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

[StarFoxisDown!]

I fail to see how paying for a few staff to cover each 10 spare mile area, is "drastically more unprofitable" than the current ridesharing model of having to pay dozens/hundreds of humans to drive dozens/hundreds of taxis in that same 10 square mile area.

Yes it wouldn't be able to compete with a robotaxi service that requires no humans, but currently there is no such service that fits that description.

Sorry I updated my response....see Edit #2. Every 10 sq mile is not equal. 10 sq miles here in Seattle will require a huge team of people constantly monitoring changes and then a very huge team of remote drivers. Fundamentally, as long as Waymo requires remote drivers due to the high number of taxi's needed in service in a heavy populated area like here...it's doing nothing different than Uber. It's just moving one human role to another. And because their approach doesn't depend on FSD being situationally aware and able to adjust, it means they will always need remote drivers. Because the roles of constantly updating their maps and being a remote driver require technical knowledge, they will not be able to pay rideshare wages....definitely not here in Seattle. If they ever actually launch service in a expensive cost of living location like Seattle, they will bleed money unless they get to massive scale.

Edit: In order to not go off topic, I'll let this be my last comment on Waymo. Some people will give them a better chance than I do. I just don't see it.

 

[MC3OZ]

I don't know why people are expecting a huge difference for most consumers when model Y transitions to the new battery and manufacturing design.

The battery and manufacturing advances revealed at battery day were all about making things cheaper and easier for Tesla to manufacture, and the only major difference to consumers from a product perspective will likely be new higher range models available upon the initial launch of the new design.

A Model Y with 300 miles range using either the current batteries/chassis design or the new batteries/cahssis design is the same range regardless of what's inside. The latter just enables Tesla to make it for a lower cost. Yes that means Tesla can lower the retail price if they choose, but they already do that constantly whenever they can anyway.

I expect any additional range and performance to be software locked, and perhaps marketed later as paid upgrades.

Faster charging may also be supported but unlocked at some future time Tesla chooses.

So at the time of purchase, we are left with lower weight, better handling and better paint, anything else is speculative. It may cost money or may never happen.

It is also likely a Berlin Model Y might be a higher priced trims only for sometime, and limited in supply. Shanghai and Fremont Model Ys may be more abundant and also exist in lower price variants.

At present Europeans have little choice but to wait, but there is some talk of Model Y shipping to Europe from Shanghai.

Outside Europe no one can buy a Berlin Model Y. Americans can wait for an Austin Model Y and again higher priced trims only for sometime, and limited in supply is very likely.

A portion of Model S buyers are waiting for Plaid, some customers waiting is not unusual, but it doesn't stop cars selling, especially lower priced cars.

 

[Thekiwi]

All of the things he listed do NOT qualify anywhere close to a "refresh"....at least to me. Nothing listed is of any significance. Fred once again stretching the truth to get them clicks

- Chrome Delete
- Powered Trunk Lift
- Double Glazed windows
- redesigned centre console
- Heat Pump (maybe?) & associated range bump in certain weather/environments

Sounds worthy of a "refresh" description.

 

[Tim S]

I'm not sure if I buy it or not, but there is data to back it up...

https://twitter.com/truth_tesla/status/1314322466446209031

The record early Tesla earnings date is a bullish signal. Researchers at the University of Texas and MIT found that earlier than expected earnings dates often signal better than expected earnings.

I hope it's bullish and I expect good earnings, but it's only one day earlier than last quarter.

 

[kengchang]

I'm not sure if I buy it or not, but there is data to back it up...

https://twitter.com/truth_tesla/status/1314322466446209031

The record early Tesla earnings date is a bullish signal. Researchers at the University of Texas and MIT found that earlier than expected earnings dates often signal better than expected earnings.

2019 Q1 ER was earlier than before too and we all know how that went....

 

[OrthoSurg]

Chamath on Tesla being essentially mainly a energy utility competitor and how they are deregulating energy production.

