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

[Musskiah]

90% of the posts I'm seeing are responses to ignored members. Haven't we fed them long enough?

I'm enjoying p'owning noobs

 

[alexxs88]

It is incredibly useful to look at profit/vehicle because it puts profitability truly in perspective. Volume won't drop by 55%, so you are just flapping your yapper.

Then why did we "read into" the prior weeks of China registrations? Then why are you trying to cherry pick one Q of operating margins rather than use TTM?

I didn't. Weekly has a lot of noise, monthly is better, especially when compared to previous year. It seems to me that a lot of you aren't able to carry on a proper conversation without resorting to ad hominem attacks. That's disappointing. Profitability is gross margin if you want. Tesla's is bang on in the pack, nothing special.

Why pick one quarter? Because as an investor, you should be interested in where this is going, not where it's been. Do you have any reasons to believe volumes and operating margins will magically increase over the next few quarters? Why?

Look, I've set a reminder for a year from now, let's see how that profitability has been holding up and how much use you were able to get out of profit/vehicle, ok?

 

[unk45]

...







Profitability / car is not a very useful metric . That's why it's mostly a sidenote and people tend to focus on overall margins.

Were we to have access to internal data we'd find that within a given Model range, (e.g. Model 3, BMW 3 series) OEM's invariably price the lowest level vehicle in a range so as to provide a net contribution to fixed costs, that the variable costs of manufacturing, distributing, selling and warranty are all covered plus some, any, contribution to fixed costs. The same OEM's have also all options, upgrades, services in higher specification models (e.g. at extreme BMW M3, Tesla Model 3 Ludicrous, more modestly, colors, trim etc). Virtually all the actual profit is provided by options and upgrades.

Hence, profitability/car at gross means close to nothing. We need internal model distribution data to make that meaningful and that, IS NOT DISCLOSED, ever by any OEM. Even internal to OEM's such data is very, very closely held. Any outsider who ever must have access is AFAIK always required to sign NDA's, which normally are preceded by security-clearance-style investigations. I don't know about everyone, but I have had to sign those twice.

 

[Musskiah]

I didn't. Weekly has a lot of noise, monthly is better, especially when compared to previous year. It seems to me that a lot of you aren't able to carry on a proper conversation without resorting to ad hominem attacks. That's disappointing. Profitability is gross margin if you want. Tesla's is bang on in the pack, nothing special.

Why pick one quarter? Because as an investor, you should be interested in where this is going, not where it's been. Do you have any reasons to believe volumes and operating margins will magically increase over the next few quarters? Why?

Alright, I'll ignore you with everyone else

 

[thx1139]

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.

The CyberTruck had no place to be built. We bought into lies about its delivery time frame. Covid did not slow down GigaTexas construction. GigaTexas broke ground August 2020.

 

[Ellec]

90% of the posts I'm seeing are responses to ignored members. Haven't we fed them long enough?

Yeah me too, please ignore the trolls people!

 

[UncaNed]

Its funny how this thread always gets super-obsessed over the latest thing, and forgets everything else going on...

Indeed, since I've been here, I'm finding this forum a more bloated, mind-numbing waste of time lately. And I have over 90 members (many long gone, but still) -on ignore.

MOD's- I'd love it if you folks would step in and risk hurting some feelings or whatever it takes.

...so you are just flapping your yapper.

@Musskiah PLEASE just:

 

[alexxs88]

If you look at the trend, Tesla is growing AI spending faster than the Big 4 AI. If they spend $10B in 2024 on AI as projected, that will be more than a doubling over 2 years. None of the Big 4 AI players can beat that.
View attachment 1043688

They can't. There's no cashflow for that. Google produces 69B in free cashflow / year, Microsoft 70B, Meta 49B, Apple 106B, while Tesla is at 4B TTM, with this year looking significantly worse.

 

[ItsNotAboutTheMoney]

Before the earnings call I had written how I hoped they would be ambiguous. They were. This is as it should be.

Analysts, for the most part, ask dumb questions. (there are exceptions) I enjoy it when they simply refuse to answer the useless questions and move on.



The quoted message included a quote taken from the earnings call in the post you replied to. The Earnings Call quote began with,

"We have updated our future vehicle line-up to accelerate the launch of new models"​

How much more clear would you need the message to be in order for you to think they said there will be new models?

