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

[CorneliusXX]

...almost nobody buys $100,000+ luxury cars planning to keep driving that same car for 30 years.

Or even 10 typically.

So that's adding basically $0.00 value to most S/X buyers, other than better resale- but since they're usually lazy and just trade it it, not even that much there either.

Average length of vehicle ownership in the US is only about 6.6 years. That's all vehicles including cheap ones.

And not because ICE cars are typically dying by then... even most garbage ICE cars last quite a lot longer than 6.6 years these days, and tons of quality ones are running around after 20 years no problem.


It's kinda like the idea of a 1000 mile battery that Jim Cramer and others have mentioned- in practical terms it's not actually valuable for 99% of owners other than mentally... 1000 is so much range it entirely eliminates anyone thinking of range anxiety- no matter the fact that's not really a thing NOW either with 300-400 miles of range and 99% of the US being less than 150 miles from a supercharger.


Likewise- Almost nobody drives the same car 450k miles (current lifespan of a tesla battery), most don't even drive half that in the same car...but 1 million miles, mentally, would get folks over the hump of "worrying" about replacing their expensive car batteries during the time they are likely to own it.

I agree that for the private car owner a 1m mile battery doesn't add much value (perhaps some benefit in residual values) - but if your focus is on a robotaxi fleet then it adds tremendous value.

Not only are you saving on fuel, maintenance and driver salary costs, you're also saving on depreciation costs too. That's all the important non-revenue lines in the P&L for a robotaxi company and makes it that much harder for competitors to compete - if alternative EV's need replacing 2x as often the competing robataxi Co's will have to pass on the costs to customers.

 

[S3XY]

AudubonB didn’t forbid us from posting how much our TSLA holdings are worth, he gave an advice. A strong one. And I fully understand his wish to look out for us, for our well-being.

Personally I have no problems with people disclosing those numbers. In fact, I regularly do that myself in the ‘option wheel’ thread

I feel like most of us cannot easily be identified and the information taken advantage of (it certainly feels less exposed to crime than driving around in an expensive car or living in a fancy house). I believe it’s everyone’s own responbility to disclose how much their TSLA shares, leaps and options are worth. Just make sure you don’t share too many personal details (no, my name isn’t Fred).

Is it bragging? I’m sure that’s part of it. But who can blame people for taking some pride in taking the plunge by investing heavily in TSLA when the rest of the world told us we were reckless idiots and would lose it all. We were richly rewarded for believing in Elon’s vision and putting our financial fate in his hands. And for supporting him on his mission with our money (by buying his cars and by keeping investing in his company when the SP went down the drain). That’s something you can be proud of.

I agree about the anonymity here for the most part. I provide enough details that someone who knows me could likely figure out it's me but random online users could not. Lycanthrope provided enough details about the new house that anyone with more than just a little initiative could figure out where he (will) live(s). But I understand the desire to reveal the number of shares one owns or their option gains since we are in a TSLA investor thread. To not do that would be like being on a Corvette board and not posting pictures of yours. Also, since talking about ones worth is generally thought to be taboo doing so in anonymity online eases some of the pent up urges that you can't express in your "real life".

As to not really being named Fred. I just can no longer believe anything you post here. I am of course very S3XY.

 

[Knightshade]

Here’s the thing; people do eventually change. Some voluntarily, some by force. Trying to neatly compartmentalize what the car buying trend has been and extrapolating it for the future is a HUGE mistake. The car landscape is changing. Fast.

You’ve no idea what future luxury car buyers are going to do

Neither, of course, do you.

Using 100 years of data though seems more likely to yield a likely result than wishful thinking..

And it's not like you have give much reason behind your wishful thinking either. Or any, from what you've presented so far.


Rich Guys $100,000+ car isn't failing from too many miles on it when he gets rid of it today- he just wants the next shiny expensive thing.

So why would he change his behavior of getting rid of a car that still works perfectly because he wants a new one once EVs are "lasting much longer"?

What would be the proximate cause of changing how often he replaces a perfectly working car?