Tom Nash using DCF model following the Tesla bears theory to show that the current valuation of only the Tesla auto sector is rightly evaluated with today’s valuation.

this is showing that with a bear analysis, the stock price today is the correct valuation according to the future profits of 2025, even being conservative with only 15% growth in the last 2 years. If the sales keep growing exponentially and Chamath is right, we are talking about a valuation much higher in 2025 and simply out of the ballpark by 2030.

To anyone planning to hold their shares till 2030, I recommend to start looking right now for islands for sale on realtor because we will all be buying them in 2030 with our TSLA stock.

 

[SPadival]

Just keeping track of confirmations from Elon

Disclaimer: This is just my humble opinion

* The first 4680 cells from the Kato road line will go to the Semi (100% confidence)
* Then any remaining capacity will go to Cybertruck & Plaid Model S (50/50 confidence)
* Berlin Model Y gets its own line in late 2021
* Fremont X,3,Y & Austin Y continue to get Giga 1 Pana 2170 cells until Tesla ramps up. Probably in 2022. My Twitter friend Louis tells me Pana contract expires in June 2023 - partial
* Standard Range+ Model 3 and Ys in EU, China, Hong Kong, Australia & China will be CATL supplied Lithium Iron Phosphate prismatic cells until such time Tesla can make their own (and have enough for $25k small car). - partial with China model 3. waiting for other countries

If Pana were to use Tesla Battery day tech, they will have to make additional investments plus write down the value of their 18650 lines in Giga 1, one of which was commissioned only recently

 

[bkp_duke]

Just keeping track of confirmations from Elon

Just a point of clarification - I am unaware of any 18650 lines in GF1.

Someone correct me if I am wrong, but my understanding is that Tesla has always imported the 18650 cells for the S/X, and GF1 production has exclusively been 2170 cells.

 

[kengchang]

Just a point of clarification - I am unaware of any 18650 lines in GF1.

Someone correct me if I am wrong, but my understanding is that Tesla has always imported the 18650 cells for the S/X, and GF1 production has exclusively been 2170 cells.

Yes, you are correct on the 18650

 

[kbM3]

Chamath on Tesla being essentially mainly a energy utility competitor and how they are deregulating energy production.

Tom Nash using DCF model following the Tesla bears theory to show that the current valuation of only the Tesla auto sector is rightly evaluated with today’s valuation.

this is showing that with a bear analysis, the stock price today is the correct valuation according to the future profits of 2025, even being conservative with only 15% growth in the last 2 years. If the sales keep growing exponentially and Chamath is right, we are talking about a valuation much higher in 2025 and simply out of the ballpark by 2030.

To anyone planning to hold their shares till 2030, I recommend to start looking right now for islands for sale on realtor because we will all be buying them in 2030 with our TSLA stock.

I didn’t get Tom’s DCF Model. To me the numbers don’t add up. Did he just leave off all future years? What discount rate was used?

I thought a DCF was the present value of all future cash flows discounted back to the present at a given discount rate?

In response to a similar question in the comment section, he replied he was using profit multipliers. Is he conflating P/E ratios with DCF, or am I confused?

 

[Paul_SF]

Now we are getting crazy...

https://twitter.com/wholemarsblog/status/1314353435790045184?s=21

/s

 

[Artful Dodger]

After-action Report: Thu, Oct 08, 2020: (Full-Day's Trading)

Headline: "MMs put the Fizzle in Pop"

Traded: $17,479,476,477.97 ($17.48B)
Volume: 40,432,132
VWAP: $432.32

Close: $425.92 / VWAP: 98.50%
TSLA closed BELOW today's Avg SP

Mkt Cap: TSLA / TM = $396.876B / $186.07B = 213.29%​

TSLA 1-mth Moving Avg Market Cap: $388.68
TSLA 6-mth Moving Avg Market Cap: $255.65
Nota Bene: 4th tranche of CEO comp. likely unlocked earlier this week

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 55.7% (56th Percentile rank FINRA Reporting)
FINRA Short/Total Volume = 38.0% (44th Percentile rank Shorting)
FINRA Short Exempt Volume was 0.24% of Short Volume (42nd Percentile Rank)​

Comment: "Coke'd up MMs buck +macros extracting billions in SH value"

View all Lodger's After-Action Reports

Cheers!

