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

[Artful Dodger]

Futures down a bit:

DOW30 Mar 21 -82.0 -0.26% 02:00:00
S&P500 Mar 21 -13.37 -0.34% 02:00:00
NDQ100 Mar 21 -43.13 -0.32% 02:00:00​

Asian shares fall amid China's asset-bubble warning | 1:44am EST

"Asia stocks dropped on Tuesday and European equity futures fell as a senior Chinese official expressed wariness about the risk of asset bubbles in foreign markets and a recent bond market sell-off still weighed on investor sentiment."​

 

[mrdoubleb]

Volvo is cutting out dealership Volvo Cars to Go Electric-Only And Shift Sales Online From 2030

From 2030, huh?! What a brave company!

 

[MXWing]

Holy sugar! You're down 40% ? How did you do that?

It's a copied meme - not that ugly but ugly enough.

Here is a good setup for a solid asskicking:

1 - Tesla long positions dumping
2 - Tesla short puts in the money.
3 - Tesla short put IV spiking from the world ending (1.6% on the treasury yield wheeeeeeee)
4 - Mama Cathie Funds
5 - Shorts puts and long calls on Mama Cathie Funds

Everything is recoverable unless one gets a margin call and forced to liquidate positions.

Since I structure short puts to pay for long calls, breakeven happens with enough time. Hope sooner than later.

Futures down a bit:

DOW30 Mar 21 -82.0 -0.26% 02:00:00
S&P500 Mar 21 -13.37 -0.34% 02:00:00
NDQ100 Mar 21 -43.13 -0.32% 02:00:00​

Asian shares fall amid China's asset-bubble warning | 1:44am EST

"Asia stocks dropped on Tuesday and European equity futures fell as a senior Chinese official expressed wariness about the risk of asset bubbles in foreign markets and a recent bond market sell-off still weighed on investor sentiment."​

Not to offer trading advice but when VXX is cheap - buy a lot of contracts for crap like this.

The problem that a lot of people are missing is that many companies are KILLING IT in their quarterly reports, justifying their valuations.

Companies are growing.

Look at ZM. Top beat. Bottom line beat. Positive forward guidance. Clear runway for more growth. Same with TSLA.

 

[Artful Dodger]

3) With land available to the East I see little reason for CapEx to go multi-level with this,

We learned yesterday that the land to the SE of GF3/Phase2 is priced at approx. $2,308 per sq. meter, or ~$1B for 114 acres:

Rumor: Tesla May Have Acquired a Large Piece of Land Near Giga Shanghai to Expand EV Production

Seems that land is no longer "cheap". Tesla payed about $140M for the 1st land lease, which is also ~2x the land area:

https://www.cnbc.com/2018/10/17/tesla-buys-new-plot-for-its-first-china-factory.html

If Tesla can secure local non-recourse debt again at 0.8% annual interest, this new land lease represents ~$8M/yr in capital costs.

EDIT: If Tesla builds 500K Models 2 per year at 30% gross margin w. $25K sales price, then the $8M/yr capital cost for this land represents about 1K vehicles sold, or about 0.2% of production. So not an insignificant amount of money, but well worth the expense if Tesla can net ~$3.75B in gross profit from production of 500K Models 2.

Now question is, how do we scale to 1M+/yr? I see worldwide Model 2 demand at 5M units per year, so even with full production at Giga Berlin, Tesla China will require a continuous build program for new manufacturing, maybe even to 2M/yr (LFP bty to the rescue).

I think Tesla Semi manufacturing will be added in China in due course (extra to Giga Texas), and I believe the "Model 1" will be the large volume "robotaxi" beginning around 2025 and eventually scaling production to 10M units/year (world-wide).

Cheers!

 

[heltok]

New book about Elon and SpaceX out:

https://www.amazon.com/gp/aw/d/B089QRXBXB/ref=tmm_aud_title_0?ie=UTF8&qid=1614675057&sr=8-3

 

[Khamul]

Also SpaceX, but I just fell over this very interesting tidbit: To keep up with global demand, SpaceX is breaking ground on a new, state of the art manufacturing facility in Austin, TX. Seems like Austin is going to become a Musk Enterprises stronghold.

