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

[johnm6875]

Cybertruck Truck Guy
In this video he presents a compelling rational for why Tesla should stop selling 'Full Self Driving' (FSD) as a lump sum option and instead offer it using a tiered subscription model based on a 'pay per mile' pricing. This would generate recurring revenue and provide an easy path to licensing to other manufactures.

 

[EVWatcher]

I think we can all decide on our own what is funny, and not funny, without moderation help. That is why they make a zillion ice cream flavors, different strokes, different folks. As for a 'bot' picking it up and running with it, well so what? One could argue that disinformation helps out the long-term investor, allowing to accumulate more shares, while the truth ultimately will prevail. This is especially true, now that Tesla is far beyond the risk of bankruptcy.

People come here to be informed. Not misled. The world has enough misinformation in general already. If this place becomes littered with BS I’m out and not coming back.

 

[MC3OZ]

If it was software related why wouldn't they just start producing cars and park them somewhere until the software was ready? They are clearly not.

The probably didn't want to produce a lot of cars in Q1 that they couldn't deliver until Q2/Q3.

I popped over to the Model S forum, many posters have a July delivery date.

The hold up could be many things, software, parts, technology, tooling etc, But IMO the Model S/X Refresh is significant, they are trying a number of new technologies and hitting some issues getting it all working or getting parts in sufficient volumes.

I'll be surprised if it is a simple production error that they should have solved weeks ago, of the list above, software and parts are by far the mostly likely things that could have gone wrong. Software is all down to Tesla, parts could ne an issue with suppliers.
Technology wise Plaid drive is new and innovative as a hold up there would not stop them delivering LR versions, it is less likely to be the issue.

What this shows is this was the right time to the the Model S/X Refresh, any earlier may have been even more risky.

Tesla is now better at basic manufacturing processes than there were 2-3 years ago and way better than they were in 2012. I'm not seeing a strong case that the rest of the industry is better. While customers with orders are getting frustrated, it is too late to do much about that now.

As we don't know what the problem is, we don't know if Tesla should have anticipated it. But it does fit the pattern of being a software problem, software projects can seem like they are on schedule then hit issues. If it is software, proving V11 in Model S/X first, before wider deployment makes some sense. Having Model S/X depending on V11 and not supporting the new models in V10 makes sense.

Making a bunch of cars only to stockpile them for 2-3 months might not make sense.

 

[loquitur]

I don't know about that - The market is awarding Tesla a $663 Billion market cap, which is ~10x the value of most of the incumbents (and higher than all of them combined IIRC). To me that signals that the market is not in the "denial" stage about Teslas lead at all, and in fact is very optimistic about Teslas future. It's just that the markets collective very optimistic view of Tesla is quite a bit less than the uber optimism of Tesla bulls.

However, I was taught that the "value" of a company is more aligned with its enterprise value
than its market capitalization.
There's a spreadsheet running around (Top 25 Automakers by Market Cap)
showing that Tesla's "EV" is less than double that of Toyota, not much more than double VW,
and about 4X that of GM or Ford.

Further, Tesla's business encompasses more than just auto manufacturing in a "pure play" green milieu,
i.e. storage + solar. That plus Tesla's higher profit margins + plus higher growth rate helps express the outsized difference. Perhaps the trad auto companies should spin off (or make tracking stocks for) their electric car business.

 

[phantasms]

I don’t know anything but FWIW I think there’s a Strong connection between the S & X delay and the fact we haven’t had a real software update in a long time. I think the FSD stuff is going to get real very soon. Something like 5 weeks until the subscription service hits. That’s going to be stupid huge. Since I’m in it [2018] this is by far the longest we’ve ever gone without a real serious software update. I think the new S and X for whatever reason rely on the next major wave of software to hit which relies on a decently functioning FSD. These things will all hit in succession and it’s going to be a serious jurassic park guy taking glasses off situation. I could certainly see Elon putting the pressure on the software side by essentially setting it up that the refreshed cars don’t roll until they fix XYZ. It’s insane but it’s why Tesla wins and no one else has a shot at really competing.

I usually sell covered calls but haven’t been lately. Maybe it’s just all the Koolaid I’ve been drinking but I think the next 18 months will be non-stop extreme domination.

 

[Electrifying]

However, I was taught that the "value" of a company is more aligned with its enterprise value
than its market capitalization.

Great insight! From the spreadsheet, GM's market cap is $89B but its EV is $165B, which means GM has tons of debt and other obligations. And Toyota's EV is $350B, so Tesla is valued less than twice of Toyota's value.

 

[MaxPain]

FWIW I ordered a long range model S last week and they estimated a May-June delivery. Also most likely getting a traditional steering wheel.

 

[Thekiwi]

However, I was taught that the "value" of a company is more aligned with its enterprise value
than its market capitalization.
There's a spreadsheet running around (Top 25 Automakers by Market Cap)
showing that Tesla's "EV" is less than double that of Toyota, not much more than double VW,
and about 4X that of GM or Ford.

Further, Tesla's business encompasses more than just auto manufacturing in a "pure play" green milieu,
i.e. storage + solar. That plus Tesla's higher profit margins + plus higher growth rate helps express the outsized difference. Perhaps the trad auto companies should spin off (or make tracking stocks for) their electric car business.

Excellent spreadsheet link - thanks for that!

