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

[SPadival]

I didn't say Tesla won't build new factories. I'm saying new factories might only make RT's, Megapacks, and Optimus going forward, not SX3Y or CT.

And I'm not "filling in any blanks with despair", my post earlier today was a theory I had. A THEORY, I've never once said it is a certainty or 100% what is going on, just that its a possibility given Elon's decisions and statements lately.

Dear Lord people.

Appreciate it, but you're filling in the blanks with your theory in places where there are no blanks because Tesla/Elon has already filled in the blanks

 

[Mengy]

Appreciate it, but you're filling in the blanks with your theory in places where there are no blanks because Tesla/Elon has already filled in the blanks

I guess that's where we disagree. You think the blanks are all filled in while I think there are still a lot of blanks left to fill in with information.

 

[Knightshade]

Yup. How many years do SuC need to be operating before installation costs are recouped? What usage (cars or kWh per hr) is required to meet that estimate? I'm speaking from California where until I see the actual math, feel that the initial install cost PLUS the outrageous commercial "demand charges" that seem prohibitively expensive for the peaky nature of Supercharging PLUS the outrageous $/kWh costs PLUS maintenance, etc. make me a doubting Thomas...

I literally cited Elon Musk telling you superchargers are designed to run at a 30% gross margin and 10% net profit.

Do you think he's lying?

So in 2 or 3 years when a substantial amount of BEV's fueling at an SC are other manufacturers, it makes much more sense to me for the expansion enabling it to be funded by some entity other than Tesla

Why?

As an investor in Tesla I'd think you'd want as much of the charging revenue as possible going to Tesla instead of some other entity- and it's been crystal clear for a long time the best way for that to happen is for Tesla to continue installing chargers--- they can do it much faster and much cheaper than the "competition" and reap the resulting profits from doing so on an increasingly larger scale as more and more cars from all vendors transition to EVs.

Yes, and they have now required Tesla to file their motion on June 7 before the vote. So Tesla cannot use the results of the vote in their motion and likely cannot reference it in the hearing which will be based on the filings.

To be clear- Tesla must file their response to the plaintiffs motion about fair compensation for the court case by June 7.

Further- on June 26- weeks after the vote- both parties have the opportunity to file a proposed Order and Final Judgment, either joint or disputed (almost certainly will be disputed).

This is not an appeal or an opportunity to change the decision of the court about the actual case results.

As MP3Mike points out, that comes later when (or if) Tesla files an appeal to the Delaware supreme court. An appeal that would obviously happen well after the shareholder vote.

 

[insaneoctane]

After over 11 years on this forum, I believe I have comfortably desensitized to the FUD. There is no fear. There is no greed. The manipulations don't work on me anymore. The future for Tesla is looking good.

Humanity, not so much

The relentless distractions and FUD are annoyances of course. This Banal Superfluity can be muted a bit by using ignore. There are a lot of valuable contributors and insights to be appreciated by following this forum.

If my position was solely due to my original investments many years (and splits) ago, I might share your calm demeanor. But, I subsequently pushed significantly more chips onto the table (closer to ATH) prematurely in anticipation of Tesla's encore. That's the reason I'm sensitive / anxious. Once we double and get out of this multi-year funk, I think I'll relax on my decision. I suspect having some further evidence that my conviction (NOT timing) was correct will go a long way towards bolstering my confidence.

 

[insaneoctane]

I literally cited Elon Musk telling you superchargers are designed to run at a 30% gross margin and 10% net profit.

Do you think he's lying?

No, but he did not mention the specifics that I listed. I am questioning if the timeline required for his statement to eventually become true is reasonable. I listed my specific concerns why it might take an unrealistically long time to come true.

 

[MC3OZ]

Now, is it possible the unboxed lines might also make the affordable EV's down the road? Certainly. But as of right now we have no confirmation of that.

While we don't have direct confirmation, we also don't have a direct denial.

What is different about a new factory like Mexico?

No existing lines, so probably anything Mexico builds will be unboxed, if unboxed pans out as expected.