The above book is highly recommended btw. I haven't read it yet, only a few teasers, but Eric Berger is a big name in space journalism, and he's a good writer - I love all his articles.

 

[wnorris]

Over a 6 year period, a 42% premium for subscribing at $200/mo vs. buying up front strikes me as quite reasonable. The whole point is just buy FSD if you plan to own the car a long time. IMO, a breakeven at ~4 years makes sense.

The risk of subscriptions cannibalizing $10K up front vs. generating incremental revenue from additional FSD users is something Tesla is weighing. Methinks the initial monthly fee may be adjusted once the initial response is in.

Tesla will certainly adjust the monthly subscription fee every few months as subscription data comes in. Elon has shown no issue with making adjustments as data rolls in. Tesla will get it right in time.

Personally, I do not plan on subscribing on a on-going basis (at least initially). I believe most will subscribe only during months they anticipate a need. Local daily travel to me does not justify the costs being thrown about, but I could be persuaded once a full fledged, true LVL 5 FSD is proven. I'll be curious if they incentivize users to buy FSD outright or for longer term (1y or 3yr) subscriptions vs monthly.

Finally, I agree with the poster who noted there will likely need to be a separate personal vs business subscription. Use case differences need to be taken into account for FSD.

 

[NooB_cat]

Sigh.... anyone know why the pre-markets are dropping again?
Cos it ain't the 10 yr yield this time!

 

[insaneoctane]

I think people trying to figure out Tesla’s FSD pricing strategy need to consider how very time sensitive the initial opportunity is. Tesla is on track to be the first to offer FSD for ANY price. This gives them significant pricing flexibility while they’re the only game in town. Many would agree that at some point in the future, all car manufacturers will have FSD and the price premium will have certainly dropped because it’s a commodity. But how long will Tesla be the only automobile manufacturer offering FSD? Then, once they’re not the only one, how long before Tesla FSD isn’t meaningfully the best or safest? All these phases (plus the Tesla robotaxi network) add significant complexity and layers to the pricing strategy. My guess is that it bumps up again at full public release, increases further as the safety multiple vs human increases (think dojo), peaks as safety multiples make not using it just stupid, and ultimately declines as other players begin to arrive. The competition’s offerings will influence the pace of the ultimate reduction. Lastly, I believe Tesla will have different costs/rates for commercial vs personal use.

 

[Artful Dodger]

Sigh.... anyone know why the pre-markets are dropping again?
Cos it ain't the 10 yr yield this time!

#246579

 

[EVWatcher]

Futures down a bit:

DOW30 Mar 21 -82.0 -0.26% 02:00:00
S&P500 Mar 21 -13.37 -0.34% 02:00:00
NDQ100 Mar 21 -43.13 -0.32% 02:00:00​

Asian shares fall amid China's asset-bubble warning | 1:44am EST

"Asia stocks dropped on Tuesday and European equity futures fell as a senior Chinese official expressed wariness about the risk of asset bubbles in foreign markets and a recent bond market sell-off still weighed on investor sentiment."​

Strange that they omit the part where Guo also mentions the very dangerous and speculative state of the Chinese housing market. That thing has been a cyst ripe for popping for over a decade but they've managed to keep it from bursting.

 

[Tslynk67]

#246579

C19 cases rising again too, which is spooking some...

 

[15Peter20]

Volvo, on the face of it, seem to understand.

 

[LiveLong&Profit]

Working FSD will save hundreds of thousands of lives. Every year. I refuse to believe that getting this into as many cars as possible as quickly as possible would not be a factor for Elon.

So while Elon (and I) agree that if you buy FSD upfront it should be cheaper than paying per month I really don't agree with the reasoning from many here that this cost should be better already at six, four or even three years. Yes, I've seen posts about buying for a leased car should be cheaper than paying per month.

