Super Bulls Only

[Buckminster]

https://twitter.com/x/status/1536558992998092800

 

[UkNorthampton]

Shadow worker, copy worker; be an assistant filling up bins with bolts, passing over next part/fixing as a helper etc

Either is fine, staff hopefully move to supervising, improving, quality roles that are more fulfilling. Optimus might be slower or faster, can run 24 hours a day *7 if charging separately not required and maintenance low. Induction/ graze charging possibilities. Graze meaning little and often, not giant charging sessions.

Optimus, a way for humans to make money - training the bot.

Training programs are then available from a store. The Op-Store.

Within a company or specialist firms developing skills for an industry/niche - salaried with intellectual property owned by employer.

Individual/self-employed owning the intellectual property, ironing, spider-removal, dusting, picking up lego quietly while everyone sleeps (avoiding parent-lego-footstep-swear syndrome), car-detailing, pool-cleaning, gardening (many different specialisms due to variety of plants, preferences & climates), surveying for mould, termites, radon gas, pollution. Anything boring or dangerous.

 

[Buckminster]

33 mins - FSD tracking for this year.

 

[Buckminster]

 

[Buckminster]

3 month Super Bull countdown to Q3 results starts now. Or will the market catch on at shareholders day, AI day, split or P&D?

 

[Buckminster]

 

[Buckminster]

I expect $500 post split SP by 5th Oct. Twitter legal case and ER could easily be a wash.

 

[winfield100]

I expect $500 post split SP by 5th Oct. Twitter legal case and ER could easily be a wash.

yay, I can get another share at $420.69

 

[Buckminster]

Safe space for those that want to throw up when their brothers are moaning about having to pay $15k for FSD in ~two years (during which the same increase will have made them a small fortune).

 

[Buckminster]

Wow This US Tax Change is Huge
After all the consternation and moaning in the last year about the US government wanting to screw over Tesla while claiming to support sustainable energy, now that the dust has settled what we actually are left with is amazing. I'm stunned the the US government actually passed a law that's this heavily in favor of getting off fossil fuels. I'm estimating $23 billion of impact to Tesla's profit just in the first two years.

The Inflation Reduction Act gives:

• $45/kWh subsidy to battery cell and pack manufacturers
• $7.5k refundable EV tax credit to people of most normal income levels
• 30% of total cost of residential solar + storage cost in refundable tax credit

Megapack
Tesla says the Lathrop, California plant is going to produce 40 GWh. Let's assume Tesla isn't sandbagging like they are with Shanghai's ">750k" number.

$45 / kWh = $45M / GWh --> 40 GWh gets $1.8B subsidy per year, which is $0.50/share with 3.6B shares outstanding next year.​

Semi
The Semi would get a $45k subsidy for a 1 MWh battery pack, which is 22.5% of its $200k list price.

$45M subsidy for every 1k Semis sold in USA.​

Cars
For every car Tesla sells with average battery size of 80 kWh, the subsidy is $3.6k.

If the average revenue per car is $60k by next year, that's 6% increase in gross margin for free.​

​

Tesla will sell ~1M cars in America next year, so that's $3.6B, or $1/share, straight to the bottom line.​

Direct Subsidy Total
So Tesla could get in total $1.8B + $3.6B = $5.4B or about $1.50/share in direct subsidy incentives from the US government in 2023.

Consumer $7.5k Credit
That $5.4 billion is in addition to whatever extra revenue Tesla ends up getting due to the $7.5k consumer tax credit, either from more price rises or more customers using some of the savings to buy upgrades like paint, wheels, tow hitch, FSD etc. If half of that, $3.7k, goes to Tesla as increased revenue and Tesla sells 1M cars in the US in '23, then that brings us up to $9.1B or $2.54/share estimated for the government sustainable energy incentives.

Residential Solar + Storage 30% Credit
The IRA also extends the life of the 30% tax credit for home solar, and now it includes storage such as Powerwalls too.

I have to guess more with this one because we don't have good data on this and I haven't looked much into the current state of the solar side. Tesla deployed 100 MW of solar in Q2. If that's at an average price on the order of $2/W and half of Tesla Solar was for residential instead of commercial or utility scale, then that's $100M of residential solar revenue which is about to resume getting a 30% government bonus for the customers, plus the same bonus for all Powerwall sales. As the solar business grows to a multibillion-dollar operation this incentive will partially flow back to Tesla, but it's not as significant as the battery and EV credits.