When Tesla stated that they are intending to build up to 20 Million vehicles per year, they didn't state what percentage of them would be Robotaxis. Probably because they didn't know, and they still don't know.

But they may be now intending to build more Robotaxis than they were a year ago.

Should everything work out as planned, adding a Robotaxi to a fleet returns a lot more earnings over a 10 year period than selling the car. A Robotaxi reduces more emissions than a private car.

And Robotaxis can be sold to private/fleet owners, perhaps at higher margins than regular compact cars.

Other companies are capable of building compact low priced EVs, As an interim step Tesla is providing some lower priced EVs.

 

[2daMoon]

That is not what Elon nor Tesla said, they never used the word "interim". You are assuming that.

This is the exact statement from the Q1 2024 ER, page 10 under Products:

"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.

These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.

This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times. This would help us fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines.

Our purpose-built robotaxi product will continue to pursue a revolutionary “unboxed” manufacturing strategy."


Tesla never once said the unboxed lines would be making RT's "in the interim", we can't assume that is what they meant. They are only stating the unboxed line will be making RT's while the 3&Y lines will be making the consumer affordable EV's. This is the plan they have told us so far.

Now, is it possible the unboxed lines might also make the affordable EV's down the road? Certainly. But as of right now we have no confirmation of that.

Several have gotten different/conflicting reads from this earnings call.

It seems to me to say that they have announced a pivot toward introducing new models that can be built on the existing infrastructure, along with continued production of existing models. No mention of there being precedence over other projects, but, clear mention of accelerating the launch of these.

These cars will target a more affordable price range than existing models. Which are already getting better pricing as manufacturing costs continue to come down. It won't surprise me to see the new models priced well below 3 and Y, which have seen consistent price reduction as COGS have come down.

Robotaxi is still in development, along with the unboxed strategy. This is clear and unequivocal.

There is no reason to believe that either of these mentioned strategies (new models/RT unboxed) have been curtailed in any way, nor that they have abandoned one for the other. There are enough resources on site in Texas to get each and all of these projects going soon enough to achieve this projection of 50% growth over 2023 numbers. There is no timeline offered for when this growth will be achieved, but 2026 seems most likely. Maybe sooner if an excess of batteries can be used elsewhere, like Megapack or Semi production.

Mid to late 2025 is the stated target for start of production on the new models. Maybe they can surprise us.

We'll learn more about Robotaxi in August. With all the Chinese good luck aspects of 8/8 being bandied about, who is to say they won't announce Texas for the pilot line and Shanghai for the first production line, with Mexico for the second. Unboxed should not require as much of a footprint and may be quicker to build and ramp, with any luck.

Tesla will have teams working on every aspect of these projects and collaborating to solve for achieving these several goals simultaneously.


The future is looking bright. By then we'll be through the elections, the Fed should have begun rate reductions, and folks in the market will be feeling a little more froggy with their capital. There might be more surprises from Tesla along the way as well.

Along the lines of Mr. Market coming out of their slump, take a look at this from Sasha where he takes the AI component out of the S&P to show a less distorted view, and compares it to the Russell 2000 for context in understanding the underlying trend.

 

[2daMoon]

As for the Supercharger scuttlebutt and speculation, it occurred to me how it might be more prudent at this juncture for Tesla to steer toward building out the charger network for Semi on the major highways. The sooner this is in place the easier it will be to replace the long-haul fleet with electric. Because of the energy demands this will likely require some time to plan it out.

All accomplished while staying the course with existing expansion, but not increasing the pace, while waiting to see if other manufacturers step in to fill that need.

 

[Seattle]

Obviously this is a big thing. Has there been any communication from Tesla explaining what they are going to do beside the layoffs/firings?

And folks still defend Musk like he can do no wrong!

There can't be that many people defending him at this point. "He did great before, therefore ..x y z something.. profit" is the nicest thing you can say about his destructive, childish, angry behavior now. There was one report claiming he was cutting $10b in costs to put more money toward AI. But he's killing the obvious infrastructure that was the absolution champion of the industry (superchargers). He also stupidly refuses to let people add stalks etc back with analog sensors, things they'd pay for. FSD has how many years of work to reach equivalence with Waymo from 5 years ago? He got distracted with X, foolish culture wars, and Tesla didn't do much for 5 years, no new models, only the pointless ct.