Absolutely not. With a car life of 20 years that would mean buying upfront is less than a third of the cost. That is way to much of a difference. It should be at least in the neighborhood of 10 years.

In the end though I think the goal for Tesla is to get rid of FSD upfront sales. They want it all to be subscriptions. They just need to have enough cars out there so they don't miss out on to much revenue during the period when upfront money stops.

There are very few (if any) companies that have subscriptions that also lets you buy a full version that updates including additional futures more or less forever which would be necessary for FSD.

Having what FSD has cost in the past as some measurement for what it should cost in the future is also contra productive. If Tesla can get 15% of Tesla owners to pay $400 or 30% to pay $200 or 60% to pay $100, they should go for the last option. It brings in the same revue and saves more lives because a higher percentage of miles driven will be with FSD. It will also get better faster because of more real life usage. In the end it would also sell more cars the cheaper FSD is.

20 million cars at 60% take rate at $100 is $14.4 billion a year. From each years production. Every year.

It's not the high price that brings in the revenue. It's the take rate.

I predict that in three years you won't be able to buy a full FSD with no limitations upfront at all. And three years from when subscription starts you will be able to get FSD for $100/month including miles close to the average driving distance in a country. If you drive more there could be a surcharge for every 100 miles or something.

Agree with this reasoning: Elon will prioritize lives saved rather than strict fairness re. early adopters having payed up to 10K for owning FSD. Maybe 100$/month base cost plus 10 cent per FSD mile is a good compromise for having a high take-rate ? - and still getting a decent recurring income (depending on miles driven).
There must also be a pro level also for people solely or primarily using their Tesla for robotaxi. So the 100 dollar plus 10 cent 'amateur'/non-pro subscription could be limited to perhaps 1000 miles/month? Don't know what will happen when you cross that: Are you then forced into the 'pro' subscription? I predict a lot of people will move further away from big, expensive cities when FSD becomes a reality and combine FSD with remoting/WFH. Is a 3 hour commute each way a problem if it is only ~twice a week, and spent in your nice Tesla? Sure, if you also need to be 9 hours at the office location for meeting with co-workers and customers it is a long 15 hours day - but maybe worth it, overall.
It will be interesting to see how Tesla will enable this balance re. private owners driving a lot with the need to avoid people 'unfairly' using a private subscription for robotaxi services.
It will be a difficult task to balance high take rate with a good degree of fairness re. early adopters owning a FSD vehicle - and balancing both against getting a proper amount on income re. privately owned robotaxis versus Tesla fully owning robotaxis themselves.
Long term subscription only makes the most sense. (Don't know when selling FSD will stop completely, but I am pretty sure it will at some point)

 

[MikeAtkinson]

Rob Maurer has lots of news today in the Tesla Daily podcast. Most of it has been mentioned upthread, but his perspective is valuable.

[I think Tesla Daily has not been mentioned for some time here, new investors will probably find it very useful as a short round-up of the latest Tesla news.]

 

[FS_FRA]

From a German perspective, I really like the idea of a monthly FSD fee over the $10K upfront when considering company car leasing (which is hugely popular here):

• you are taxed with a benefit-in-kind tax of 0.5% (or 0.25%) of the new car cost on a monthly basis
• so if FSD is $10K and included in the cost of the car, then I have to pay taxes on 0.5% of $10K = $50 every month
  • over a 3-year lease, which is quite common, this adds up
• if it's simply a monthly fee (such as premium connectivity), then this can simply be expensed and there are no taxes due

That is of course until the German IRS figures out that there is an income source just waiting to be exploited there....

 

[j6Lpi429@3j]

I think people trying to figure out Tesla’s FSD pricing strategy need to consider how very time sensitive the initial opportunity is. Tesla is on track to be the first to offer FSD for ANY price.

