Have you lost faith in Tesla?

[Drew57]

@GoldenOne - Yes, owning a Tesla can be likened to being in an abusive relationship with a seductively attractive person.

I am clearly feeble enough to find the latter more alluring (twice!) than avoiding the ongoing behaviour of the former.

 

[LincolnsDoctor]

I don't have much faith in Musk. Tesla needs leadership that can take it from being a hobby shop to a mature business without losing what makes Tesla's cars great. Could happen. Steve Jobs v1.0 -> John Sculley was a disaster, while Steve Jobs 2.0 -> Tim Cook has been a great success

 

[MashinBenzin]

Only 62% ‘No’ on a vociferously pro-Tesla forum isn’t a great result for Tesla.

 

[CWT3LR]

I don't have much faith in Musk. Tesla needs leadership that can take it from being a hobby shop to a mature business without losing what makes Tesla's cars great. Could happen. Steve Jobs v1.0 -> John Sculley was a disaster, while Steve Jobs 2.0 -> Tim Cook has been a great success

I am no expert in executive performance, management styles or what makes for great leadership. But Tim Apple has shown himself to be a superlative example of someone who proved the naysayers wrong, despite being completely different to his somewhat eccentric predecessor.

And why we should all embrace what happens next with Tesla and a new CEO, as the current one has more than run his course.

 

[CWT3LR]

Only 62% ‘No’ on a vociferously pro-Tesla forum isn’t a great result for Tesla.

The other 38% are trolls...

 

[CWT3LR]

He's a realist. He's not a hater, he's not a fanboy. I think his posts add great context and value.

I think in particular, fanboys (who have a higher chance of being an investor?) should listen to what he has to say, not as financial advise, but for some reality. I say that because I think some people have become detached and live in a Tesla bubble

Sales figures you mention?

405k just confirmed for Q4. Record quarter. But the observant people (yes, I claim to be one) look at data in a different way.

Troy Teslike is widely respected as a delivery and production analyst for Tesla globally.

If you look at the movement of order backlog throughout this year versus annual sales volume, you get a new picture outside the headline picture.

Headline: 1.3m cars sold 2022
Underlying: 1.1m cars sold (new customer orders)

So you see, with Troy's 2022 starting point of 345k cars backlog and end of Q4 backlog of 144k cars, you then realise that 1.1m people ordered a Tesla this year

Or in plain English. At start of this year, lots of deliveries were from 2021 orders due to waiting lists in various regions. These waiting lists have shrank by quite a bit which means for YOY, Tesla are entering 2023 with 200k less customer orders.

To make 2023 just FLAT, they need a 200k YOY increase in customer orders

To get to 2023 consensus of 1.8m deliveries, that means they need 700k customer order growth YOY

If you're still with me on this train of thought, then you'll know thats a YOY market penetration growth of 63% for Tesla to stay on track with Wall St consensus

And that's only YOY. When you do the maths quarter by quarter, the picture gets even more bleak. 417k new customer orders in Half 2, and that's with lots of Q4 incentives globally.

If 417k new customer orders for the most recent half turns into a run rate, you're at 835k annual. Catastrophic. There are demand leavers of course and the biggest is price via margin erosion. I've been saying this for a while now. People ignore. That's fine. But price cuts will come. Forecasting is what I do for a living. The above is just back of a napkin stuff but to quote a famous saying:

The devils in the detail....

Interesting to see financial commentary on a very similar basis, but with additional sauciness in respect of the "rather unusual" accounting policies that oftwn get overlooked.

Tesla’s Springfield Gorge trajectory

Simpsons chartism, Elon Musk edition

www.ft.com

mod comment - think the link has a paywall issue, as did the second attempt I've removed

 

[GeorgeSymonds]

I am no expert in executive performance, management styles or what makes for great leadership. But Tim Apple has shown himself to be a superlative example of someone who proved the naysayers wrong, despite being completely different to his somewhat eccentric predecessor.

And why we should all embrace what happens next with Tesla and a new CEO, as the current one has more than run his course.