"There will be new models".

The statement "We have updated our future vehicle line-up to accelerate the launch of new models" reads to me as "We were working on really fancy new stuff, but we now need to get new models out and cost reductions sooner than the really fancy new stuff could deliver, so we're going to use our current platforms and make what fancy new changes we can make quickly to _try_ _to_ deliver profitable new vehicles.

They haven't yet done what they need to do to deliver those potential, profitable new vehicles.

Beyond this, there is no need to feed your and other's curiosity until the model is ready. They have learned their lesson regarding all the FUD that is generated when they tell too much too soon. Tesla folks won't be revealing further information in advance. It is beneficial for them to tease, then provide more info as those models are nearer to production.

It's nothing to do with FUD. It's just that the sales reductions have caused Musk to change the company's direction and there's nothing to reveal.

 

[2daMoon]

I refuse to believe this little court is unaccountable to the appeals process, an essential element of the rule of law. Can anyone explain Tesla’s future recourse whatever the output from the DE court?

Particularly interested in regard to payment of attorney's fees, after these scheduling shenanigans perpetrated by this judge. There should be some mechanism in law to address a judge using their power to bias a decision by changing the court schedule to avoid key evidence preceding their ruling on fees in this way.

If the attorney fees are decided, and then can be held back from payment until the appeal is over, it won't matter.

The appeal will still follow the Annual Meeting vote, which will overwhelmingly demonstrate that what the attorneys did was not in fact on behalf of the shareholders.

There have to be business people in Delaware who are disappointed in how this judge shamed and defamed Delaware, knowing it will affect the state's long standing of being a leading state in which to incorporate.

 

[unk45]

Negative FCF was the exception, it's not the rule.
-$2.5B due to inventory in transit (which will be sold in early Q2)
-1B to AI

Seriously? You cannot dismiss it because it's not happened for some time. Nor because it is directly attributable to inventory (you do not know if it's all 'in transit') or AI. Really it does not matter exactly how it happened. That it did is a major issue. Explaining it away doesn't eliminate it. Another clue, eliminating the advertising team (an experiment that proved to be a waste), eliminating the Lithium project (no longer needed, write it off and move one) plus the other major steps.

The actions themselves show how serious the deficiencies were. There is no way to diminish them. Now our only question si how the recovery process is going.

Bluntly, I sold a while ago and avoided worse, primarily because my triggering event preceded the other evidence. The question for me is only: How soon will the resuscitation projects result in tangible progress so i can buy back in. In all probability it will be about the time the price moves to meet my original sales price.

Given TSLA structure major improvement in share price will follow provable improvement in future prospects. There is hopium now, and hints, China developments are positive, but we've not heard from the counter issues from US and EU regulators. Nor do we have good enough data on TE.

When all that happens and the path is clear, then there will be serious appreciation. I trust that Ron Baron is already convinced.

 

[Musskiah]

Indeed, since I've been here, I'm finding this forum a more bloated, mind-numbing waste of time lately. And I have over 90 members (many long gone, but still) -on ignore.

MOD's- I'd love it if you folks would step in and risk hurting some feeloings or whaever it takes.


@Musskiah PLEASE just:
View attachment 1043691

Done

 

[Zaddy Daddy]

Listen buckaroo, I don't think it's wise to argue against Tesla's (absolute) profitability on a per-vehicle basis - it is nothing short of astounding. No other EV is even in the same solar system of profitability in absolute terms. Most other gas vehicles aren't either, the exception being MB, BMW, Stellantis, and scarce sports/hypercars (which is why Ferrari isn't really a fair comparison). Tesla's profit margin per car in 2023 was $8,279, compared to $9580 in 2022, over $6000 in 2021. Let's not try to argue that these aren't fat, fat margins.

Glad to find we agree on my original point, that Elon's companies typically enjoy incredible profitability in their respective industries. Do we agree on Tesla Energy being profitable, or do we need to go to school on that one?

This is a good point. Tesla's profit per car is down a bit, but it's not terrible.

A bigger issue to loss of operating profit is large capex and opex. Operating profit is down much more due to funding battery development, AI, etc...

As an odd parallel, I was bullish on Meta 18 months ago when its share price plummeted on poor results, because I knew they were generating large gross profits but burning money on R&D projects that they could easily cut back on.