 

[MC3OZ]

Now we are getting crazy...

https://twitter.com/wholemarsblog/status/1314353435790045184?s=21

/s

If there is any truth to this at all, it is probably for Semi production at Austin...

Where on the site Semi production will be done, how it will be done and when it will start, remain a complete mystery.

I'm still leading towards some sort of temporary/rapid construction elsewhere on site.

While we are on Austin... looks like they can't rush to footings, the type of soil there looks particularly challenging...

Good progress ...

 

[ggies07]

Now we are getting crazy...

https://twitter.com/wholemarsblog/status/1314353435790045184?s=21

/s

I got 5k coming from another fund that won't be ready until next week...need this stock to stay calm until then. This will be the first time since 2012 I'll buy more shares and I'm very excited.

It's all happening guys!! Just gotta stay alive for the next 10 years to see it come true....

 

[Fobble]

Now we are getting crazy...

https://twitter.com/wholemarsblog/status/1314353435790045184?s=21

/s

I think this is too unrealistic to be true, unless they are building a tent, and not a giga factory.

 

[Thekiwi]

Chamath on Tesla being essentially mainly a energy utility competitor and how they are deregulating energy production.

Tom Nash using DCF model following the Tesla bears theory to show that the current valuation of only the Tesla auto sector is rightly evaluated with today’s valuation.

this is showing that with a bear analysis, the stock price today is the correct valuation according to the future profits of 2025, even being conservative with only 15% growth in the last 2 years. If the sales keep growing exponentially and Chamath is right, we are talking about a valuation much higher in 2025 and simply out of the ballpark by 2030.

To anyone planning to hold their shares till 2030, I recommend to start looking right now for islands for sale on realtor because we will all be buying them in 2030 with our TSLA stock.

I'm sorry, but that Tom Nash valuation model is nonsense.

 

[SPadival]

Just a point of clarification - I am unaware of any 18650 lines in GF1.

Someone correct me if I am wrong, but my understanding is that Tesla has always imported the 18650 cells for the S/X, and GF1 production has exclusively been 2170 cells.

That was a typo in my OP. I should have corrected it in my quote

I'm sorry, but that Tom Nash valuation model is nonsense.

lol. I was waiting for someone to say that

 

[insaneoctane]

I keep seeing people talking about Tesla Insurance (not picking on you DurandalAl - just a starting point), as if it's a serious business for Tesla -- either now or in the reasonably near future.

Can anybody point me to anything that suggests that Tesla Insurance is viewed as a serious business for Tesla, either now or in the future?


My understanding is that today it isn only available in California. My belief is that this will never be a serious business for Tesla - that biggest outcome intended would be Tesla acting in the role of a referral and bundler of a large number of new customers to an existing auto insurance company (i.e. - negotiating a special rate for "Tesla" insurance through State Farm, and then referring Tesla buyers to the "Tesla Insurance operated by State Farm" insurance policy).

I DO see this idea as something of a threat or nudge / motivation to the current auto insurance industry - start taking the improved safety and lower overall claims levels from Tesla vehicles into your premiums, or we'll just start up a competitor (or work with one of your competitors that IS doing this) and take your Tesla auto insurance premiums away from you.


In the meantime, the barriers to entry for Tesla as an insurance provider are very high. State by state licensing. Reserves so that Tesla can pay claims when needed. Building up a new division with the insurance business processes and expertise. It's this last point I see as a particularly large barrier - the Tesla insurance legal entity is going to need a fair bit of cash to get started, and will need to retain some reasonably large amount of reserve to be certain of being able to pay claims. Stuff that insurance companies do routinely and do well.

I imagine there are others here with a lot more insurance industry experience than me (who has ~none) and can articulate these barriers to entry better.


In the end, I see Tesla insurance as a money loser or break even for Tesla outside of a situation in which none of the current auto insurance providers see lower claims insuring Teslas and thus Tesla decides to go into competition by charging lower insurance premiums to insure Teslas.