Stacking It Up
This law is very likely to stay in effect until at least the end of President Biden's 1st term, which is over in January '25. Since Tesla will sell even more in the US in '24 than in '23, that might be more like $4.00/share in benefits from the policy, for a combined total of ~$6.50/share or $23 billion of estimated value just in the first two years. This isn't counting the 30% solar benefit, which would add even more bonus.

For a sense of scale:

• Analyst average forecasts according to Marketwatch (link) are for Tesla to earn $5.81/share in '23 and $7.02 in '24.
• Tesla has earned $3.54/share total cumulative net income since turning profitable in 2019.
• The 2024 subsidy estimate is almost as much as annual US federal subsidies for the entire agriculture industry.

What If the Law Lasts Longer?
If the law persists any longer than that, then the benefit to Tesla will be enormous. In theory the IRA doesn't have these credits expire until after 2032.

Here's an idea of how crazy this could get if Tesla grows like they say they will and the law stays in place, I estimate they would garner a cumulative total of $2.2 TRILLION in subsidy impact. I seriously doubt this law will last in its current form much past 2025 or 2026 because it will get increasingly hard to justify to voters why Tesla is getting such big handouts, and the total cost will include subsidies for all the hybrids and batteries from other companies that can meet the sourcing requirements.

View attachment 848477

Spoiler: Data in copiable format

	Storage		Cars & Pickups			Semi			Total
Year	Delivered Batteries (GWh)	Subsidy Benefit ($B)	Delivered Vehicles (Millions)	Delivered Batteries (GWh)	Subsidy Benefit ($B)	Delivered Vehicles (Thousands)	Delivered Batteries (GWh)	Subsidy Benefit ($B)	Delivered Batteries (GWh)	Subsidy Benefit ($B)	Cumulative Subsidy ($B)
2023	40	$ 1.8	1	80	$ 7.3	1	1	$ 0.0	121	$ 9.1	$ 9.1
2024	60	$ 2.7	1.5	120	$ 11.0	10	10	$ 0.5	190	$ 14.1	$ 23.2
2025	90	$ 4.1	2.3	180	$ 16.4	14	14	$ 0.6	284	$ 21.1	$ 44
2026	140	$ 6	3.2	250	$ 23	20	20	$ 0.9	410	$ 30	$ 74
2027	210	$ 9	4.1	330	$ 30	25	25	$ 1.1	565	$ 41	$ 115
2028	300	$ 14	5	430	$ 39	33	33	$ 1.5	763	$ 54	$ 169
2029	500	$ 23	7	550	$ 51	40	40	$ 1.8	1090	$ 75	$ 244
2030	700	$ 32	9	700	$ 65	50	50	$ 2.3	1450	$ 99	$ 343
2031	1100	$ 50	12	900	$ 84	70	70	$ 3.2	2070	$ 137	$ 480
2032	1600	$ 72	15	1200	$ 110	100	100	$ 4.5	2900	$ 187	$ 666
Total	4700	$ 210	60	4800	$ 440	360	360	$ 20	10000	$ 666	$ 2,200

 

[Buckminster]

Big month for the super bulls:

30th Sep - AI day #2
2nd October? - P&D
19th October? - ER
21st October - TWTR trial ends
21st October - Earliest date Elon could re-buy TSLA
Oct? - Master plan part 3

Will all this be containable? Will Q4 ER be the straw that breaks the camel's back?

 

[Buckminster]

Stunning CapEx Efficiency
Tesla has spent cumulatively $12.7B on capital expenditures since Q2 2020 when Gigas Berlin and Texas began construction. There has also been investment in Shanghai and Fremont as well as other capital expenditures not related to vehicle capacity expansion, so this is an upper bound for how much the new factories cost.

Spoiler: Table 1

Q2 2020	$ 546
Q3 2020	$ 1,005
Q4 2020	$ 1,151
Q1 2021	$ 1,348
Q2 2021	$ 1,505
Q3 2021	$ 1,819
Q4 2021	$ 1,810
Q1 2022	$ 1,767
Q2 2022	$ 1,730

These initial phases of capacity in Berlin and Austin should be able to yield around 500k cars per year each, or 1M combined. Thus, we can roughly estimate that Tesla can expand production capacity for at most $12.7B / 1M cars/yr = $12.7k per car of annual capacity.

In H1 '22 Tesla earned $9.62B auto gross profit off of 565k deliveries, for a global average of $17k gross profit per car.

Neglecting time-value of money effects to keep this estimation simple, this means Tesla is getting roughly (17-12.7)/12.7 = 30% return on investment just in the first year of factory operation. In other words, the factory pays for itself within less than a year of volume production plus a 30% bonus and then every year thereafter is just gravy.