Being first is also vital for high-income customers, because of inertia. I am pretty price-insensitive to things like taxi prices. I have the uber app installed on my phone. I never got around to bothering with Lyft. If someone told me lyft was 50% cheaper, I still probably cannot be arsed to install it on my phone. In other words, by being first, Uber can overcharge me 50% probably in perpetuity, just because I *already have a relationship with them* as a customer.

Thats another reason why I side with cathie on the 'start a ridesharing network without fsd right now' debate. Get people to install 'TeslaRide' on their phone now. Sometime next year, or 2024, the next car that shows up will have no driver, but build the network now.

 

[UkNorthampton]

Tesla related: Aston Martin, Honda & Bosch got together to issue a nonsense PR 'report' that was widely reported in nonsense media (ie most of it). It attempted to slow EV adoption & create FUD against Tesla & other EVs. All made up.

Aston Martin in row over 'sock puppet PR firm' pushing anti-electric vehicle study

Spoiler: Detail

"The study, which has since been widely debunked by experts, was presented as “groundbreaking” third-party research and appeared to show that electric cars would have to travel as far as 50,000 miles before matching the carbon footprint of a petrol model.

Thursday’s report was commissioned by companies including Aston Martin, Bosch, Honda and McLaren shortly after the UK prime minister, Boris Johnson, called for a ban on the sale of new fossil fuel vehicles from 2030, and presented as the work of Clarendon Communications.

But it can be revealed that the same companies that were credited with commissioning the study collaborated to write the report themselves, and the communications firm is a company registered under the name of Rebecca Stephens, who is the wife of Aston Martin’s government affairs director, James Stephens. The company was set up in February and registered to the address of a property jointly owned by the married couple.

Spoiler: Detail

It was released by a PR firm owned by Aston Martin's PR Director's wife (who is actually a nurse) registered at their domestic address.

A lot of funding for this report came from Bosch - who are pushing eFuels - synthetic replacements for petrol & diesel. Very inefficient but seen as a hope (especially for legacy ICE in Germany) & will probably get lots of government support - sucking it away from EVs & more FUD will result.

Aston Martin: The billionaire building 'a British Ferrari'

"Electric and hybrid technology, he explains, can simply be brought in from the German firm Mercedes-Benz.

The two companies have a technical partnership, while Mercedes' parent company Daimler also has a 20% stake in Aston Martin."

https://twitter.com/AukeHoekstra/status/1346024274302300160

 

[Singuy]

Nio cuts production down to 7500/month from 10k/month second quarter due to chip shortages and battery shortages.

https://www.cnbc.com/2021/03/02/chi...hortage-will-hit-electric-car-production.html

How the F can you not secure enough chips and batteries when you make so little volume? How will battery swapping work if they already have issues securing batteries at this volume already?

Feeling like as time goes on, all these new ev competition has their house of cards falling. Fisker pulls out of solid state, nio can't scale, and Lucid having production delays. Been telling people to becareful finding that next Tesla that doesn't exist.

 

[JupiterMan]

From a German perspective, I really like the idea of a monthly FSD fee over the $10K upfront when considering company car leasing (which is hugely popular here):

• you are taxed with a benefit-in-kind tax of 0.5% (or 0.25%) of the new car cost on a monthly basis
• so if FSD is $10K and included in the cost of the car, then I have to pay taxes on 0.5% of $10K = $50 every month
  • over a 3-year lease, which is quite common, this adds up
• if it's simply a monthly fee (such as premium connectivity), then this can simply be expensed and there are no taxes due

That is of course until the German IRS figures out that there is an income source just waiting to be exploited there....

the wonderful variance of individual markets!

For company leasing in UK it is the other way around:

• if buying FSD it is fully tax deductible over the term of the lease, so depending on tax bracket you can currently get 20%, 40% or even 60% off the capital purchase price discounted into your net lease payments
• if paying a subscription for FSD it will come out of taxed income

Many cars in UK are though company leases or individual purchases through salary sacrifice arrangements (which is what I did) - looking through my sums from last year, the net cost of adding FSD for me was £88 to my monthly lease payment, I very much doubt monthly subscription costs will be less than that, more likely at least double.