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

[JustSaying]

Operating a factory in Germany/France/Belgium comes with a lot of oversight, bureaucracy and resulting headaches (> California!), I suppose this was factored into the location decision.

We used to rent a small warehouse to a Sears service center on Maui HI, the Sears contract attorney objected to to any late payment charge related to the first lease payment . He jokingly assured me that while it takes a while to get payments started we would probably continue to get lease payments for two months after they moved out.
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[AZRI11]

Oh, c'mon. Elon chases away people who plod along and get business things done reliably. He wants to know what amazing things they've done lately, and when the answer is nothing he fires them. So, no ordinary people around to pay the bills. I guess he figures it works out better that way all things considered.

And that's why when I had my Model S (finally) get its Infotainment Upgrade today (third time's the charm) I got a text message from the service guy saying sorry they won't be done until Monday. Then five minutes later I got an automated text message saying come on in and get your car. So, being as I didn't want to drive there for nothing, I text the service guy asking what's the deal -- car now or not? No answer. No answer. Multiple texts got nothing. The people who care about making this sort of stuff work well just don't work at Tesla. And they never will for long. Elon makes sure of that.

Service manager probably has hundreds of messages. Half of them are like "what's up with tsla stock today"

 

[kbM3]

This got me itching to do some very rough napkin math to ballpark a 2030 PT from two different angles.

Angle 1 - Revenue multiples using energy + auto TAMs

Assumptions:
- EVs are 100% of new car production in 2030
- Quick google showed an energy TAM of ~1.5T and quick math on 100m vehicles produced a year x 25k ASP gets us 2.5T. So I'll call it 2T TAM for both totaling 4T
- 5% market share across both TAMs. This is very conservative on the auto side, given EV market share we've already seen, and very bullish on the energy side giving benefit of the doubt to Elon's guidance on energy side quickly catching up to auto revenue

2030 @ 5% of 4T TAM = 200B

5x: 1T mkt cap, PT: $1,315 <-- very conservative for a company growing @ 40-50% CAGR
10x: 2T, PT: $2,630
20x: 4T, PT: $5,260
50x: 10T, PT: ~$13,000 <-- We've seen crazier things, like NKLA's valuation for instance


Angle 2 - Stretching ARK's 2018 generated 2024 model
For anyone that doesn't already have it, here's ARK's open source TSLA model: ARKInvest/ARK-Invest-Tesla-Valuation-Model

Turning our attention to the Tesla Valuation tab, we can make some assumptions about 2030. Here, I'm going to adjust just one variable:

1. Percent of all Teslas in autonomous fleet in 2024: 330%
​

This bumps the model from 10m vehicles in the fleet to 33m to better reflect the size of the fleet by the end of 2030. Still conservative given Elon's guidance on 20m produced in 2030 alone.

Revenue: 1.1T
Suggested Price: ~$6,800 (34k pre-split) - implies a 4.5-5x revenue multiple

​

1) ASP won’t be $25k in 2030 because of inflation.
2) Tesla’s share will be 20%, not 5%.
3) Tesla’s ASP will be higher than the average ASP, because they’ll be capturing the high end of the market.

 

[PKOttawa]

You seriously think the market sees Tesla solving FSD first? And that this is priced in?

Just as a point of reference.. the Alibaba backed startup has robotaxis being tested on the road now..

Self-driving robotaxis are taking off in China - CNN

Amazon backed Zoox has released their prototype as well..

Zoox unveils a self-driving car that could become Amazon’s first robotaxi

and of course there’s Waymo looking to carry passengers in self driving taxis in 2-3 years.

Self driving is a difficult problem to solve.. but there’s lots of competitors in this space.

 

[phantasms]

Hey guys. Is the Twitter use @SquawkSquare a member on here? I've been actively following him last week while day trading Tesla. While not flawless, he seems particularly skilled at calling the tops and bottoms. I'd love to learn from him. Thanks!

p.s. My sister picked up her Model Y and my Tesla short shorts came in, all on S&P day.

 

[Johnny Ma]

Hey guys. Is the Twitter use @SquawkSquare a member on here? I've been actively following him last week while day trading Tesla. While not flawless, he seems particularly skilled at calling the tops and bottoms. I'd love to learn from him. Thanks!

p.s. My sister picked up her Model Y and my Tesla short shorts came in, all on S&P day.

Congrats to you and your sister!

I don't think Squawk posts here. Seems like more of a (bullish on TSLA) trader rather than investor. More interested in near term movements of the SP.