 

[Seattle]

My 2c is that the Chinese EV companies are compressing profitability much faster than anyone is expecting and Elon is getting in in front of the coming super storm. [....]

I think Elon is getting ready for the coming price war.

That's the best non-insane summary I've seen yet to explain current actions. Except it doesn't account for firing the supercharger team - that was extremely foolish.

 

[Thekiwi]

I was outside mowing the grass this morning (on my EGO electric zero turn!) thinking about all the odd Tesla news we've seen the past few weeks, when a thought occurred to me which would be very relevant to TSLA investing IF its accurate:

What if Tesla is pivoting away hard from consumer EV development?

The plan stated by Tesla (regarding EV's) has been to grow Tesla auto production at around 50% CAGR hitting about 20,000,000 EV production in 2030. This includes vehicle and supporting functions like superchargers, insurance, etc.

But lately we've seen a lot of statements by Elon coupled with changes by Tesla which don't seem to support this plan:

- Pausing Giga Mexico and not announcing any other new Giga's, essentially pausing car production growth.
- Sidelining the $25K Tesla (and possibly redesigning it into low end 3 & Y) to instead focus on the robotaxi.
- Redistributing nearly all R&D spending away from auto growth and towards AI & autonomy.
- Laying off 10% of the company currently focused on auto production.
- Firing product development and public relations teams.
- Firing the supercharger team, a consumer EV support product (robotaxis might use a different charging infrastructure, possibly inductive).

Elon seems to be in what the Isaacson biography termed "demon mode", where Elon makes huge changes and shifts plans seemingly without regard for public optics or anyone else's opinions. Its very clear that Elon is changing Tesla's direction as of late. The plan to ramp consumer EV production to 20 million by 2030 does not seem to be on the table anymore, because at this point 20 million by 2030 is nigh impossible.

Note this probably doesn't mean Tesla will stop making consumer EV's, but what's available today might be it. Meaning the Model S, X, 3, Y, CT, and Semi, followed by some cheaper low end variants of the 3 & Y later this year by the sound of it. I think these could possibly be the only consumer EV's Tesla is planning now, and production of all combined might never exceed a couple million cars per year out of the current existing factories. So something like 3-4 million consumer EV's per year out of Fremont, Austin, Berlin, and Shanghai. New factories might be only for robotaxi / Megapack / Optimus production.

At this much slower EV production rate with minimal growth, a slower supercharging deployment schedule could be more prudent. Especially with OEM's also slowing their own EV production too. Like Elon said today, Tesla will continue to build and deploy new SC's, just at a slower pace. It doesn't sound like he's concerned about supporting 20,000,000 EV's per year by 2030 anymore.

So, why would Elon do this?

Well, in my own Tesla Excel model, I predict the company financials going all the way out to 2035. Now of course my model is wrong, nobody's model going out that far is accurate. But I do believe my model shows the trends of Tesla's businesses fairly well, and a few things stick out to me:

4) Even at 20 million EV's per year, Tesla's EV business will eventually be the smallest segment they have.
3) Tesla Energy will very likely make more money than Tesla EV's in time.
2) Tesla Robotaxis have enormous revenue potential, like several times more than EV sales, and I model it very conservatively!
1) Tesla Optimus will likely one day make more revenue than everything else Tesla does combined, and that includes RT's.

Now I believe most Tesla investors who really study the company thoroughly would agree with the rankings of Tesla's future businesses a decade from now. Sure the valuations of the sectors are subjective, but the order of their relative sizes is probably spot on.