Also worth adding, again MHO, is that it isn't completely clear to me that Teslas actually ARE cheaper to insure. Factors in favor of cheaper are fewer accidents, and reduced medical bills for the people in the Tesla when it does get in an accident.

Factors in favor of more expensive are that Teslas are totaled more frequently (I believe - don't have data to back this) and that seemingly minor damage leads to much larger repair bills (again - my belief, not data). Also that Teslas are more expensive on average than other cars on the road.

I think that the balance of those factors, mostly because of the medical bill side, DOES make Teslas cheaper to insure. Is it enough cheaper though for a standalone insurance business to flourish and generate significant profits though? I am firmly of the opinion that this is no, at least today and the foreseeable future. Get 10M Teslas on the road in the US - maybe then.


(and in the meantime, Tesla referring customers to a particular provider with typically good deals on auto insurance for Teslas - totally)

As with all things Tesla, you can never tell if something that starts as small potatoes will become a genuine profit center of significance. Examples include Tesla service. Currently operating "at cost" and I think Elon is on record of saying it will never be a for-profit operation. I don't know if this is true and suspect even with EVs stellar reliability, due to the shear number of vehicles Tesla will have sold that there will be plenty of profit to make on service, battery upgrades and more if Tesla chooses to. The Solar City acquisition garnered a lot of nay sayers, but had arguably springboarded Tesla Energy to potentially parallel automotive. FSD did not exist on the original MS, but now (arguably) has huge upside when/if it works. Insurance has legs. Initially I agree it was a hedge because Tesla had exceptionally safe cars, but the insurance industry was sticking owners with high premiums. Less so for the premium MS/MX but more down stream for the M3 on down, If unchecked that could seriously impact sales. Combine this with the persuit of level 4 and level 5 autonomy. Tesla is claiming to release FSD software this year that is "capable" of zero interaction. Granted, the driver will still be 100% responsible, but what are insurance companies going to do once that's out? Nothing? Maybe. Insurance could be a single point of failure for FSD...once Tesla convinces government agencies that level 4 or level 5 is ready and Tesla wants to hit the switch, what do you think insurance companies will DO? If they all sat around and waited for the data it would be chicken and the egg. Could be a stalemate. I'm uncertain how the industry will handle FSD when it first arrives. I think Tesla insurance was born as a result of these uncertainties. With Tesla insurance available, Tesla is in more control of their own destiny, they can ensure fair rates for their customers and they have the fleet size and data collection beyond the insurance companies dreams and just might revolutionize/disrupt that industry too! Tesla fully expects FSD to be much much safer than human drivers. Would the conventional insurance companies recognize that and pass that along to the customers? Tesla insurance can ensure that this happens.

Lastly, ask yourself this: The 3-6 months after Covid hit, how much less did you drive? Do you think the ~15% credit your insurance gave you (or whatever they gave you) was commensurate with the reduction of the liability and payouts that they experienced? Hmmm.

 

[Mo City]

Now we are getting crazy...

https://twitter.com/wholemarsblog/status/1314353435790045184?s=21

/s

If true, I guess this indicates the Semi program got moved higher up the food chain.

I've been more pumped than most about the Semi from the day it was announced but it seems like ramping Model Y production in Berlin should be on top. I think 1 million deliveries in 2021 is very likely if Berlin starts rolling in Q2.

EDIT: This could be about the CT instead of Semi.

 

[Hock1]

I didn’t get Tom’s DCF Model. To me the numbers don’t add up. Did he just leave off all future years? What discount rate was used?

I thought a DCF was the present value of all future cash flows discounted back to the present at a given discount rate?

In response to a similar question in the comment section, he replied he was using profit multipliers. Is he conflating P/E ratios with DCF, or am I confused?

I agree. IMO, DCF is the only reasonable way to value a hyper-growth company. Any metric, based on looking back (like P/E) is useless. I'm not sure where he is coming from, but I don't agree.