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

[mikevbf]

One response from Chinese Owner. I find it interesting. Can anybody from here comment on this?

Boon
@booncooll

As a Chinese and a modelY car owner, Baidu is not a good choice. Amap is more trustworthy. Many Chinese Tesla owners need to install a mobile phone holder for their Tesla because they are not used to using Baidu Maps. Let’s use the Amap Map APP in the mobile APP. Amap Map is more accurate and easier to use than Baidu Map. But whether to use Amap or Baidu Map, ELON seems to have no choice.

Tesla is partnering with Baidu not for its interface but for its hard to get map data:

https://twitter.com/x/status/1784852339217645638

 

[sunwarriors]

That's a hard thing to justify really. If we're being really optimistic and assume a 30% take rate for FSD, average vehicle lifetime of 10 years, it means you get:

2m cars x 100$ x 12 x 10 x 0.3 = 7.2B / year in revenue. Triple the volume (a pipe dream with current factories and models) and you get only 22B in revenue. Factor in a software gross margin of 80% and that's only 16B in bottom line.

With the amount of bad drivers you see out there (there's a ton daily I see), do all those bad drivers really want a car to drive them somewhere at a slower pace following all relevant laws? I'm in your camp that I don't think the uptake (assuming one has to pay for this unlike more basic things like anti-lock breaks that every car offers), but folks here state no one would purchase another brand anymore neither.

There is talk that every other car maker will need this, but assuming Tesla's mindset is sell the razor cheap (the car), and charge for FSD to make profits, I still personally feel the uptake of consumers is much lower since poor people are struggling as it is. They don't have the $$ to fork over another $299/month for unsupervised FSD and I have doubts that a robotaxi daily is that economical for folks who need a car.

I get the wealthier segment has $$ and no issues paying for this, but think like a poor/struggling person which is higher than 50% of the population.

Does anyone have the short interest still after the last week?

 

[NicoV]

That's a hard thing to justify really. If we're being really optimistic and assume a 30% take rate for FSD, average vehicle lifetime of 10 years, it means you get:

2m cars x 100$ x 12 x 10 x 0.3 = 7.2B / year in revenue. Triple the volume (a pipe dream with current factories and models) and you get only 22B in revenue. Factor in a software gross margin of 80% and that's only 16B in bottom line.

You assume that sales will remain at 2m, that is not realistic. Sales will keep increasing, and certainly as long as Tesla is the only company offering FSD.
You assume that the monthly price will remain at 100 dollar, that is not realistic for unsupervised FSD.

 

[Usain]

That's a hard thing to justify really. If we're being really optimistic and assume a 30% take rate for FSD, average vehicle lifetime of 10 years, it means you get:

2m cars x 100$ x 12 x 10 x 0.3 = 7.2B / year in revenue. Triple the volume (a pipe dream with current factories and models) and you get only 22B in revenue. Factor in a software gross margin of 80% and that's only 16B in bottom line.

First, the take rate will eventually be well above 50% because driving manually is too dangerous. Second, as you scale up a software business, the gross margin goes above 80%. Third, the price for un-supervised FSD will be a lot higher than $100/month. Fourth, you completely left out OEM deals.

We are not talking about 2 million cars or 6 million cars. We are talking about more than 100 million cars.

 

[NicoV]

There is talk that every other car maker will need this, but assuming Tesla's mindset is sell the razor cheap (the car), and charge for FSD to make profits, I still personally feel the uptake of consumers is much lower since poor people are struggling as it is. They don't have the $$ to fork over another $299/month for unsupervised FSD and I have doubts that a robotaxi daily is that economical for folks who need a car.

I expect a subscription with a price per mile for people for which the subscription is too expensive.

 

[Artful Dodger]

A whopping 17.8 million shares of TSLA traded in the pre-market. Anyone care to guess at a rank order for that volume? Hint: volume was 500% above the 30-day average.

 

[Krugerrand]

Again, "ad hominem" for no reason other than providing an alternative viewpoint?

If the shoe doesn’t fit, don’t try and jam it on your foot. K?

Maybe you should try to calm down?

No need to project.

As I said before, I was long when the challenge was to build cars, something that people have been doing for over a century, now when autonomous cars are talked about like they're just around the corner, that I'm not so confident in. All the things that you mention as achievements are orders of magnitude simpler than doing something NO OTHER COMPANY has done and which we don't even know if it's possible or not with their current sensor stack or compute power.

Don’t believe you.

No company before Tesla ever produced just EVs. No new car company managed to not go bankrupt in a century. No car company ever invented and deployed their own fueling network worldwide. I can go on if you need me to recalibrate history for you so you know the facts.

You're free to believe that the ruler of China gives concessions to US companies in exchange for nothing.

China LITERALLY broke their own longstanding rule not to allow a foreign country to do business in their country without a JV Partner.

Do you know how many of yous pranced around this forum telling us all how China would NEVER allow Tesla to do business there without a Chinese partner?