Given that, and knowing that Elon sees this too, Maybe Elon is simply ending R&D of the smallest sector (consumer EVs) as it mostly is today? Maybe Elon has decided to move the company forward onto bigger things now instead of spending lots of time and money on a sector which relatively won't matter much ten years from now? Many people believe (I know Elon does) full fledged Robotaxis will eventually dwindle car ownership down over time anyway, is it possible Elon just doesn't want to spend any more time or money on a dwindling business? If auto ownership does decrease over time then anyone in the business of making consumer autos will be in for a world of hurt. Much like blacksmiths, or typewriter manufacturers, or film developers, or flip phone companies...


These are just Deep Thoughts I had on a very quiet tractor, none of us knows for certain, less of all myself of course. If accurate though it would explain Elon's statements and behavior as of late. And honestly it might be a great decision in the long run if this is what he's thinking.

Of course it hinges on FSD getting solved and Robotaxi services becoming a very big thing, which they aren't yet. But then Tesla could easily survive on the current EV business scaled up to around 4 million EV's per year too, so even if the bet failed Tesla would likely survive it just fine.

Anyway I thought it was an interesting theory.

Some great discussion kicked off by @Mengy here.

This is a bit of a digression, but bear with me, but it brings to mind an interesting piece I listened to recently from Horace Dediu.

Horace Dediu is a smart guy, a close collaborator of Clayton Christensen, the originator of disruption theory. Horace made a lot of people very rich from his early iPhone Apple analysis that he shared for free. More recently he coined the “MicroMobility” nomenclature and has been a leader in that field. For reference, Horace has never been a Tesla fan, and while he acknowledges the achievements of the company, he has never believed Tesla was a disruptive innovator, but instead created sustaining innovations (The difference between “Disruptive” and “Sustaining” innovations is a big part of disruption theory). I don’t agree with this, instead I think Tesla have made a mix of both disruptive and sustaining innovations.

Sustaining innovations aren’t in of themselves a bad thing, a company that creates sustaining innovations frequently is very likely to have higher margins than competitors.

But anyway recently he was on a podcast, which is hosted by someone whom a lot of people here have heard of and would highly likely agree with me is someone who has been very wrong on Tesla. But regardless of that Horace made some interesting comments:

In his opinion to be a truly disruptive company, Tesla shouldn’t be focusing on making EVs in the manner they are now (which in simple terms is making nice EVs), but instead they should actually be focusing on FSD and creating a robotaxi network. Creating robots would also be in that disruptive category.

============

I think it probably rubs a lot of people the wrong way for Tesla to be focusing on giant disruptive technology attempts like FSD & Optimus, instead of forging full steam ahead with its often repeated goals of annually producing tens of million of EVs and TeraWatts of stationary storage, to achieve its mission of transitioning the planet to a sustainable economy.

Robotaxis & Optimus do not seem to be core to the mission. Instead they are core to being huge disruptive business bets with massive returns.

I myself, and I wager many others here, would prefer Tesla to do both! Keep striving for that 20m annual EV run rate by 2030, keep building new Gigafactories & MegaPack factories globally, keep expanding Supercharger network to cover every popular route.

If Tesla cant focus on doing that as well as the new big disruptive bets, then maybe it should be two separate companies.

 

[Seattle]

[Is Tesla disruptive or sustaining innovation] ...

I myself, and I wager many others here, would prefer Tesla to do both! Keep striving for that 20m annual EV run rate by 2030, keep building new Gigafactories & MegaPack factories globally, keep expanding Supercharger network to cover every popular route.

Tesla should be doing both. IMHO: there is nothing to gain by destroying the main value creators of the company today (product teams and supercharging teams)! It won't save you much money. They aren't expanding into new factories because their sales are not growing and they have plenty of capacity. And their sales are not growing because the CEO and board didn't invest in new models and tech for their cars, they wasted the last 3-5 years.

 

[SPadival]

Tesla never once said the unboxed lines would be making RT's "in the interim", we can't assume that is what they meant. They are only stating the unboxed line will be making RT's while the 3&Y lines will be making the consumer affordable EV's. This is the plan they have told us so far.

You have reading comprehension issues or deliberately malicious. I used “interim” to refer to new models on existing assembly lines. you twisted my words - “making RT's "in the interim"

Hope this is comprehensible.