It is intriguing to think about how much $ can Tesla cut on costs with all these strategic layoffs. I don't think they can cut as willy nilly as Meta without affecting growth, but there's something there. For instance this cathode factory, how much will it save per quarter slowing that down? How much is saved on capex / opex with relieving a lot of the supercharger team?

I think @The Accountant hinted at ~ $300 million per quarter savings from the layoffs. If we included the slowing of these other projects, could we save another $200 million per quarter? This could bump EPS up $0.1 to $0.2 per quarter. Of course have to figure if future quarters will spend more or less on AI compute vs Q1.

 

[Musskiah]

Seriously? You cannot dismiss it because it's not happened for some time. Ron Baron is already convinced.

FCF is lumpy, historically. I think we need to give it another Q before calling it a "major issue."

Tesla Free Cash Flow (Quarterly) Analysis | YCharts

In depth view into Tesla Free Cash Flow (Quarterly) including historical data from 2010, charts and stats.

ycharts.com

 

[scaesare]

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.

Not only did @SPadival explain what he said by literally quoting himself, and pointing out the punctuation that validates what he meant (and I'll point out you seem to have missed or don't understand the "i.e." that he prefaced "interim" with), but you inexplicably disagree with him explaining what he meant?


I'll also note that you use the word "only" in your comment on Elon's comments in question:

Elon has now confirmed the unboxed line is 100% only for Robotaxi's

When your own quote of Elon's statement doesn't contain the word "only":

"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."

It's hard to interpret your discourse as being anything other than contentious.

 

[Krugerrand]

We really should all just ignore the obvious troll here.

‘The’ ? Singular?

 

[Artful Dodger]

Uh-huh....so? Are you going to argue Tesla isn't profitable now too?

Trolls will disargue about anything you disagree with. Their goal is word count. They get paid by the number of disagrees they get and by the number of words you write in reply to their posts, c.f. the bull*sugar* asymmetry principle (it's a thing, look it up). jus' sayin'.

If you have to reply, keep it to 1/3 the length of their opening post, and only reply once, with the headshot. Even then, it's often better to simply DNFTT (because they won't quit as long as they're getting fed).

 

[Artful Dodger]

I am confused. Negative for GAAP and non-GAAP?

View attachment 1043686

Haha, you're confused? Imagine if you have sold all your shares before the Q1 earnings call? That seems to have induced a reality distortion field...

 

[scaesare]

IMO the staff cuts were never about 10% across the board.

Elon was looking for duplicated or unnecessary functions, and under performing staff,

Not what others consider duplicated, unnecessary or under performing - his opinion.

So it is possible that the cuts to the charging team were significantly more than 10%, and that Elon had already formed an opinion on many of the staff and many of the functions.

Regardless of what actually happened, all mangers now have got the message that if their team contains 3 members that Elon considers to be under performing, they are heading for the exit. I think this is a case of "the end justifies the means", the priority is to get rid of underperforming staff, and charging was an expendable way of underlying the message.

Regardless of whether Elon is right or wrong, he is typically first.

The most recent similar example is EV price cuts, first many claimed Tesla was wrong to cut prices, then many copied, or stopped making EVs and pivoted to hybrids.

Stellantis has already laid off a lot of staff, these Tesla layoffs are the perfect excuse for any other carmaker wanting to lay off staff.

Job losses typically come before interest rate cuts, that is the way the blunt instruments work,

Lots of angst over the dismissal of the SC and Destination Charging teams, as well as some key departures.

As has been mentioned, Elon is in "Demon mode". It's one of the things I think sets him apart from most CEO's... his goals are such that he feels the need to keep his companies in "startup mode". The complacency that tends to develop with established companies is the antithesis to what he sees as critical to meeting his goals to combat existential crisis.

So, while steady progress may seem like good business, when he sees redundancy, waste, routine, etc... he's willing to wipe the slate and dig in again.

Is there risk in this? Yes.

Does it make shareholders nervous: Some, definitely.

Does he see risk in NOT doing it?: I think so.

Has it worked previously? Also, yes.


I believe it's why Tesla, after being in business for 20 years, has the nimbleness typically found in a startup, not a traditional manufacturer...

 

[scaesare]

I'm enjoying p'owning noobs

Please... let's strive for accuracy.

It's "pwned".