Elon has never done a deal that was disadvantageous for Tesla. Ever. Indeed, his deals have always been very fair and equal for both parties. You suggesting in your original post that Elon suddenly gave away the farm is ridiculous.

Yeah, I scoff at all your ‘it must be this or that way’ because you said so.

At the same time as the US is trying to ban TikTok out of existence. If you need to have tea with a person to be able to judge even simple actions based on past behaviour...

Clearly you do need to have tea with the person to understand you don’t actually know the person or what they may or may not do.

 

[advocate8]

It's still unclear to me how Tesla will train FSD for the Chinese market.

In theory, advanced GPUs can not be exported to China. And, Tesla is not allowed to ship its video data from China to the US.

At some point, data and GPUs must be co-located to do the training.

There are going to be even more restrictions, and not just from the left side of the aisle. GOP types forced a power company to unhook a major array of CATL storage batteries from a US military base. Batteries that were not even connected to the internet. There is a growing worry of the Chinese acquiring data that may seem relatively innocuous. And the Chinese are worried about us doing the same. The granular level of detail FSD gathers is surely under serious scrutiny at both ends.

 

[2daMoon]

There is talk that every other car maker will need this, but assuming Tesla's mindset is sell the razor cheap (the car), and charge for FSD to make profits, I still personally feel the uptake of consumers is much lower since poor people are struggling as it is. They don't have the $$ to fork over another $299/month for unsupervised FSD and I have doubts that a robotaxi daily is that economical for folks who need a car.

I get the wealthier segment has $$ and no issues paying for this, but think like a poor/struggling person which is higher than 50% of the population.

Does anyone have the short interest still after the last week?

Those customers will be primed for TAAS, as it will offer all the benefits of FSD with a very easy to manage cost for people who wouldn't pay for the car plus FSD.

At this point it is probably a good idea to avoid basing investment decisions on this sort of strategy when the very thing being fretted over for costing too much is actually what will make using it affordable to more of those people who choose paying for the service as needed over ownership.

Oh, wait, you're not an investor.

Never mind.

 

[Usain]

I still personally feel the uptake of consumers is much lower since poor people are struggling as it is. They don't have the $$ to fork over another $299/month for unsupervised FSD

Insurance companies will offer a huge discount for miles driven on FSD. If supervised FSD stays at $100/month, a lot of customers will save enough on insurance to justify the price.

 

[Krugerrand]

Sure they can export it and make a profit. Can't sell it in China and make a profit. In the meantime they've made BYD a better company and Greely too. Now Greely is taking the very best 4680 form battery cells and packaging them into a vehicle built by gigapress's and selling those to Waymo to compete against Tesla in the RT market, likely beating Tesla in all 3 areas. So sure, teach China how FSD should be really done. Great.

Short term win, long term ..not so rosy.

‍

How is long term not so rosy? The whole point of Tesla is to help EVERYONE. There is no losing here. You of all people should understand what winning and losing looks like for this planet.

 

[sunwarriors]

Insurance companies will offer a huge discount for miles driven on FSD. If supervised FSD stays at $100/month, a lot of customers will save enough on insurance to justify the price.

I'd agree with you there since I assume if it's on unsupervised FSD mode and someone is in the back seat, the current insurer (if not Tesla) will assume liability at that point since the owner is not even driving.

 

[Krugerrand]

"They're givin' it all the got Capt'n, but the dilithium crystals are getting overheated."
- said the chief engineer to the Mind of the GSV ship, Mandatory Morning Dip​

I can be patient and wait for either my ‘Told You So’ or ‘You Missed It By That Much’ award.

 

[alexxs88]

There is talk that every other car maker will need this, but assuming Tesla's mindset is sell the razor cheap (the car), and charge for FSD to make profits, I still personally feel the uptake of consumers is much lower since poor people are struggling as it is. They don't have the $$ to fork over another $299/month for unsupervised FSD and I have doubts that a robotaxi daily is that economical for folks who need a car.

I get the wealthier segment has $$ and no issues paying for this, but think like a poor/struggling person which is higher than 50% of the population.

Does anyone have the short interest still after the last week?

In my opinion (so this assumes I could be wrong) until FSD is actually bulletproof, its take rate will be limited and there's no reason for other manufacturers to license it. I just don't see that many people desperate to pay such that they always monitor how the car drives. And even if they'd want to do it, what's the cost to add it to a legacy OEM fleet? Tesla has just a few car designs, BMW has probably over 15 body types, each with its own mounting positions for cameras. If we're talking new designs, then they'd need to integrate with BMW's suppliers for ADAS, another can of worms there. Totally worth it if it gets them level 4/5, but I don't see it being such a big seller for an L2 system, no matter how good it is.

 

[Eugene Ash]

There are going to be even more restrictions, and not just from the left side of the aisle. GOP types forced a power company to unhook a major array of CATL storage batteries from a US military base. Batteries that were not even connected to the internet. There is a growing worry of the Chinese acquiring data that may seem relatively innocuous. And the Chinese are worried about us doing the same. The granular level of detail FSD gathers is surely under serious scrutiny at both ends.