 

[wtlloyd]

Just as a point of reference.. the Alibaba backed startup has robotaxis being tested on the road now..

Self-driving robotaxis are taking off in China - CNN

Amazon backed Zoox has released their prototype as well..

Zoox unveils a self-driving car that could become Amazon’s first robotaxi

and of course there’s Waymo looking to carry passengers in self driving taxis in 2-3 years.

Self driving is a difficult problem to solve.. but there’s lots of competitors in this space.

dis·cern·ment
/dəˈsərnmənt/
noun

1. 1.
   the ability to judge well.
   "an astonishing lack of discernment"

 

[Captkerosene]

I conclude = FSD is not priced in at ALL.[/QUOTE]

I disagree. I'm a waffler. I go from thinking TSLA is way overpriced to ridiculously underpriced. The variable that causes those swings is FSD. This is the most important discussion on this board and the only one I really care about. I sold a big chunk of my shares several months ago over concerns about FSD. Then bought many back on optimism over FSD. I put FSD at 60% of our value (maybe 30% of our price) - it's the killer app that makes us different and the reason it's crazy to buy any other car.

 

[Bet TSLA]

I conclude = FSD is not priced in at ALL.

I disagree. I'm a waffler. I go from thinking TSLA is way overpriced to ridiculously underpriced. The variable that causes those swings is FSD. This is the most important discussion on this board and the only one I really care about. I sold a big chunk of my shares several months ago over concerns about FSD. Then bought many back on optimism over FSD. I put FSD at 60% of our value (maybe 30% of our price) - it's the killer app that makes us different and the reason it's crazy to buy any other car.

Sorry, nobody with any money thinks as you do. Nobody on Wall St. believes in FSD as a technological reality or as any sort of business. Well, there's Cathie Wood and company, but they're an outlier in that regard. FSD is irrelevant to Tesla and TSLA until it's actually here and generating business with great margins and little or no risk right now. At the moment, it's irrelevant.

What you're describing is how not to make money through misdirected emotion. Just breathe slow and hold.

 

[Johnny Ma]

Sorry, nobody with any money thinks as you do. Nobody on Wall St. believes in FSD as a technological reality or as any sort of business. Well, there's Cathie Wood and company, but they're an outlier in that regard. FSD is irrelevant to Tesla and TSLA until it's actually here and generating business with great margins and little or no risk right now. At the moment, it's irrelevant.

Very much agreed. I don't know how you put a weight on something like FSD (as in fully autonomous vehicles capable of operating independently as robotaxis) into a valuation until it happens or is very close to happening - like, technology has been demonstrated but just awaiting regulatory approval. Not there, yet.

Factoring FSD software sales into things is another issue. People are currently paying real money for it. I have on two vehicles already.

 

[TheTalkingMule]

Is there not a FSD thread? I believe there's an entire forum dedicated to it,

 

[jw934]

Had to turn of after 10 minutes or so.

What a bunch of made up numbers ignoring what's possible in real life.

I was going to rate your post with a heart for a complete set, but decided best not to ruin the first straight 5-4-3-2-1-0 that I have ever seen.

 

[Spacep0d]

Is TSLA underpriced or overpriced?

Yes.

 

[Johnny Ma]

Is there not a FSD thread? I believe there's an entire forum dedicated to it,

Indeed there is. It's even sometimes informative. But the discussion here has been about FSD in relation to TSLA's SP. Seems very on topic to discuss whether or not FSD being solved will have material impact on TSLA. Also seem very on topic to discuss FSD as a $10k software package.

So, what's your point?

 

[Singuy]

Wow, just realized that the Falcon's first cargo mission to the ISS and the first production model S rolled off the factory floor happened when they first announced Cyberpunk 2077. Since then, they created and perfect self landing rockets, had two successful falcon heavy launches, mass produced S, X, 3, Y, built 2 giga factories, built out an entire supercharging network, flew humans to the ISS successfully, completed the starship belly flop, reinvented the battery and built FSD from scratch while Cyberpunk gets pulled from the digital store for being a buggy mess as of yesterday.

Yet bears still want more out of Elon. There' simplify can't be more achievements in this period of time from anything on earth.

 

[Johnny Ma]

Wow, just realized that the Falcon's first cargo mission to the ISS and the first production model S rolled off the factory floor happened when they first announced Cyberpunk 2077. Since then, they created and perfect self landing rockets, had two successful falcon heavy launches, mass produced S, X, 3, Y, built 2 giga factories, built out an entire supercharging network, flew humans to the ISS successfully and completed the starship belly flop while Cyberpunk gets pulled from the digital store for being a buggy mess as of yesterday.