SPadival said:
You are mis-stating what Elon said. He said they will continue with the unboxed method for Robotaxis<full stop>. That is, in the interim, they will use the existing assembly lines & some next gen processes for the new vehicles (note plural) until the unbox method is production ready.

 

[Maarten]

If you are unable to find realistic how people will always gravitate to things that cost less, provide convenience, increase safety, and offer a better overall life experience, then you live in a world that is markedly different than the one I'm most familiar with.

In this world the Robotaxi offers a number of advantages. Not every advantage will appeal to every buyer, but each can influence their use decision.

Advantages of only using Robotaxi:

Private transport - no driver to deal with (attitude, odors, tipping, mass transit, etc.)​

Parking - avoids fees in some situations when away​

Repurpose of a garage, carport, and/or driveway space​

Saves money and time necessary for maintenance, repair, driving, cleaning, and such​

Safer for a wide number of vulnerable users such as aging, children, women, frequenters of drinking establishments and those who share the roads with them, etc.​

Never suffer the aggravation of driving in traffic again.​

Advantage of Robotaxi while also owning a car:

Reduced wear and tear on personal vehicle that results in lower cost of ownership and keeping the vehicle longer​

Avoid frustration of traffic, save driving duties for trips that are more pleasant experiences and use the Robotaxi for daily routines​

​

Advantages of Robotaxi replacing second car in a two-car residence:

Cuts costs of car ownership drastically once all factors are tallied up (purchase, registration, maintenance, parking, insurance, etc.)​

Frees up half of a two-car garage for other purposes​

Reduced frequency of driving in traffic insanity-inducing episodes​

Advantages of Robotaxi used for delivery of prepared food, goods, and services:

Fast food delivery​

Package delivery​

Medicine delivery​

Medical services (doctor sends staff to patient's home using a Robotaxi for many of the reasons above)​

Other services that can be brought to the home (pet care, baby sitter, personal care, etc.)​

All of which will save both the service provider and the customer time and money while offering convenience and safety​

​

Once AI autonomy is clearly viable, people will be nagging any legislator who drags their feet on making such a life-changing service available. Robotaxi use will grow at an exponential rate (limited only by production) because of the wide variety of aspects it will bring to the user.

I'm fairly certain I've only touched on a few of the advantages and potential use cases, each of which may not apply to everyone. Anyone with a smidgen of imagination should be able to easily come up with one or two more.

Nearly anyone looking at such a list will find something that will apply to them. Mostly because the bottom line will be money saved, followed by safety and convenience as the factors that make such a service a slam-dunk.

I don't consider people who are unable to see this as realistic, as being all that realistic themselves.

Edit: Regarding the @uscbucsfan disagree, below. I felt it was realistic to presume that you disagreed with the response above. That is what prompted it being written after all.

There is one other important thing that I think is in play here, that you haven’t mentioned.
Age.
What is the average age of people here in this thread?
I am from a generation of which most people value owning a car.
My guess is that the same applies for a lot of people here.

But if I consider younger people, that is not so much the case.
What I hear from my children and other young people, is that they do not put as much value on car ownership as I do.
It’s likely a pitfall to think the next generations will value car ownership over facilitated easy and cheap sustainable transport.
And that makes in my opinion the robotaxi case stronger.

 

[Matias]

You seem very unaware what this thread is for.

Hint: not for discussion of The Former Bird and not to do your research for you on a company not relevant to Tesla.

I think the cost of Uber driver is relevant for RT.

 

[Gigapress]

Tesla should be doing both. IMHO: there is nothing to gain by destroying the main value creators of the company today (product teams and supercharging teams)! It won't save you much money. They aren't expanding into new factories because their sales are not growing and they have plenty of capacity. And their sales are not growing because the CEO and board didn't invest in new models and tech for their cars, they wasted the last 3-5 years.

5 years ago they were ramping up Model Y and then Covid messed up everything. They repeatedly told investors that bringing a new model to market would have resulted in fewer total vehicles produced. This was why the Cybertruck was late.

No new tech for the existing models? Are you serious? I mean 5 years ago they were still building up the chassis structure from stamped parts.