Storage needs to be connected, to react to the grid. Even if it is used as a backup generator, it is still a vulnerability vector and I would not let it anywhere near military facilities.

Tesla is partnering with Baidu not for its interface but for its hard to get map data:

https://twitter.com/x/status/1784852339217645638

I think it is a great development that moves progress further. Let me remind you how US politicians were jolted to action when US was falling behind on 5G, as China was touting progress. China _needs_ to look good and tout that "Ai, 5G expertise", they need to keep proving superiority of Communism. So their adoption of FSD is jolting bureaucrats Un EU and US into action, so be it. This is aligned with the mission

 

[Artful Dodger]

Already 57k call options traded at the $200 strike by 10:00 a.m. this will set the tone for the week.

 

[alexxs88]

No company before Tesla ever produced just EVs. No new car company managed to not go bankrupt in a century. No car company ever invented and deployed their own fueling network worldwide. I can go on if you need me to recalibrate history for you so you know the facts.

China LITERALLY broke their own longstanding rule not to allow a foreign country to do business in their country without a JV Partner.

Do you know how many of yous pranced around this forum telling us all how China would NEVER allow Tesla to do business there without a Chinese partner?

You're literally just repeating my point. The challenge to build a car company is orders of magnitude simpler than building autonomous driving on the cheapest sensor stack out of all its competitors. If you can't see that, then you're truly living in a dream world. Why else do you think they'd be >8 years over their own deadline? Because it's too easy?

Secondly, China was a win for Tesla until this year. Sales are dropping like a rock in China because of newly popped up Chinese EV companies that somehow are managing to undercut them on price while offering a more compelling product. This exactly what I meant. There's no reason to believe any concession done to Tesla now isn't to get something (better) in return.

Elon has never done a deal that was disadvantageous for Tesla. Ever. Indeed, his deals have always been very fair and equal for both parties. You suggesting in your original post that Elon suddenly gave away the farm is ridiculous.

The two points don't contradict themselves in any way. Sometimes the short term pain is too great and needs to be relieved. As I said before, Tesla's sales in China are suffering, they're priced like a growth company whose revenues and profits are shrinking. The pain is very much immediate. Giving away IP or training data (or whatever else) that might hurt them in the future is a compromise if it solves today's problem. And it's exactly what they've done with the original factory that has spurred so many competitors in an unbelievably short time.

As I say to other emotional bulls, let's agree to disagree, I don't feel the need to convince anyone of anything.

 

[2daMoon]

In my opinion (so this assumes I could be wrong) until FSD is actually bulletproof, its take rate will be limited and there's no reason for other manufacturers to license it. I just don't see that many people desperate to pay such that they always monitor how the car drives. And even if they'd want to do it, what's the cost to add it to a legacy OEM fleet? Tesla has just a few car designs, BMW has probably over 15 body types, each with its own mounting positions for cameras. If we're talking new designs, then they'd need to integrate with BMW's suppliers for ADAS, another can of worms there. Totally worth it if it gets them level 4/5, but I don't see it being such a big seller for an L2 system, no matter how good it is.

What time period are you basing this on?

Do you think it jives well with the time period the OEMs usually take to develop a new model from scratch, only this time including the licensed Tesla package for FSD?

If, let's say five years, is the average period to bring a new model from sketches to the showroom floor. How well will your statement apply?

Is your confidence level high that FSD will be L2 in five years, considering the pace of improvement of late?

"If we're talking new designs" then that is the earliest this will happen for other OEMs.

The time is now for legacy OEMs to defecate or get off the porcelain throne. Any of them who drag their feet today will be left behind tomorrow.

 

[alexxs88]

You assume that sales will remain at 2m, that is not realistic. Sales will keep increasing, and certainly as long as Tesla is the only company offering FSD.
You assume that the monthly price will remain at 100 dollar, that is not realistic for unsupervised FSD.

I literally said "triple the volume". But the take rate was incredibly low at 200$ / month, so are you genuinely trying to argue that a few tens of dollars / month will change the take rate by tens of percent? I doubt it.

First, the take rate will eventually be well above 50% because driving manually is too dangerous. Second, as you scale up a software business, the gross margin goes above 80%. Third, the price for un-supervised FSD will be a lot higher than $100/month. Fourth, you completely left out OEM deals.

We are not talking about 2 million cars or 6 million cars. We are talking about more than 100 million cars.

That is of course A MODEL. I don't think it's even remotely correct.
1. Take rate over 50%? When? Right now it's in the single digit category.
2. Gross margins above 80%? Let's be realistic. Google's gross margin is 57%, Meta's GM is 80% (and their business is huge).
3. OEM Deals are not realistic until the system gets to level 4/5. Again, take rate. Tesla will have to show amazing take rate to convince any OEM. That take rate is not there yet.

 

[SOULPEDL]

Hi people (and muppets, robots, aliens...). The price action is really gonna hurt some folks here on my _____ list.
The FUD is still so strong without much actual content. Smell something?
BULLISH