If you wish to claim a sea change in behavior- support the claim.

I agree that for the private car owner a 1m mile battery doesn't add much value (perhaps some benefit in residual values) - but if your focus is on a robotaxi fleet then it adds tremendous value.

Not only are you saving on fuel, maintenance and driver salary costs, you're also saving on depreciation costs too. That's all the important non-revenue lines in the P&L for a robotaxi company and makes it that much harder for competitors to compete - if alternative EV's need replacing 2x as often the competing robataxi Co's will have to pass on the costs to customers.

Absolutely agreed- though RTs remain fictional for Tesla at this point despite Musk having been confident they'd have been approved for use somewhere by end of this year.

Now, if those longer lasting batteries are also either:

Cheaper to make than existing ones
or
Easier to produce in much higher volumes

Then it's still a big win for Tesla even if the consumer never puts much value on the longevity at all AND RTs never happen either.


(there's also some potential value for V2G with 4000 cycle batteries too- though I think Cybertruck and Semi will get a lot more value out of that than your typical $35,000 Model 3)

 

[dl003]

...almost nobody buys $100,000+ luxury cars planning to keep driving that same car for 30 years.

Or even 10 typically.

So that's adding basically $0.00 value to most S/X buyers, other than better resale- but since they're usually lazy and just trade it it, not even that much there either.

Average length of vehicle ownership in the US is only about 6.6 years. That's all vehicles including cheap ones.

And not because ICE cars are typically dying by then... even most garbage ICE cars last quite a lot longer than 6.6 years these days, and tons of quality ones are running around after 20 years no problem.


It's kinda like the idea of a 1000 mile battery that Jim Cramer and others have mentioned- in practical terms it's not actually valuable for 99% of owners other than mentally... 1000 is so much range it entirely eliminates anyone thinking of range anxiety- no matter the fact that's not really a thing NOW either with 300-400 miles of range and 99% of the US being less than 150 miles from a supercharger.


Likewise- Almost nobody drives the same car 450k miles (current lifespan of a tesla battery), most don't even drive half that in the same car...but 1 million miles, mentally, would get folks over the hump of "worrying" about replacing their expensive car batteries during the time they are likely to own it.

I would argue the opposite for S&X. Value is not the top priority for luxury buyers. They want the best, regardless of how much or how little they will use the feature.

 

[Knightshade]

I would argue the opposite for S&X. Value is not the top priority for luxury buyers. They want the best, regardless of how much or how little they will use the feature.

...which means they'll keep replacing it every few years with the new "best" thing.

Which is what they've been doing for the entire history of cars, and nobody's presented any argument why they'll change once EV batteries last longer.

 

[gabeincal]

Two different things happen:

1. The data transfer to limit control max current supplied. At least one method uses an automotive standard since non-Tesla are successfully requesting power.
   
2. Preventing charging if the car does not have a valid Tesla account. This is where the logic error occurs. May have been intentional to let Tesla's charge now and pay later, expecting the car to track the fees.

One data point that is not considered in the above is that Tesla refuses to supercharge some of their very own vehicles due to people restoring salvages! So I think this is a deliberate attempt to open up the chargers - with heavy caveats to be disclosed later on.

 

[dl003]

...which means they'll keep replacing it every few years with the new "best" thing.

Which is what they've been doing for the entire history of cars, and nobody's presented any argument why they'll change once EV batteries last longer.

Correct me if I'm wrong, but isnt the point of contention here whether a 1 MM battery will increase the appeal of S&X? As long as they feel compelled now to buy one for the superior tech under the floor board, that will bring direct and immediate benefit to revenue. In 5 years, when they want the new best thing, will Tesla be there, as a leader still, to service their needs? I hear and agree with what you are saying, but I'm not getting how the 2 things are related.

 

[S3XY]

But are they really speeding up? Tesla us moving so fast, everyone else looks lime they’re crawling backwards to me. Oh, yeah, the others are making a lot of noise, waving their arms around a lot, but speeding up? - meh.