 

[sunwarriors]

But if I consider younger people, that is not so much the case.
What I hear from my children and other young people, is that they do not put as much value on car ownership as I do.
It’s likely a pitfall to think the next generations will value car ownership over facilitated easy and cheap sustainable transport.
And that makes in my opinion the robotaxi case stronger.

Children can't drive and are driven around. Their opinions are worthless. It's not a matter of car ownership, but you simply can't get anywhere without one and getting an Uber/Robotaxi or any taxi is very costly and not really worth it long term. People have this thinking that cars are insanely expensive, but get any half reliable import/Prius used and that thing can probably run for 250k miles or more at minimal cost if one just needs it for basic transportation.


I have always disagreed with no one wanting cars as much as when folks/the media kept saying everyone was moving back to the cities and the suburbs are dead. Young people don't get cars because they simply don't need cars. Once they get older, have a family, a real job, are out of school, own a home that's not in the ghetto that all downtown tends to be, they need a car because in America, you simply can't get by without one. It's not like Europe or Asia where trains/mass transit is insanely awesome.

Sure, you can live in NY/SF downtown and get by, but that's still not all of America or most cities. Can folks seriously live in LA and not have a car in that massive urban sprawl? Pay for a RT or Uber for everything? They're not cheap and I doubt getting a RT to drive you to work everyday is going to be that cheap because there will be surge pricing from 7-9am, etc...(sorta like our crazy ToU rates).

 

[Papafox]

It looks like Chancellor McCormick of Delaware is trying to move the hearings forward in the musk compensation case to preempt the shareholder vote scheduled for June 8th:


The below dates in the Delaware case have changed

On or before May 8, 2024, Tesla will serve its expert reports.

On or before June 7, 2024, Tesla will file its answering brief to the Motion. [The judge is placing this new deadline on Tesla one day before their planned AGM and vote of shareholders]

On or before June 21, 2024, Plaintiff will file any reply brief to the Motion.

On or before June 26, 2024, the Parties will file a proposed Order and Final Judgment, either joint or disputed.

The hearing on the Motion will take place on July 8, 2024.
plainsite.org/dockets/downlo…

In other words, the Delaware judge is not interested in how shareholders vote, even after being made aware of the personal connections that she objected to in the first place. She is bound and determined to "protect" the shareholders from themselves, no matter how they vote and what they think. Ridiculously large sums of money are to be given to the attorneys, even if they don't save their "clients" a dime. Lovely.

 

[sunwarriors]

Several have gotten different/conflicting reads from this earnings call.

It seems to me to say that they have announced a pivot toward introducing new models that can be built on the existing infrastructure, along with continued production of existing models. No mention of there being precedence over other projects, but, clear mention of accelerating the launch of these.

There are conflicting reads because Elon was particular ambiguous on the call what that actually means. It's all real speculation since he didn't answer repeated analysts questions on this exact topic for clarify. They did state cost savings won't be as much so it probably won't be a totally new platform/model.

If it was going to be a new model, I don't think it's hard to say it's a new model, but maybe Elon is unsure himself or wants to surprise everyone. My guess (as well) is less features at a lower cost on the 3/Y platform. A new platform/car/infrastructure probably would've been leaked if it was that or supplies or what not would have some info.

 

[Seattle]

5 years ago they were ramping up Model Y and then Covid messed up everything. They repeatedly told investors that bringing a new model to market would have resulted in fewer total vehicles produced. This was why the Cybertruck was late.

No new tech for the existing models? Are you serious? I mean 5 years ago they were still building up the chassis structure from stamped parts.

I should have been more specific. I meant tech that would matter much to customers, things that would increase sales or encourage people to buy a new one to replace an old one. Many features came to competitors in that time frame and Tesla chose not to add them. Such as outlets in the cars, v2g type features. I think they deliberately avoided adding those features because power walls made them so much money, Musk has long not against using your car as a house battery. The steady dribble of visible new features is one thing that does encourage some customers to get a new one in other car companies, also updating the look.