So, we agree on the premise.

I’ve never assumed a person has made any decision based on political affiliation or leaning. Like ever. The last person who argued the validity of EVs with me, not once did I think - ‘Ah, you’re a Republican’. In hindsight, there’s a better than average chance he is, but I don’t believe it’s relevant.

My only thought after pointing at my car with over 100,000 miles on it and debunking all the bs he was repeating from media sources was, ‘Ah, you’re an ignoramus with no desire to educate yourself nor are you open to learning.’

Ok.

Should I now make a chart that correlates ignorance and intellectual laziness as a Republican thing?

That would be really fun.

For those saying EVs are political, thanks for buying the bs fed to you, for self-fulling prophecy, and continuing to divide people which only serves to add fuel to the fire.

Maybe there is a misunderstanding.
We - at least, I - don't think *it's good* to make it a political argument,
but it's right and newsworthy to state that it is. It is increasingly engaged as political argument in the presidential campaign and outside of it. Also in Italy there is increasingly an anti-EV campaign from the (right-wing) actual government.
If people (left and right) do think with prejudice we need to be aware of it. I don't think it's bs (but I agree there is the self-fulling prophecy feedback loop).

 

[cliff harris]

So no, the monthly payment has not stayed the same... it's nearly $200/mo (or about 17%) cheaper today than before they started slashing prices.

There has been a ton of inflation in stuff like food and energy recently though. So even if the car payments are cheaper, its quite likely people are $200 a month worse off in other ways. What really matters is the amount of disposable income people have, and their discretionary spending options.

If food prices double tomorrow, people all over the world will only be able to spend less on their car payments, regardless of the capital/interest cost breakdown.

Also, you have to factor in uncertainty. With interest rates changing all the time, and inflation changing all the time, its not surprising that people are a little hesitant to lock in long term payment plans for a big purchase like a car. I think inflation will be declining soon, interest rates falling soon, and thats a double bonus for us:

• Lower rates means stocks are a better option, so SP will rise
• Lower rates means Tesla can raise car prices, and better margins

 

[spacerfc]

There is a lot of discussion in Sweden regarding the IF Metal union starting a strike against Tesla. Tesla are ignoring the common practices in Sweden(not illegal, but against common practice in Sweden).

Wait a minute, there's some guy quoting a Swedish article a few days ago, claiming Tesla's ranking as attractive employer dropped in Sweden by a lot, that article blamed it on Elon's politics, and it was used as further proof of "Elon bad". Now this comes out, isn't it obvious that this conflict (regardless who's right here) is the main cause of Tesla's ranking drop, not Elon (well it's probably approved by him, but has little to do with his recent political stands)?

 

[aubreymcfato]

There is a lot of discussion in Sweden regarding the IF Metal union starting a strike against Tesla. Tesla are ignoring the common practices in Sweden(not illegal, but against common practice in Sweden). The unions in Sweden are very influential and have not lost any fight before(they defeated Toys R US for example after a very messy fight with people standing outside the stores heckling customers etc) and are escalating the fight to ask other companies to block Tesla, for example logistics companies will stop delivering Tesla cars. Tesla have asked employees if they intend to go to work, which some argue is illegal to do in Sweden(you are not allowed to ask if they are part of a union).

Since the unions are used to getting their ways they act very surprised that Tesla are not seeing how beneficial it would be for Tesla to just obey them. Tesla have not bent to the German unions yet so we will see if Sweden will be the first country to force unions onto Tesla and if not how much the Swedish unions will escalate the fight.

This video is in Swedish but you can turn on english subtitiles:

A summary of the video:

