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

[lascavarian]

GJ vs GM just on CNBC. GJ in typical form, no demand

 

[TheTalkingMule]

The next massive battery change I'd like to see for Tesla is a shift from using transportation appropriate cells to something simpler and heavier in stationary applications.

 

[Rarity]

Regarding Musk's tweet four days ago about nickel and switching to iron, I wonder if that was a message to Indonesia as part of Tesla's ongoing negotiations the last couple of months...

Nickel is our biggest concern for scaling lithium-ion cell production. That’s why we are shifting standard range cars to an iron cathode. Plenty of iron (and lithium)!

 

[Singuy]

Regarding Musk's tweet four days ago about nickel and switching to iron, I wonder if that was a message to Indonesia as part of Tesla's ongoing negotiations the last couple of months...

It was also on the slide from battery day. Not new information.

 

[ggies07]

Tourist routes are where you really want FSD because you can watch the scenery rather than the road. The Dallas Zoo had a drive-thru Christmas light event. The driver had to watch the car in front and hardly ever saw any lights. (The other thing the driver had to do was to keep turning off the lights which kept going on automatically--off should be OFF.)

or in school carpools where the cars have to make a certain route to drop off their kids...We have lots of families who have Teslas and when I see several come through the carpool line at a time, I like to imagine one day they are all on FSD and the flow is evenly spaced out.

 

[lklundin]

Honestly, I think he has a point. TSLA's volatility is not for everyone. If you (not you in particular... anyone) can't handle the volatility, you're better off not putting your money in $TSLA.

I think this Twitter account (SawyerMerritt) is just seeking attention.

It's hypocritical to advise Tesla-investors to focus on long term investment goals and to even pass judgement on who is a suitable Tesla-investor - and then using the same account to issue sensational and - as it turns out - incorrect statements regarding Tesla in the short-term.

This person has delusions of being helpful.

 

[Nocturnal]

Does anyone have a decent, verified breakdown of WHERE teslas batteries come from? Even as an attentive investor, I'm really not sure. I know they have gigafactory nevada, and thats a deal with panasonic, where I assume 100% of the factory output goes to Tesla, and I know they also have this new pilot line for the 4680s which is (as I understand it) in freemont, but if you put a gun to my head and asked me to explain how this breaks down in terms of percentage of batteries consumed... I'd have no idea.

And I assume GF China is making its own batteries, but again... no idea.
Frankly this is an area where I would like to see tesla take on MORE vertical integration. I don't want them to be outbid for batteries on the open market.

I haven't seen any specific data around the breakdown but it really seems like the answer is "from everyone" and "as much as they can produce". I don't see Tesla being outbid as an issue because they have been working on these procurements for months/years before their competitors. It's also worth noting that from the supplier perspective, a slightly higher price from say Ford doesn't mean much. Not only would it be a smaller order but far more risky. Why deal with scaling for Ford when they could drop back out of the EV space in a year when instead you could take a lower margin and be comfortable that Tesla will be a long term customer? Gross simplification of supply chains but I think it's valid.

I'll also have to disagree with this. If you think rail traffic is going to shrink you probably haven't seen one of these:


View attachment 640799

I would bet a lot of money that rail traffic will shrink, at least in % of total shipping. Autonomous EV semis will be close to rail price and will ship your goods in 2 days vs 2 weeks.

 

[UkNorthampton]

If anybody can have as much batteries as they want- why does Tesla keep saying they will happily buy every single one anybody can make for them and are ramping up their own production and they still can't get anywhere near enough batteries for demand?






I mean- I'm willing to consider there's ignorant, idiotic, non-inheritance billionaires.

But I'm going to need considerably more convincing that Warren Buffet is one of em.


I mean, the most basic description of his own strategy is:

Find a very few companies you understand, feel are undervalued, and you have a lot of confidence in the continued future of. Then own them.

That's his philosophy.

That's coincidentally what most of the investors in this thread advocate.

They just have a different opinion on which few companies.

And that's fine. Not everyone has to understand every good company.

That's honestly part of WBs point- find a few YOU understand, own them. If someone ELSE finds DIFFERENT ones THEY understand that are great companies- they should own THOSE instead.


You and the other guy may have different results from each other- but you'll probably both be well ahead of the folks who can't bother and just throw $ at an index fund.

