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

[MC3OZ]

For anyone considering buying a new ICE in 2030 there are several alternatives:-

1. Buy an new EV
2. Buy a used EV
3. Buy a new ICE
4. Keep the old ICE going a few years longer.
5. use a Robo-taxi

I would anticipate 4. & 5. would be attractive strategies because a major expenditure is deferred, whiel EVs keep getting better cheaper and more abundant.

If we take the current worldwide car market as 80 Million I see new ICE sales as 20% or 16 Million

Tesla 20 Million EVs, China 20 Million EVs, others 15 Million EVs (this part is a stretch)


By my projections 2.-5, totals 10 Million .

 

[Nocturnal]

It directly Tesla related but further supports the thesis around the pandemic. More evidence that covid is accelerating existing trends, in this case online shopping. Do you know of any companies that operate in EVs, autonomy, and power decentralization btw?

Black Friday shopping in stores craters 52% during pandemic as e-commerce sales surge

ESPN headline:
Santa Clara County issued an enhanced COVID-19 guidelines for professional, collegiate and youth sports on Saturday afternoon that effectively puts a three-week ban on any contact sports taking place in the county.

Sigh...

Tesla is correctly labeled an essential business now. We won’t have that issue again.

 

[FrankSG]

@Everyone
@Artful Dodger @FrankSG @StealthP3D
1. Is there a case for Tesla to not let TSLA from going too far? If yes, at what SP do you think Tesla should start getting concerned about too high a rise in SP. One reason perhaps is not letting big swings in SP impact employee morale.
2. Do you think a SP equilibrium gets reached without special steps happening, like the company having to issue new shares as a step to stop front runners from totally driving the SP to "unhealthy" levels, level where a huge drop is likely?
3. Do you think Tesla very likely raises more capital at $700 or $800?
4. What surprises are plausible from S&P that could lead to a drop in the SP. Is spreading the weightage across several quarters likely?

1. I think that's very unlikely. For the most part, a higher stock price is better for a company than a lower one. A more stable stock price is also preferred in most cases, but it's not like Tesla can make TSLA less volatile.

2. An equilibrium will be reached one way or another, be it at $600, $800, or some number in excess of $1,000. Considering the magnitude of buying that will have to be done, I'm not sure how big of a drop, if any, there will be. It's certainly possible, but I would be shocked if not a permanent effect remains from inclusion, and my personal guess is that we're likely to stay at $600+.

3. I think it's somewhat unlikely. They already have $15B in cash, plenty cash flows, more cash flows in the near future, and I don't think cash is Tesla's limiting factor. However, it is possible, but I don't see any scenario in which Tesla does a cap raise large enough to be more than a drop in the bucket in the face of S&P inclusion.

4. I think it's most likely that the S&P will not go back on their original announcement, and will include TSLA fully by Dec 21st. The only question is whether it will be in 1 or 2 (or maybe even 3?) tranches. Nothing is impossible, but it seems unlikely.

 

[⚡️ELECTROMAN⚡️]

It means the logistics and distribution part of the sale is performing well. That's the actual business, as opposed to how the SP is performing.

Cheers!

Are you sure it's not a sign of low demand? @Krugerrand. Oh no! That rhymes.

 

[JRP3]

I can see that from a robin hood investor mindset. Or a day trader. But NOT the big guys.

The big guys have never been adept at understanding the value of Tesla's presentations. That's one of the reasons we've been able to accumulate cheap shares over the years.

 

[Nocturnal]

Late night musing that I’ll blame on the bourbon (unless it’s a good musing). Consider this:

Robotaxi fleets will need access to parking lots with charging and repair/service infrastructure. These locations need to have great access to highways near major population centers, but a little out to minimize property and tax costs.

Car dealers are going to be failing as we transition. Car dealers have large parking lots with access to service/repair facilities, located close to major highways but not in urban areas.

The symmetry of this is worthy of the simulation we live in.