• 00:00:00 In this section of the video, Peter Esse discusses the upcoming strike by the IF Metall union at Tesla's service center in Malmö. The strike is a result of Tesla's refusal to write collective agreements with the union. Esse explains that when a union gives notice of a strike, its members simply stop working, and if a company does not want to sign collective agreements, it is the first action taken by the union. However, in this case, Tesla has not even been involved in the bargaining process. Some people in the Tesla community believe the collective agreement is great, while others think it's awful. Regardless, collective agreements are important in the Swedish model, as they have benefited both employers and employees and have led to a record low number of conflicts in the labor market. Esse notes that when the strike happens, unfamiliar employees may be called in to replace the striking staff, but it is not legal to break a strike by replacing striking staff with others.
• 00:05:00 In this section, it is revealed that Tesla, the American electric car company, is planning to strike-break in Sweden by bringing in temporary workers to replace strikers who are on strike for better working conditions. Tesla has been accused of not having a good understanding of the Swedish labor market and not being particularly interested in acquiring the knowledge. The company has also been accused of not providing good working conditions for its employees, despite claiming to have better conditions than the average for the sector. The Union has tried to map the wages of Tesla's employees and has found that wages are not above the average for the sector. Tesla has also been accused of not having collective agreements, which reduce working hours and provide benefits to employees. This is not the first time that Tesla has been accused of poor working conditions and libertarian views. Tesla has been accused of being super-individualistic and not needing collective agreements.
• 00:10:00 In this section, the speaker discusses the negative reactions to union busting and the lack of protection for workers in companies that do not have collective agreements. The Swedish model was briefly explained, as well as the mutual respect between the parties involved and the fact that labor regulations are not as strict as in other countries. The discussion then shifted to the tactics used by unions to prevent strikebreaking, namely the use of sympathy strikes and associated blockades. The speaker went on to explain theexample of Tesla, which led to a major conflict with the United Transport Workers' Federation (IF Metall) and resulted in a change in tactics to gradually reduce the number of unionized workers and implement digitization in the picking up of Tesla cars. The trade unions then launched joint sympathy strikes against Axess Logistics and its counterparts in other ports, in an attempt to pressure the company to respect workers' rights.
• 00:15:00 In this section, we learn about a conflict between two powerful organizations, the Transport Workers' Union (IF Metall) and Tesla, over the transport of spare parts to the workshops. IF Metall is blocking the transport of spare parts, which means that Tesla's workshops cannot repair other cars except those that are Tesla's. This can escalate the conflict and lead to a sympathetic strike involving other unions, such as the Swedish Civil Servants' Union (Unionen), which can lead to the administration and payroll running. The conflict can have ripple effects in other countries, including Germany where Tesla produces its Tesla Model Y, and the US where there is a major car strike. Tesla, on the other hand, is a company that does not give up easily and will not allow lose to occur. The strategy of strikebreaking can be seen as an ugly tactic that can harm the civil services spirit of the other unions. The conflict can also increase the power struggles between the unions in Sweden, where the Swedish model is being threatened. The fight over Tesla's market share and competition is also a significant factor, as the dispute can affect future collaborations between traditional car manufacturers in Sweden and Tesla or other electric vehicle manufacturers. Overall, the conflict between the two organizations is a complex and significant issue that can have far-reaching consequences.

An article with some quotes from Tesla:

Tesla planerar för omfattande strejkbryteri

Dagens Arbete kan avslöja att Teslas Norden-chef Kim Jensen säger att han ska ta in strejkbrytare om konflikten bryter ut.

da-se.translate.goog

My probably very unpopular opinion is that Tesla should cave in and give them what they want, cash or stock options (maybe the latter is better). Tesla has the cash at hand, and it's probably not worth the backlash and the headache. Tesla is Tesla because it's workforce: if they deliver, they should get what they're due.

 

[jerry33]

The tougher credit environment might be hurting demand for Tesla vehicles more than other brands.

Many Tesla customers have been stretching their budgets to afford the purchase. This has been going on for years, and it could explain why Elon has been persistently harping on the importance of affordability so much more than other automaker CEOs have been, and why Tesla has had to cut prices this year more than most other brands have. Normally, most customers buy new cars that are in approximately the same price and market segment as their previous car.

Elon stated on the Q2 2018 earnings call, "people are trading up into a Tesla, so they're choosing to spend more money on a Tesla than their current car, just based on the trade-in values." On that same call, Robin Ren said the top 5 trade-in models were:

1. Toyota Prius
2. BMW 3 Series
3. Honda Accord
4. Honda Civic
5. Nissan Leaf.

In 2019, Bloomberg published the results of a survey of 5000 Model 3 owners. One of the questions was what car they had traded in for their Model 3. (Surveys are questionably useful in general, but this was a basic factual question and the results for the top 5 exactly align with what Tesla had said a year prior.)