Part of understanding the companies Buffett invests in SHOULD include understanding their competitors or threats to continued business as usual.

As Musk companies/Disruptive Innovation threaten so many BH investments, they should be learning/understanding the competitive/business environments.

SWOT analysis with just Strength & Opportunities doesn't make sense.

 

[mrdoubleb]

EV Sales: Global Top 20 January 2021

Apologies if anyone else has shared this, but I think it is important to put last year's numbers next to this post:

Besides a $5000 car manufactured locally taking the top spot (shocker!), what is interesting is that Model 3 sales have doubled YoY despite the Model Y capturing the market's attention. BTW, Model Y numbers also looking good, despite China being in initial ramp phase in January and the car not available outside NA and China. As a result Tesla's global sales have almost tripled YoY, even though S/X are MIA (well, they sold 1877 from inventory).

 

[Rarity]

It was also on the slide from battery day. Not new information.

No, not new information. Rather, a reiteration for Indonesia's ears.

 

[Knightshade]

Then how is it that other companies actually sell BEVs/PHEVs if there are no batteries for anyone except Tesla?

I never said any such thing.

I pointed out Toyota can't just partner with someone and "go get" all the batteries they want as your post to which I replied was suggesting.

Nobody can. Not even Tesla.

All the existing EV makers are saying they don't have enough, and would take more if anybody had them to sell- and they expect that shortage to be true for many years into the future (Tesla included saying that despite being well ahead of everyone building their own to help).


Yes GM is building a factory with LG.

If everything goes perfectly then maybe in another year or two they'll be producing about what Tesla already was from just ONE of their sources a while back.

If simply throwing a pile of cash at the battery supply problem could FIX the shortage, Tesla would've already fixed it.

Instead Elon has so little to spend cash on that would advance the mission he bought 1.5B in crypto.



As others have mentioned there's a number of reasons for the shortage other than just "not enough GFs" and Elon himself had a most optimistic estimate of maybe 30 million EVs a year worth of batteries near end of this decade- which is still less than half of all new cars produced.

(queue the optimists who think RTS THIS YEAR PEOPLE WILL JUST STOP BUYING THOSE OTHER 50 MILLION CARS! folks I guess...)[/QUOTE]

Part of understanding the companies Buffett invests in SHOULD include understanding their competitors or threats to continued business as usual.

And as I noted, their rail and energy companies appear to be ahead of the other rail and energy companies on transitioning to position for future changes.


Disruptive companies put SOME legacy in an industry out of business, they just about never put ALL legacy out.

Again they don't need to beat Tesla, they just need to beat the slower to adapt companies.

 

[Singuy]

I never said any such thing.

I pointed out Toyota can't just partner with someone and "go get" all the batteries they want as your post to which I replied was suggesting.

Nobody can. Not even Tesla.

All the existing EV makers are saying they don't have enough, and would take more if anybody had them to sell- and they expect that shortage to be true for many years into the future (Tesla included saying that despite being well ahead of everyone building their own to help).


Yes GM is building a factory with LG.

If everything goes perfectly then maybe in another year or two they'll be producing about what Tesla already was from just ONE of their sources a while back.

If simply throwing a pile of cash at the battery supply problem could FIX the shortage, Tesla would've already fixed it.

Instead Elon has so little to spend cash on that would advance the mission he bought 1.5B in crypto.



As others have mentioned there's a number of reasons for the shortage other than just "not enough GFs" and Elon himself had a most optimistic estimate of maybe 30 million EVs a year worth of batteries near end of this decade- which is still less than half of all new cars produced.

(queue the optimists who think RTS THIS YEAR PEOPLE WILL JUST STOP BUYING THOSE OTHER 50 MILLION CARS! folks I guess...)

Rate limiting step right now is raw material since Tesla figured out everything else except nickel. You can bet a dollar that Tesla has a team first principling nickel mining right now leveraging boring company and such. Once that's solved then we can start seeing Tesla throwing more billions at new terafactories.

 

[MABMAB]

I think this Twitter account (SawyerMerritt) is just seeking attention.

It's hypocritical to advise Tesla-investors to focus on long term investment goals and to even pass judgement on who is a suitable Tesla-investor - and then using the same account to issue sensational and - as it turns out - incorrect statements regarding Tesla in the short-term.

This person has delusions of being helpful.