 

[Paul_SF]

OT, but there were some opinions here about Apple. And it actually pertains to Tesla also, as a disruptive company.

 

[UnknownSoldier]

OT, but there were some opinions here about Apple. And it actually pertains to Tesla also, as a disruptive company.

I ordered a new M1 MacBook Air from Costco today, clearly I am part of the problem.

 

[mickle]

This guy has an interesting video on how much fund stock buying there will be related to Tesla S&P inclusion. he thinks there will be about 5.5 million shares bought every day since the announcement, for 42 days (until mid January).

 

[Singuy]

1. I think that's very unlikely. For the most part, a higher stock price is better for a company than a lower one. A more stable stock price is also preferred in most cases, but it's not like Tesla can make TSLA less volatile.

2. An equilibrium will be reached one way or another, be it at $600, $800, or some number in excess of $1,000. Considering the magnitude of buying that will have to be done, I'm not sure how big of a drop, if any, there will be. It's certainly possible, but I would be shocked if not a permanent effect remains from inclusion, and my personal guess is that we're likely to stay at $600+.

3. I think it's somewhat unlikely. They already have $15B in cash, plenty cash flows, more cash flows in the near future, and I don't think cash is Tesla's limiting factor. However, it is possible, but I don't see any scenario in which Tesla does a cap raise large enough to be more than a drop in the bucket in the face of S&P inclusion.

4. I think it's most likely that the S&P will not go back on their original announcement, and will include TSLA fully by Dec 21st. The only question is whether it will be in 1 or 2 (or maybe even 3?) tranches. Nothing is impossible, but it seems unlikely.

Really depends on how unnatural TSLA sp becomes. Remember that one day Tsla started out +12% and then ended the day like -5%? Unnatural movements like those are something I will be monitoring before deciding on how likely Tsla will fall after inclusion.

 

[Singuy]

OT, but there were some opinions here about Apple. And it actually pertains to Tesla also, as a disruptive company.

I wouldn't put too much weight on all this M1 disruption. It's a little hype right now.

Apple's process node is TWO generations ahead of Intel as they are struggling with 10nm. Their 10nm is still pretty broken which led Apple to design their own. AMD's 7nm chip already surpasses Intel performance by 2x in a 15w envelope and surpasses M1 multicore by 30% but at 2x the power usage(because it's still one generation behind in process node). AMD's next generation chip on the same behind process node will by 50% faster in multicore so it's not as mind blowing as advertised, but pretty good especially compared to Intel's failure.

 

[Selenas]

Mostly agree, but there's one class of people that will resist robotaxi, and that's parents. Hauling the child seat in an out of a robotaxi is a real pain--and what do you do with it while your shopping? Robotaxi will only be a success if it's also more convenient. If it's not more convenient (say you have to wait fifteen minutes for the robotaxi to arrive--five minutes is about the maximum) just lower cost alone won't drive the numbers you are suggesting.

To really make this work Tesla owners have to be convinced to use their car as a robotaxi. That would put enough cars in the area to get within the five minute time. Certainly robotaxi will eat normal taxis and Uber type services, and people where the cost sells them (of course, these are pretty large numbers, but nowhere near 50% as the taxi and Uber are often people who don't own a car to start with).

Tesla didn't start out to make an "okay" car that happened to be electric. They set out to make a car that was better than other cars and is electric. Elon understood that in order to get people to buy their cars they had to be better, faster, sexier. I think choosing a robotaxi should not be a sacrifice, but should provide greater benefit. If you need a car seat, call for a robo taxi with the car seat. If you need to take a lot of stuff with you, rent the robotaxi for as many hours as you need it. If you need a vehicle with more seating, set that as your robotaxi criteria.
While I believe the price will be substantially less expensive, price should not be the only advantage of a robottaxi.
These are just some of my thoughts.