View attachment 985733


Then in the Q1 2021 report, Tesla again showed that the majority of trade-ins were of non-premium brands:

View attachment 985730



CarMax has observed a similar pattern. They stated earlier this year:




Full Q2 2018 earnings call commentary on trade-ins:



Then in the Q3 2023 call, we were informed that the effective retail price of a Model Y, as measured by the monthly loan payment, has remained approximately constant, and the only difference has been that more of the payment is now going towards paying interest instead of paying down the principal. Considering that the actual cost is what matters to the customer, not the Tesla list price, this would indicate that intrinsic demand has not declined.

Tesla has repeatedly told us over the years that their customers are exquisitely sensitive to price (i.e. there is high elasticity of demand), and the past market reactions to price changes have indicated this is so.

Q3 2023 call:


This all indicates that Tesla can unlock massive demand simply by progressing on cost reduction and moving into lower price tiers, especially with Gen 3.

People who drive premium brands would likely be trading for Y, X, or S rather than a 3.

 

[JusRelax]

Some Tesla updates:

Tesla has increased the price of the Model Y Long Range in the US by $500 to $48,990.
Tesla also raised price of MY Performance in China by ¥14,000 ($1,914 USD).
Tesla brought the 'Stealth Gray' color from Berlin to the US Model S/X (no cost color upgrade). It replaces the previous Midnight Gray Metallic color.

https://twitter.com/x/status/1717700663893701077

https://twitter.com/x/status/1717706796834369948

Tesla launches Stealth Grey for Model S/X

Tesla has launched a new color for the Model S and Model X, and they are calling it "Stealth Grey."

www.teslarati.com

 

[Max Plaid]

Somebody care to tweet this analysis at Gary Black and tell him his "inelasticity of demand" thesis is full of *sugar*?

Paging @Max Plaid

TIA.

Don't you pick on me!!

I don't tend to read much of what Mr Black says, only when others point me to his tweets... is he still rattling on about advertising then?

I think he's quite an asset to the Tesla/TSLA community though, gives us an insight as to how the Wall Street suits think, or not, as the case may be

I do also think that quite a few of us here hold, or held, more TSLA than his "fund", so he does make a disproportionate amount of noise/$$$

 

[elasalle]

https://twitter.com/x/status/1717736805032694169

 

[GhostSkater]

Drone pilot "Met God in Wilderness" filming the new 4680 facility in Fremont:

(link should open at the relevant section)

How did I miss they were building a new 4680 facility? Any more info on that? That is additional to Kato Rd right?

 

[jkirkwood001]

Max Pain is $212.50. Would be a nice 3% bump to finish the week!

...If only there were market 'influencers' who cared enough about hitting that target...
/S

Stock Option Max Pain

maximum-pain.com

 

[Krugerrand]

My probably very unpopular opinion is that Tesla should cave in and give them what they want, cash or stock options (maybe the latter is better). Tesla has the cash at hand, and it's probably not worth the backlash and the headache. Tesla is Tesla because it's workforce: if they deliver, they should get what they're due.

Well you know I’m going to disagree. I’m not convinced that Tesla has done anything wrong, nor that Swedish workers are being treated like slaves or however the situation is being portrayed. I’d need firsthand evidence to believe a worker, union or media outlet. I’ve also always thought if you don’t like where you work, then leave and go work some place you do like, particularly in current times when there are labor shortages all over the world.

Giving in because a union swings its aperture around a bit isn’t necessarily a smart business decision for several reasons I don’t think I need to list.

Additionally, Elon has said multiple times that Tesla will always try and do the right thing. On the other hand, if Elon believes Tesla is being treated unfairly he’ll go to the mat.

 

[Singuy]

Pretty sure several folks have run the math on that claim, in this very thread, and it is...less than factual.

But sure let's do it yet again-

Y LR AWD was 65.9k Jan 1 of this year. When Elon said that it was 48,490 (48,990 today). That's a 25% price cut.

A 2% 60 month loan on 65.9k has a monthly of $1155.08.
An 7% 60 month loan on 48,490 has a monthly of $960.16.
(note this may vary slightly based on your state/tax/registration costs and if you can, and do, roll em into the loan- but they'd make the cheaper car look even cheaper by comparison).