If we model the factory as lasting 10 years before needing new investment, the cashflows look something approximately like this, and the internal rate of return for the project is a whopping 92%!!

Spoiler: Table 2

Year	Cash Flow	IRR
1	-6.35	92%
2	-6.35
3	17
4	17
5	17
6	17
7	17
8	17
9	17
10	17
11	17
12	17

But wait! This was with excessively conservative estimates. Berlin and Austin definitely didn't cost $6.3B each because Tesla also spent a large portion of their CapEx budget on Shanghai, Lathrop, R&D, Berlin/Texas future production, Superchargers, and more. So let's say these factories actually cost closer to $4B each (or $8B combined) for that 1M/year capacity. Now the estimate is $8k investment per car/year.

Also, the new factories are going to earn much more than $17k per car. I think Berlin and Austin will earn closer to $25k per car on average. Now we can estimate that the factories will have paid for themselves 3x over in the first year of volume production, and shockingly the IRR is 169%.

Spoiler: Table 3

Year	Cash Flow	IRR
1	-4	169%
2	-4
3	25
4	25
5	25
6	25
7	25
8	25
9	25
10	25
11	25
12	25

169% compound annualized return on investment. WTF.

The ROI is so absurdly high I don't actually even need to model for 10 years of cashflows, because almost all of the IRR is coming from the first two years of volume production. If you could invest $1k in a security at this rate of ROI, then after 10 years you'd have $20 million. Wow.

I can't estimate this precisely, but with such an extreme result it doesn't even matter for practical purposes. I don't know of any other business in any industry that can generate returns like this, let alone with investments carrying such low risk. It's not like this is some speculative venture that we hope will work, like we might see in biotech or pharmaceuticals. This is just for building out more Model Y production facilities.

 

[ShareLofty]

21st October - Earliest date Elon could re-buy TSLA

why do people keep repeating this? He could re-buy TSLA tomorrow if he and Twitter agree to settle at a price lower than he’s currently locked into

 

[mongo]

why do people keep repeating this? He could re-buy TSLA tomorrow if he and Twitter agree to settle at a price lower than he’s currently locked into

There is data to suggest that Elon is limited to the same trading window as other employees.

 

[Buckminster]

Haven't watched yet:

 

[Buckminster]

Haven't watched this yet either:

 

[Buckminster]

Liked by Elon:

https://twitter.com/x/status/1582851087790657536

2x Aramco without Optimus.

 

[MikeC]

Pretty quiet around here these days. Here’s my super bull thesis for 2023:

Q4 deliveries 430k+ and macro recovery sets off rally to 150 for the ER. Margins on the ER are still high and guidance of 50% is reaffirmed. Inflation recedes and feds don’t hike in Feb and TSLA runs to 300 by March. No recession and cybertruck debuts to massive success and we get back to 400 by end of year.

 

[EVNow]

Pretty quiet around here these days. Here’s my super bull thesis for 2023:

Q4 deliveries 430k+ and macro recovery sets off rally to 150 for the ER. Margins on the ER are still high and guidance of 50% is reaffirmed. Inflation recedes and feds don’t hike in Feb and TSLA runs to 300 by March. No recession and cybertruck debuts to massive success and we get back to 400 by end of year.

I need it be around 340 to break-even on assigned puts

 

[MC3OZ]

Pretty quiet around here these days. Here’s my super bull thesis for 2023:

Q4 deliveries 430k+ and macro recovery sets off rally to 150 for the ER. Margins on the ER are still high and guidance of 50% is reaffirmed. Inflation recedes and feds don’t hike in Feb and TSLA runs to 300 by March. No recession and cybertruck debuts to massive success and we get back to 400 by end of year.

Everyone seems to think that a recession is likely, but US unemployment is very low.
The problem would be if a shortage of workers triggered stubborn wage inflation.

But with China getting over covid, supply chains should start to return to normal, there could be significant deflation in parts and raw materials costs.

Gas prices in Europe have returned to pre-war levels.

Overall, I don't expect a recession.

With the savings in raw materials and parts, Tesla will be able to package versions of Model 3/Y that hit the right IRA price points for customers to get the tax credit.
That is US demand mostly sorted.

No evidence so far of a demand problem in The EU.

China remains the main demand question mark, ending covid restrictions and returning to more normal business operations should help. I am also not fully convinced that the so called China demand problem is a major issue.

I certainly never expected the share price to drop as low as it did, so a quick reversal would not surprise me.

A great Q4 earnings report that exceeds market expectations, would not be a major surprise. Megapack sales could deliver that.

A fair amount of the current share price is due to negative sentiment.