Most tweeter accts are such, as are the utubers

 

[UkNorthampton]

And as I noted, their rail and energy companies appear to be ahead of the other rail and energy companies on transitioning to position for future changes.

Disruptive companies put SOME legacy in an industry out of business, they just about never put ALL legacy out.

Again they don't need to beat Tesla, they just need to beat the slower to adapt companies.

A lot will depend on

1. degree of disruption (industry)
2. speed of disruption
3. company situation (high/low debt, agile management)
4. government support
5. residual income (maintenance, parts)
6. competitors' abilities (better/worse) - just have to outrun other humans, not the tiger

Just realised time, so last post on this from me.

Spoiler: detail

Horse/carriage/wagon replacement was fast in USA (AFAIK), slow in some other areas (WW2 German Army still had millions of horses - wikipedia - "supply train of a 1943 German infantry division employed 256 trucks and 2,652 horses attended by 4,047 men")

McCabe-Powers Body Company - Wikipedia 1877-1983
https://en.wikipedia.org/wiki/H._J._Mulliner_&_Co. "Mulliner was one of the last independent coach builders, others being controlled by motor manufacturers or distributors" 1760s-1959

Ditto sailing ships etc - still in use before WW2 in UK <> Netherlands - one man & a boy ships
Analogue electronics/valves

If we're considering rail, insurance, airline or electric utility/grid investments of Buffet, I don't have enough knowledge to pass judgement, but I have a suspicion that enough of Buffet's investments will be affected as to materially affect returns & possibly force actions upon him eg sales, reduce debt. Whether it's a house of cards or the dents will buff (et) out is the question.

I think he's making a mistake betting on legacy industries without looking out for disruptions.

My own belief is that EV supply will increase, but insufficient for demand. Legacy ICE will NOT sell many volume vehicles, just niche. The gap in supply / demand will be met by keeping used ICE, ride-sharing/autonomy, small battery EVs and maybe some switch for legacy ICE eg Dacia rather than Land Rover.

The debt & liabilities of ICE will take down many of them, their banks, pensioners & shareholders suffering.

 

[Krugerrand]

“........Maybe this isn’t for you” is about the most pretentious thing you can say other than “I’m shopping for large pink Himalayan salt cubes”

I agree with the statement, the wording is what bothers me

Huh. I thought he was actually being quite nice about it. I’d have said something a bit more, um — to the point. Interestingly enough, I have specifically shopped for and purchased pink Himalayan salt in big chunks. So I guess I’ll have to add pretentious to my list. I’ll file it between meat eater and stupid rich.

 

[lafrisbee]

Although Tesla is 23% of the market share on that list, it's closer to 40% of the battery usage. Popular cars like the Hong Guang Mini by Siac has a battery pack size of 10kwh. I3 from BMW has battery size in the 40s while egolf/zoe are in the 50s. Tesla's average is in the 70s with their given mix.

After your first sentence i expected the next to contain something regarding stationary battery storage... so how does that shift the percentage of "battery usage"?

 

[Singuy]

After your first sentence i expected the next to contain something regarding stationary battery storage... so how does that shift the percentage of "battery usage"?

There needs to be a chart of competitors as well in that space to judge, which is not easy data to find. Might be a surprise to some but Tesla is not the only company that has battery storage products.

Anyone remember of total battery usage was part of the battery day slide deck? With that you can extrapolate total usage compared to total world production.

 

[Sofie]

Okay now I’m not so sure about setting a buy order in for 620$. We’re looking pretty solid. Maybe we never go to 620$ again lol.

 

[TheTalkingMule]

I had an interesting Fisker thought and I'd appreciate some guesstimating help on it. Henrik was hired by Elon in 2007 to design the exterior of the Model S. He proceeded to absorb what he could about the EV manufacturing business, do nothing for the Model S, and proceeded to fleece investors of billions over the next decade+.

My question is.....how much do we think Henrik's options would be worth today if he had just done his job for a few years? Surely the head of a highly successful Model S design team would've gotten TONS of options up front and then been able to negotiate far more. Can we put a dollar value on this as a cautionary tale about being choosing to be a rather than just doing your job?

 

[lafrisbee]

The next massive battery change I'd like to see for Tesla is a shift from using transportation appropriate cells to something simpler and heavier in stationary applications.

Exactly my thought for years....though I do the god elon thing and figure he must have a reason....until now.