And 7% is a little bit HIGHER than the 60 mo new car loan with good credit I saw checking a few major banks just now BTW.

A 5% bump in interest rate on a car loan does not REMOTELY offset a 25% cut on the opening balance.

So no, the monthly payment has not stayed the same... it's nearly $200/mo (or about 17%) cheaper today than before they started slashing prices.

You should do the math again on average ASP and not peak prices. Barely anyone actually bought a Y at those prices. Tesla was busy filling backlogs at lower prices due to grandfathering, and will price match if they ever drop price prior to delivery. Due to this practice Tesla actually moved very little product at peak pricing.

 

[Gigapress]

Pretty sure several folks have run the math on that claim, in this very thread, and it is...less than factual.

But sure let's do it yet again-

Y LR AWD was 65.9k Jan 1 of this year. When Elon said that it was 48,490 (48,990 today). That's a 25% price cut.

A 2% 60 month loan on 65.9k has a monthly of $1155.08.
An 7% 60 month loan on 48,490 has a monthly of $960.16.
(note this may vary slightly based on your state/tax/registration costs and if you can, and do, roll em into the loan- but they'd make the cheaper car look even cheaper by comparison).

And 7% is a little bit HIGHER than the 60 mo new car loan with good credit I saw checking a few major banks just now BTW.

A 5% bump in interest rate on a car loan does not REMOTELY offset a 25% cut on the opening balance.

So no, the monthly payment has not stayed the same... it's nearly $200/mo (or about 17%) cheaper today than before they started slashing prices.

Overly simplistic analysis.

This depends on the precise time period of comparison, which Tesla did not specify when making those comments. Comparing the peak price to the current price is the most extreme possible point of comparison. Tesla steadily and gradually ratcheted up prices, held them high for a couple quarters, and then dropped huge discounts quickly. The current Y LR AWD prices is only $1k less than in Q1 2021, when it was $50k. It had hovered between $50 and 53k prior to that. On an inflation-adjusted basis that means it's cheaper now, but also the supply is higher and we know there's always going to be a long-term trend of increasing affordability as years pass from original early deliveries.

The details are obscure regarding exactly how and why Tesla had been managing their pricing strategy, but the price chart does not perfectly correlate with credit market changes over the same time period, which demonstrates that there have been other factors at play. These could include marketing, consumer psychology, and plethora of other possibilities, but that information is secret and we'll probably never know.

There is no reason to believe that the list price at any particular time is the equilibrium price for which incoming orders per week match production per week. Over longer time horizons, there needs to be this balance, but Tesla does not have a just-in-time delivery model. Tesla’s business model of having a backlog with lead times of a month or more means they have leeway to play with pricing without clearly visible changes to market conditions, because the actual backlog size and rate of order flow are not public information. They can raise prices above the equilibrium threshold and start shrinking the backlog, or they can reduce prices and stretch the backlog.

Source: Tesla Car Price History

Additionally, it's important to note that from mid-2021 thru mid-2022, there were a series of extremely unusual gas price hikes that apparently resulted in a large but temporary demand boost that correlates precisely, almost to the day, with the timing of Tesla price hikes and Google search interest. This strongly suggests that Tesla needed to react quickly to demand surges to keep the price at least somewhat close to equilibrium, because as they explicitly told us several times last year, the backlog was getting to be much too long. However, it appears to be mainly the spikes in prices rather than sustained high gas prices that affected demand. This makes sense from a psychological standpoint, because people notice changes but then pay less attention and care less after the new reality becomes normalized.

The relative absence of the gas price effect this year may explain part of the remaining decline in demand that can't be explained by tight credit conditions. As @cliff harris stated, the sustained high cost of gas (and I would add diesel, petrochemicals, food and everything else that inflates with higher oil prices) is reducing the amount of loan payment people can afford in the first place.

Due to vertical integration, Tesla owns their entire global sales and distribution network, along with all of the juicy data that comes with that. Also, the CEO owns one of the largest social media/advertising/consumer sentiment platforms in existence, along with all of the juicy data that comes with that. Tesla employs full-time analysts whose job is understand demand and make forecasts based on this data. They should have the right answers to this question, and I am inclined to believe that company leadership is correct in saying that affordability is the main problem at this point, and it has been severely exacerbated by the credit market and general inflation.