 

[ItsNotAboutTheMoney]

Late night musing that I’ll blame on the bourbon (unless it’s a good musing). Consider this:

Robotaxi fleets will need access to parking lots with charging and repair/service infrastructure. These locations need to have great access to highways near major population centers, but a little out to minimize property and tax costs.

Car dealers are going to be failing as we transition. Car dealers have large parking lots with access to service/repair facilities, located close to major highways but not in urban areas.

The symmetry of this is worthy of the simulation we live in.

There's plenty of emtoy parking lots. AV fleets will need lots with power, and it can be added in any commercial area.

 

[Beltsbear]

I wouldn't put too much weight on all this M1 disruption. It's a little hype right now.

Apple's process node is TWO generations ahead of Intel as they are struggling with 10nm. Their 10nm is still pretty broken which led Apple to design their own. AMD's 7nm chip already surpasses Intel performance by 2x in a 15w envelope and surpasses M1 multicore by 30% but at 2x the power usage(because it's still one generation behind in process node). AMD's next generation chip on the same behind process node will by 50% faster in multicore so it's not as mind blowing as advertised, but pretty good especially compared to Intel's failure.

Apple has a huge advantage by regularly dropping old tech and somehow forcing everyone into the new tech. A 2020 Windows computer can be cajoled into running DOS Wordperfect. That sounds great for compatibility but it has a pricetag in CPU die space and throughput. Code for Windows looks like crap. Code for the new M1 is cleaner. So even if there was no process advantage, Apple would be ahead with the near clean sheet M1. With two generations of process advantage, the M1 is a killer. It brings in the profit that Intel or AMD would normally make in house.

Tesla mirrors some of the kinds of advantages Apple has above. No huge legacy of thousands of different ICE cars to support. No legacy factories and contracts to support. And most importantly no costly dealers to support.

 

[ZsoZso]

I guess I don't see how "The competition can just snap their fingers and catch fully up to Tesla on battery output in just a few years anytime they want" is any less Magical Thinking than "The competition can just snap their fingers and catch fully up to Tesla on EVs in general in just a few years anytime they want" that we seem to all agree is untrue.

No, those two are completely different propositions.

1. The statement: "Competition is coming, because the incumbents can create Tesla-killer vehicles any time they want to" is a silly self-contradictory statement, because Tesla has cars that are significantly better than the ICE cars at the same price point. This means, if any incumbent were to create a car competitive with Tesla, that car would be -- by definition -- significantly better than their own ICE cars at the same price point, therefore it would kill their own ICE sales long before it would touch the Tesla sales.

2. On the other hand, building up Li-ion cell production is not rocket science, there are several companies doing that and there were companies doing that long before Tesla started. Tesla battery tech is better and cheaper, but nobody claimed the other 20 million EV's cells had to be competitive with the Tesla cells. They just have to exist. That is a much lower bar to pass than making a Tesla-killer EV.

Just like as of today, Tesla has somewhere around a quarter of the EV market world-wide, which means there are more other EVs than Teslas and they have battery cells in them. So assuming that Tesla only doubles its market share to 50% of EVs and does not take over 100% of the EV market is not "Magical Thinking". Those other EVs will continue to be inferior, have worse efficiency, lower range, but they will exist, just like the e-Trons, i-Paces, Bolts and Leafs exist today and there are people buying them.

The rest of the cell producers do not need to "catch up" with Tesla, they just need to scale up slower than Tesla does. Currently, the vast majority of cells are not produced by Tesla but by someone else. So it is Tesla that needs to catch up and take over, which I am sure they will, I am just not expecting everyone else to completely give up.

 

[BigPeePee]

I wouldn't put too much weight on all this M1 disruption. It's a little hype right now.