The irony is the share price has tanked further since Musk was absent playing Twitter. While he owns so much. it probably doesn't make any difference who's actually doing the CEO doing as Musk will still be setting the strategy, Take FSD for example, could a new guy/girl ever come in as CEO and say "Ok, folks, FSD reality check... US level 3 is 2025, level 4 not possibkle with the current sensor suite but we've a new one coming out in 2024 with level 4 by 2030 including sorting out the regulatory issues Europe. bit behind, level 3 is 2026 but because of the regulations there and the time delays to regionalise stuff we think level 4 is at best 2032". I don't know if the the above are the realistic dates, but they're more believable and I'm pretty sure being told "this year" every year has long since been healthy.

So I think a healthy dose of reality, maybe contrition that they've got things wrong at times, and a believable roadmap and prioritisation over features would go a long way to aleviating some of the frustrations. I'm not sure which is worse, something like the windscreen wiper performance or the belief by Tesla that its actually fine. Admitting that in some conditions they suck might make us feel like we're being listened to, and to a certain extent stop the extreme Tesla supporter element trying to tell us that the 300 wipes a second rate they sometimes go at in light rain is a figment of our imagination or that their uncles brothers mate had a BMW in 1976 and that did exactly the same.

 

[CWT3LR]

Interesting to see financial commentary on a very similar basis, but with additional sauciness in respect of the "rather unusual" accounting policies that oftwn get overlooked.

Tesla’s Springfield Gorge trajectory

Simpsons chartism, Elon Musk edition

www.ft.com

mod comment - think the link has a paywall issue, as did the second attempt I've removed

Thanks, I am not a regular user of forums and how they link.

 

[pgkevet]

Nascent points that Tesa manufactured 56000 more casr than sold and much of the fleet becoming stale (amongst other reasons)

 

[S4WRXTTCS]

Yeah, but I've lost faith in all of humanity so that's not saying much.

 

[CWT3LR]

Nascent points that Tesa manufactured 56000 more casr than sold and much of the fleet becoming stale (amongst other reasons)

And lack of clarity of where the additional demand would come from to justify manufacturing capacity of 1.9m units; how inventory is now consistently exceeding orders; and even with highly optimistic forecasts for things like Tesla Energy the price per share is unlikely to exceed $250 into the medium term.

Quite sobering, especially given it is from the likes of Morgan Stanley. I think @2020M3SR might have been onto something.

 

[Vidyutyaan]

Nascent points that Tesa manufactured 56000 more casr than sold and much of the fleet becoming stale (amongst other reasons)

That number is less than two weeks of production at Q4 rates so hardly a huge inventory going stale…

The demand certainly has slacked off towards the end of the year as economic realities kick in across the world and the ‘Tesla stretch’ becomes increasingly unaffordable for most.
Tesla have been at pains to point out that raising the prices was as much to temper demand as it was to compensate for inflated commodities. With raw materials prices now in decline it follows that the car prices will also come down.

Remember when the 3 and the Y were launched? Starting prices were meant to be $35k and $39k respectively.

These were meant to be the mass market cars that got the world moving to the electric future. The business plan must have made at least some sense at those prices - Musk is many things but he knows how to run profitable companies.

As prices come down demand will pick up. For all of us who bought recently at the higher prices it will probably sting but it was a choice we made.

 

[GeorgeSymonds]

That number is less than two weeks of production at Q4 rates so hardly a huge inventory going stale…

The demand certainly has slacked off towards the end of the year as economic realities kick in across the world and the ‘Tesla stretch’ becomes increasingly unaffordable for most.
Tesla have been at pains to point out that raising the prices was as much to temper demand as it was to compensate for inflated commodities. With raw materials prices now in decline it follows that the car prices will also come down.

Remember when the 3 and the Y were launched? Starting prices were meant to be $35k and $39k respectively.

These were meant to be the mass market cars that got the world moving to the electric future. The business plan must have made at least some sense at those prices - Musk is many things but he knows how to run profitable companies.