That is why I said the key word is 'behind'. Yeah, they're speeding up. Like the Boring Company's borers are.

 

[Jack6591]

Paying it forward, in a war of attrition.

My family has benefited from investing in TSLA. Indeed, a good and positive tale. I believe it is incumbent upon the those who have done well while doing good — to tell their best story.

Tesla is in a long war of attrition with the fossil fuel industry. Our finest tactical advantage, is to tell the truth. I hope that I’m able do so in a compelling fashion, with at least a measure of charm and grace.

Using all at that I have, I do my best to convince each new person I meet to drive my Tesla; I do my best to regale them with how my family has prospered by investing in TSLA.

When it comes to advancing Tesla’s “Master Plan” to fighting the ongoing war with the fossil fuel industry; I intend to grin and fight — to fight with a Tesla grin.

 

[ZsoZso]

Rich Guys $100,000+ car isn't failing from too many miles on it when he gets rid of it today- he just wants the next shiny expensive thing.

It is funny, how many people assume that if someone buys a $100,000+ car that automatically means the person is rich enough to repeat that every few years. Let me give you a counter example -- myself.
I bought my Model S in 2014 for $117,000 CAD (mind you, not US$, but it was closer in value in 2014).
Prior to that my most expensive car purchase was $40,000 and I used that car for 9 years until it developed major drive-train problems. Everyone in my circle (friends and family) thought (and said) I was crazy to buy such an expensive car -- it was that much out of order for me. However, I wanted a fully functional EV not just a short-range city car and Tesla Model S was the only available car that fit that bill at that time, so I stretched my means to get it.

Fast forward 6 years and I wish it had a 1000 mile range and a battery lasting a million miles and I would certainly keep it and use it until it falls apart. Unfortunately, my 6 year old S has only about 230miles of range on a good day (not in bad weather conditions) due to some degradation of range over time. In winter conditions that is under 200 mile usable practical range, which makes it not so convenient to travel longer distance. So I am thinking of trading it in for a $50K cybertruck in ~2 years when that becomes available here in Canada (we will not get first dibs as usual).

ps: if TSLA prices keeps going up, I might get the $70K version with 500mile range.

 

[Knightshade]

Correct me if I'm wrong, but isnt the point of contention here whether a 1 MM battery will increase the appeal of S&X?

Nope.

Here's the original claims to which I replied:

2. "If this new cell is made available to only Model S/X, I think they might actually reclaim the value proposition versus 3/Y as it would end up costing less over a 30-yr macrocycle because of its 100-200% greater battery longevity."

3. "It would also be insane to buy any gas car priced above $35k, as it'll bear (-) NPV after considering petrol costs, maint, depreciation, and the fact that you'd burn through 3-4 gas cars during the useful lifespan of a single Roadrunner-powered Tesla Model S."

Nobody's buying an S/X instead of a 3/Y because it's cheaper over a 30 year lifespan thanks to million mile batteries.

The % of buyers who keep a car 30 years (or even 10) is incredibly tiny. And not because they aren't still running fine after 10.

Likewise folks buying $35,000+ cars don't look at 20-30 year lifespans. The average american (who IS buying a 35k car) doesn't keep that car even 7 years on average, and again it's usually still running perfectly fine when they dump it.

 

[Knightshade]

It is funny, how many people assume that if someone buys a $100,000+ car that automatically means the person is rich enough to repeat that every few years. Let me give you a counter example -- myself.

It's fairly useless to go on personal anecdotes versus overall market-wide data when trying to discuss overall market trends.

Average new car ownership in the US is 79.3 months. Across all cars. (that # is from 2018, but it hadn't changed massively in years... if you have evidence it's suddenly changed a lot, outside the one-off weirdness of covid, I'm totally open to reading it)


Presumably rich people (who buy more expensive ones) can afford to replace them more often than average.

Of course there's exceptions and outliers, but they're not super useful for trying to discuss what'll happen in the aggregate.

 

[traxila]

I thought one of the major points of a million mile battery is that you still have an asset in the battery after the car has been run into the ground.