Apple's process node is TWO generations ahead of Intel as they are struggling with 10nm. Their 10nm is still pretty broken which led Apple to design their own. AMD's 7nm chip already surpasses Intel performance by 2x in a 15w envelope and surpasses M1 multicore by 30% but at 2x the power usage(because it's still one generation behind in process node). AMD's next generation chip on the same behind process node will by 50% faster in multicore so it's not as mind blowing as advertised, but pretty good especially compared to Intel's failure.

Apple did not design the node. TSMC did.

I think Apple fanatics are giving way too much credit to Apple. The M1's power comes almost entirely from TSMC's 5nm process, not the "design" of the chip. Chip design doesn't really have much impact on computing performance barring any kind of bottleneck (See performance metrics of XSX and PS5 using 2 different types of 7nm CPU + GPU designs but both having very minimal differences. You can also see 14nm CPUs from Intel YoY having extremely similar performance despite different designs; small performance improvements came from slight 14nm improvements "Tock cycle" rather than the design of the chip). "Chip design" is a marketing gimmick to make consumers feel special. The process node is far more important and far more complicated than the chip design.

You can 'design' a chip to specialize in certain areas like having the SoC have a bigger neural engine, but that's like me going to dominos and asking them to put in double the amount of pepperonis on their pizza. Literally anyone can do that. The 'secret sauce' is the process node, not the "design" of the chip.

 

[MXWing]

Is there any word on if we will be able to get news live regarding the S&P decision for Tesla?

 

[Singuy]

Apple has a huge advantage by regularly dropping old tech and somehow forcing everyone into the new tech. A 2020 Windows computer can be cajoled into running DOS Wordperfect. That sounds great for compatibility but it has a pricetag in CPU die space and throughput. Code for Windows looks like crap. Code for the new M1 is cleaner. So even if there was no process advantage, Apple would be ahead with the near clean sheet M1. With two generations of process advantage, the M1 is a killer. It brings in the profit that Intel or AMD would normally make in house.

Tesla mirrors some of the kinds of advantages Apple has above. No huge legacy of thousands of different ICE cars to support. No legacy factories and contracts to support. And most importantly no costly dealers to support.

There's a huge difference between software for a car and software for a computer. You can have an enclosed system for the car and that has HUGE safety benefits. The cleaner code is a matter of life and death so cross platforming dirtying the code is probably a terrible idea.

Programmers and users for general computing purposes/gaming on the other hand really doesn't care too much about a random bug crash(while you may die from a nasty random bug crash in a car). What is preferred more on the computing side is open source and wide compatibility which Apple is terrible at. This is why Andriod, being the OS that came AFTER IOS now has 80% market share vs IOS. This is with the help of multiple type of processors compatible with andriod like Exynos, Snapdragon, and Kirin.

 

[lafrisbee]

There's plenty of emtoy parking lots. AV fleets will need lots with power, and it can be added in any commercial area.

there ain't no such thing.

 

[Singuy]

Apple did not design the node. TSMC did.

I think Apple fanatics are giving way too much credit to Apple. The M1's power comes almost entirely from TSMC's 5nm process, not the "design" of the chip. Chip design doesn't really have much impact on computing performance barring any kind of bottleneck (See performance metrics of XSX and PS5 using 2 different types of 7nm CPU + GPU designs but both having very minimal differences. You can also see 14nm CPUs from Intel YoY having extremely similar performance despite different designs; small performance improvements came from slight 14nm improvements "Tock cycle" rather than the design of the chip). "Chip design" is a marketing gimmick to make consumers feel special. The process node is far more important and far more complicated than the chip design.

Apple's design giving their M1 chip a wider pipeline allowed extremely good industry leading single core performance. I will give them that. 2.5 stacking memory very close to the gpu also enabled them enough bandwidth with pretty decent graphical performance as well. These are all design choices but the 5nm node really enabled some of this to happen. They can make a bigger chip while stuffing more things inside and staying cooler.

The industry is going 3d stacking in 5nm anyways which will lead to some very profound extraordinary performance gains on the x86 side so it's too early to write them off as being disrupted.