As prices come down demand will pick up. For all of us who bought recently at the higher prices it will probably sting but it was a choice we made.

2 weeks production is a 4% annual over supply, but don’t forget this isn’t a measure of orders v production, it’s deliveries v production. Somebody posted some commentary of the order backlog shrinking considerably, ie they started 2022 with a lot more unfulfilled orders than 2023, so not only have they made 4% more cars than they delivered, they’ve shrunk the backlog considerably pointing to a much bigger difference between orders v production than deliveries v production which is the bigger worry.

As an example of this, they started 2022 with plenty of MS and MX orders in Europe, they closed the year with new inventory in some of those countries, so not only did they fulfill the long term orders, and all the 2022 orders, they had some stock left over.

 

[pgkevet]

Remember when the 3 and the Y were launched? Starting prices were meant to be $35k and $39k respectively.

What Musk says and what Musk does are different. Tesla were going to buy all the 3's back and add them to their robotaxi fleet too.
Prices will only come down when he can't sell enough in the face of competition.
The majority of countries plan to phase out ICE cars by 2040, some by 2050. The EU and UK and China are the mass places with a 2035 date. ICE cars are still going to be a huge market globally for some time. There's plenty of time for the volume manufacturers to develop and compete in the EV market Tesla would need to be building another dozen gigafactories if they believed they could stay ahead.

 

[FlyingKiwi]

Since it seems relevant in this thread, Australia and New Zealand just had prices cuts on 3 and Y, both base prices, and some of the options got price reduced.

 

[Bikeman]

Since it seems relevant in this thread, Australia and New Zealand just had prices cuts on 3 and Y, both base prices, and some of the options got price reduced.

Prices will only come down when he can't sell enough in the face of competition.

Remember when the 3 and the Y were launched? Starting prices were meant to be $35k and $39k respectively.

And here we are. China. Model Y just $38,000 in U.S. Dollars now. Lower, lower, lower.

To make this post relevant to the thread, I haven't lost faith in Tesla, the company, but I lost any faith I had in Elon back when the "Pedo Guy" post was made - and he has gone south from there. Something is very seriously wrong with the guy, and it could (or, is) take Tesla down the drain with him if the BOD doesn't do something soon. He's not going to get any better at social matters, either. I have received some blowback lately after buying my Y, because of him.

 

[MashinBenzin]

2 weeks production is a 4% annual over supply, but don’t forget this isn’t a measure of orders v production, it’s deliveries v production. Somebody posted some commentary of the order backlog shrinking considerably, ie they started 2022 with a lot more unfulfilled orders than 2023, so not only have they made 4% more cars than they delivered, they’ve shrunk the backlog considerably pointing to a much bigger difference between orders v production than deliveries v production which is the bigger worry.

As an example of this, they started 2022 with plenty of MS and MX orders in Europe, they closed the year with new inventory in some of those countries, so not only did they fulfill the long term orders, and all the 2022 orders, they had some stock left over.

Plus you could argue that even 2022 orders were inflated due to Tesla being the only EV game in town. I don’t think I’d have bought one if the EV6 had been available in such short timescales and I know for sure I’d have had the Enyaq instead as I tried to place the order. But a MY was available in weeks (which turned into months). I doubt I’m the only one in the UK or Europe that bought one for this reason.

 

[GeorgeSymonds]

Remember when the 3 and the Y were launched? Starting prices were meant to be $35k and $39k respectively.

What Musk says and what Musk does are different. Tesla were going to buy all the 3's back and add them to their robotaxi fleet too.
Prices will only come down when he can't sell enough in the face of competition.
The majority of countries plan to phase out ICE cars by 2040, some by 2050. The EU and UK and China are the mass places with a 2035 date. ICE cars are still going to be a huge market globally for some time. There's plenty of time for the volume manufacturers to develop and compete in the EV market Tesla would need to be building another dozen gigafactories if they believed they could stay ahead.