Yet bears still want more out of Elon. There' simplify can't be more achievements in this period of time from anything on earth.

Yes, and it's not going to stop.

I wish @ReflexFunds still posted here, but if you did your homework (not saying you, personally, didn't), you'd realize his/her investment philosophy applied to TSLA was buried in his handle: Reflexivity Definition

 

[2daMoon]

Well - just the facts that:

You need a proper EV, long range, volume car.
Tesla make cars themselves - why license something, which will hinder your own products.

Do Tesla want inferior EVs to be associated with it Robotaxi fleet?

What if Tesla also licenses the skateboards to go under the other manufacturer's body styles?



When gathering information from various sources I try to keep in mind how the Tesla goal isn't profit. That is my goal, but Tesla's is the transition to sustainable energy. Anything that moves them toward that goal is fair game, and changes how one must evaluate them.

It is clear to me how people struggle to include that paradigm shift when assessing Tesla's performance to date and into the future.

Anyone working from typical strategies involving keeping things to one's self and maximizing profits simply don't apply when trying to grok Tesla. The crazy part is how a strategy so divested from the norm (maximizing performance based upon first principles) is also thriving against the traditional purveyors of autos, energy, space flight, internet connectivity, A.I., hacking the brain, and more.

The two folks who are arguing so vehemently against what they watched suggests they didn't finish watching the rest as most of their points are addressed in the several scenarios he worked from toward the end. Inclusive of considering the chance of bankruptcy.

I found it informative and felt that it added yet another perspective to be considered along with everything else I've learned.

 

[Artful Dodger]

Several members appear to be under the impression that the number of TSLA shares required by S&P 500 Index funds could not be purchased in a single session, that this additional volume (about 115M shares) could not be produced by the Market.

Let's look at the Top Ten Volume Days for TSLA, with the highest volume days listed in descending order:

So we can clearly see that December 18, 2020 was NOT a record volume day for TSLA (in spite of it being a 'triple-witching' day in addition to S&P Index buyers' day).

Indeed, during the first week of February 2019, the 4-day average volume was 245,596,063 shares per day, which is 10.6% higher AVERAGE daily volume than occurred on December 18, 2020.

So (arguements by incredulity aside), it is entirely possible that S&P 500 Index funds have largely already acquired their required TSLA inventory for Monday morning. That does not mean that S&P 500 Benchmark funds have completed buying (likely foolish to try to 'crowd the trade' on Dec 18). Indeed, I expect steady buying interest from these funds, and not just on Monday or before Year End, but going forward steadily as TSLA continues to outperform the other 5 big names on the S&P list. Those benchmark funds that are 'light TSLA' will be 'light growth'.

Growth? Giga. Projection? Profit.

Cheers!

 

[UnknownSoldier]

Is TSLA underpriced or overpriced?

Yes.

Schrödinger's share price

 

[TheTalkingMule]

Several members appear to be under the impression that the number of TSLA shares required by S&P 500 Index funds could not be purchased in a single session, that this additional volume (about 115M shares) could not be produced by the Market.

Let's look at the Top Ten Volume Days for TSLA, with the highest volume days listed in descending order:

View attachment 619434

So we can clearly see that December 18, 2020 was NOT a record volume day for TSLA (in spite of it being a 'triple-witching' day in addition to S&P Index buyers' day).

Indeed, during the first week of February 2019, the 4-day average volume was 245,596,063 shares per day, which is 10.6% higher AVERAGE daily volume than occurred on December 18, 2020.

So (arguements by incredulity aside), it is entirely possible that S&P 500 Index funds have largely already acquired their required TSLA inventory for Monday morning. That does not mean that S&P 500 Benchmark funds have completed buying (likely foolish to try to 'crowd the trade' on Dec 18). Indeed, I expect steady buying interest from these funds, and not just on Monday or before Year End, but going forward steadily as TSLA continues to outperform the other 5 big names on the S&P list. Those benchmark funds that are 'light TSLA' will be 'light growth'.

Growth? Giga. Projection? Profit.

Cheers!

69M of that was at the cross. 69M < 120M

I'm surprised there's not more chatter/debate about this here today. Looks to me as though index funds feel they can get to nearly 120M by combining Friday's cross and Monday morning's opening cross. Any other speculations?