Most cars after half a million miles are looking pretty beat up. Although honestly, I cannot say how that will shake out with BEVs as they age.

Oh, and a million mile battery will allow you to abuse the hell out of the battery with utility arbitrage if Tesla gets on board with that and you are allowed access by the regulators. Car will suddenly be a money maker in addition to cool transportation.

 

[lafrisbee]

A million mile battery is such a gimmick. Million miles of BS.
Does it go 100 miles x 10,000 cycles? It is a MILLION MILES!
The huge bump will be 1000 miles per charge (which in real driving is around 800). And 1000 charges gives you...a MIIIIILLLLIIIOOONNNN miles. You can go "all day," or for a month before needing to charge, with the same amount of miles.
Yes "million miles" for robotaxis. But not as big a deal as you think. It is still more important to improve the miles between charges. Charging takes a robotaxi off the streets. Yes charging schedule can be figured out, but it is still much much more important than a million mile battery.
Pick one:|
A battery that can go a 1,000,000 miles but has to be charged every 300(250 really) miles.
A battery that can go 500,000 miles but can go 600 (500 really) miles per charge.

Advantages with the 500,000 mile battery.
Edit: 500,000 miles is about 15 years of driving for me...You still want that car? like they haven't made enough HARDWARE advancements that the vehicle is a dead car rolling.
Range anxiety isn't a weekly issue
Road trips become "charge at the hotel" all the time.

BUT dramatic decreases in charging times will probably be the direction that can be exploited. If you think about it though not having to charge as often holds the greatest improvement in the EV experience.

EDIT: 500,000 miles is about 15 years of driving for me. In 15 years any BEV will be a dead car rolling because Hardware improvements will make the car extremely "undesirable." 15 yr old BEV's will be jalopies.

 

[Hytra]

https://twitter.com/ReflexFunds/status/1305146782159196162

Intersting thread :
"Heat pump is in production Aug. 2020. Tesla ordered 200k/year for Car 1 starting Jan 2020, 450k/year for Car2 starting Aug 2020."

It's about supplier for giga Shangai

 

[elasalle]

Markets gonna get ready for Battery Day starting tomorrow

 

[dl003]

I think a 1 MM battery does bring some very tangible benefits:
1. As mentioned above, it's a a brand new shiny tech, fitting for the highest end models.
2. It handily defeats the FUD over battery degradation. If you ask the average car buyer, they will list it as one of the biggest obstacles keeping them from buying an EV. Is 1 MM excessive? Yes. However, human psychology loves a bit of a cushion. Even if they're only looking to get 200,300k miles out of the car, a 1 MM battery will do just fine.
3. V2G offers tremendous utility value.

 

[larmor]

https://twitter.com/ReflexFunds/status/1305146782159196162

Intersting thread :
"Heat pump is in production Aug. 2020. Tesla ordered 200k/year for Car 1 starting Jan 2020, 450k/year for Car2 starting Aug 2020."

It's about supplier for giga Shangai

Forget battery day, there should be Supplier Day...

 

[willow_hiller]

$0.24 / watt to cover all other costs and profit. That’s not a lot of margin.

After such a well written article, I'm surprised CleanTechnica made that mistake. Tesla advertises $1.49/watt as their price after the Federal Tax Credit. Before incentives, it's $2.01/watt. So after $0.75/watt on hardware and $0.50/watt on installation means that Tesla is making $0.76/watt in profit per system.

That's about 37% profit, or $3,100 in profit for their smallest 4.08 kW system which costs $8,200. And that's not even including the value of the SREC/TREC over the life of the system if the buyer chooses to sell them to Tesla for a discount on the system.

 

[LTC_RRR]

Both of you would do well to talk to an accountant, or try reading something about how taxes work. Being clueless does not lead to good investing decisions. Most of what you think you know is wrong.

As a side note, I've found that when I let tax considerations guide my investing, I end up with terrible results, saving money on taxes by making less (or no) money on my investment. Of course your results might be different.

I suspect there might also need to be a review of the difference between net worth and total assets!