In defence of the price increases, the entry level M3 RWD now has the same or better spec than the original M3 LR in some respects. It now has heated rear seats, heated steering wheel, heat pump, nearly the same working range, laminated glass, mobile charging pads. headlights etc. It's even built better. They have put prices up, but they've also improved the car.

That said, Moores law (they are a tech company not a car company I'm told ) would suggest that things should get cheaper for the same performance to balance things out.

If they still have 30% margin to play with, it's not difficult to see a 10% drop in prices if they need to. I just wonder if what we're seeing is purely economic though and whether some buyers are just put off Tesla because of the things talked about on here, rather than think they're too expensive. No doubt there's probably an element of both.

Either way, we should remember they are still growing, it's just that production seems to be growing more quickly than demand.

 

[2020M3SR]

2 weeks production is a 4% annual over supply, but don’t forget this isn’t a measure of orders v production, it’s deliveries v production. Somebody posted some commentary of the order backlog shrinking considerably, ie they started 2022 with a lot more unfulfilled orders than 2023, so not only have they made 4% more cars than they delivered, they’ve shrunk the backlog considerably pointing to a much bigger difference between orders v production than deliveries v production which is the bigger worry.

As an example of this, they started 2022 with plenty of MS and MX orders in Europe, they closed the year with new inventory in some of those countries, so not only did they fulfill the long term orders, and all the 2022 orders, they had some stock left over.

Yes, that was me. 1.3m vehicles sold in 2022 but effectively, around 200k of those were cars ordered in 2021. When you look at backlog reduction throughout 2022, you can then see that there were 1.1m customer orders in 2022. I haven't looked at the previous year in the same way, but with something like 0.9m cars sold the previous year along with a building backlog, we 'could' be in the region of 1.1m customer orders in 2021 and 1.1m customer orders in 2022. I haven't checked this though, but I doubt it will be a million miles away.

Be in no doubt, customer orders are the most accurate demand picture, rather than deliveries so the trend on that is interesting.

As UK owners/prospective buyers, its also interesting to note the price cuts in China. The MY SR price converted directly to £ is £32k. Will we see a price like this in the UK? No. VAT and import tariffs are big. 20% and 10% effectively. As I understand it, shipping costs get added to the import tariff but if they shipped to UK at China price, you are looking at £33k +10% = £36.3k ex VAT or £43.5k inc VAT. The M3 SR being cheaper again and the LR range versions being a few £k more.

With Tesla still making a profit at those prices in China, then if (and a big if) Tesla wanted to increase UK demand, the above gives an idea of how competitive they could be on price. Maybe in 2023 the fact that Berlin factory doesn't make right hand drive could help UK buyers as it seems clear that China is the most profitable factory. Could Berlin made cars make the same profit at those lower prices? I've no idea. There is no 10% import duty for cars out of that factory though but nonetheless, it will be interesting to watch any price moves in UK and EU over this year.

Maybe I'll finally get the MY I've been thinking about. I won't be buying one at over £50k though, I'll wait and see what happens with prices.

 

[TheRealWatto]

The other 38% are trolls...

I seem to have spent a lot of money just to be a troll.

Would love to see a non-celebrity CEO - apparently awaiting his Kanye moment currently. No more BS pie-in-the-sky product announcements (eg. Cybertruck, the robot thing, FSD), focus on making the cars nicer to drive, continuously improving them (instead of cutting basic features), release an actual cheaper car for the masses like they've been announcing for years, etc. The basics are there, an excellent super efficient drivetrain, there's enough hardware to make currently broken/poorly implemented/missing features actually work if they changed focus, but continue to waste effort on things that'll likely never reach usefulness in the local market on the current hardware.

You know, be a sensible car company instead of a BS factory to inflate the stock price.

Frankly I doubt I will buy another Tesla and buying one in the first place was a compromise. If the car market wasn't insane with supply chain issues and price inflation I'd have gone another brand. When I get an itching to replace the car in the next 5-10 years I suspect the market will be flooded with cheap Chinese brands that do everything just good enough - I'm sure they know they can't really compete which is why they keep talking up future tech, that in all likelihood will wind up owned by some other company down the line anyway.