On Enterprise Value, most of these car makers the enterprise value is mostly due to their finance divisions debt. Debt raised to finance customer purchases/leases is very different from debt raised to support operations/capex, but AFAIK enterprise value calculators don't differentiate between the two.

As an example to how this distort things, consider the following hypothetical example:

Steve runs a business that sells 100 widgets annually at $10,000 a piece, for total of $1 million in sales. Steve makes $200k in net profit, and his company is listed and has a market cap of $2 million (10x earnings for this no growth business). The enterprise value is $2 million as there is no debt and minimal cash on hand.

Steve discovers that most of his customers take out loans to buy his widgets, and decides that to make things easier he will offer financing to all his customers.

After 12 months Steve has sold 100 widgets on finance for $10,000 a piece, and now has $1 million in debt on the books. The customer payments cover the interest costs and the company still makes $200k in net income and still has a market cap of $2 million. However because there is now $1 million in debt on the books, the enterprise value is now calculated at $3 million.

So is the enterprise value a good measure of this companies value, given its jumped 50% despite no change in fundamentals? (arguably its in a much more precarious position as it now has the added risk of customers defaulting on debt)

 

[SunCatcher]

AH OT:

Tesla Cybertruck will have so many uses!

CyberTruck + CyberLandr = Ultimate Adventure Vehicle​

Well, in the olden days, we had VW Buses, and Westfalia of Germany made the camper pop tops and interiors. Now, in anticipation of the Tesla Cybertruck, we have this outfit getting ready to go to help us get the most out of our off road camping experiences;

Home | CyberLandr

www.cyberlandr.com

 

[Todd Burch]

I don't know about that - The market is awarding Tesla a $663 Billion market cap, which is ~10x the value of most of the incumbents (and higher than all of them combined IIRC). To me that signals that the market is not in the "denial" stage about Teslas lead at all, and in fact is very optimistic about Teslas future. It's just that the markets collective very optimistic view of Tesla is quite a bit less than the uber optimism of Tesla bulls.

Why do you compare Tesla to other automakers?

Other automakers don't have autopilot.
Other automakers don't have Powerwalls.
Other automakers don't have Powerpacks.
Other automakers don't have Solar roof.
Other automakers don't own their own fueling infrastructure.
Other automakers aren't anywhere near as vertically integrated.
Other automakers are way behind Tesla's software capabilities.
Other automakers don't have frequent over-the-air updates.
Other automakers don't produce their own batteries.
Other automakers don't have the advanced cell technology that Tesla has.
Other automakers don't run their own insurance.
Other automakers don't own their own sales and service centers.
Tesla leads on the technology front.
Tesla leads on the efficiency front.
Tesla leads on the $/kWh front.

I can probably keep going, but comparing Tesla to other automakers, for the above reasons and more, is obviously not a good comparison.

 

[AudubonB]

I think we can all decide on our own what is funny, and not funny, without moderation help. That is why they make a zillion ice cream flavors, different strokes, different folks. As for a 'bot' picking it up and running with it, well so what? One could argue that disinformation helps out the long-term investor, allowing to accumulate more shares, while the truth ultimately will prevail. This is especially true, now that Tesla is far beyond the risk of bankruptcy.

~~~This thread is NOT going to become the refuge for those who write the positive analog of the naysaying doomsterville mischievous cretins who for a dozen years have been poisoning the well with their lies and worse, half-truths. If you want to post half-truths or whoppers - do it somewhere else. And if you think that posting, let's say tzventzysousand of whatever is a kneeslapper, it is not your sophomoric sense of humor that offends me but what I wrote before, and of which another poster placed specific examples of the results: that gets disseminated!

And THAT is "so what".~~~

 

[buttershrimp]

Or, those with the other half of that brain cell might start saying "USA" or "United States of America" instead of assuming "everyone" knows that one childishly excludes most of the Americas when using the term America to only describe the USA. This is precisely the reasoning that led to the term "Ugly American" being coined.

Well, Circuit of the Americas is right next to Texas Giga Factory so I’m pretty sure there is only one America... and it just so happens it exists only in Austin, Texas. Every other so called American need not apply until they own an F1 track and a starlink,neuralink,boring co, and Tesla factory. God bless the USAustinmerica

 

[lafrisbee]

AH OT:

Tesla Cybertruck will have so many uses!

CyberTruck + CyberLandr = Ultimate Adventure Vehicle​

Well, in the olden days, we had VW Buses, and Westfalia of Germany made the camper pop tops and interiors. Now, in anticipation of the Tesla Cybertruck, we have this outfit getting ready to go to help us get the most out of our off road camping experiences;

Home | CyberLandr

www.cyberlandr.com

View attachment 651511

6x HummerEV sales to every one of these. I have never seen anything as poorly engineered, designed, thought out, or constructed.

 

[buttershrimp]

AH OT:

Tesla Cybertruck will have so many uses!

CyberTruck + CyberLandr = Ultimate Adventure Vehicle​

Well, in the olden days, we had VW Buses, and Westfalia of Germany made the camper pop tops and interiors. Now, in anticipation of the Tesla Cybertruck, we have this outfit getting ready to go to help us get the most out of our off road camping experiences;

Home | CyberLandr

www.cyberlandr.com

View attachment 651511

No bidet? I’m out.

 

[lafrisbee]

WoooHOO!
We went up .57 today, and then Straight to the Moon in after hours by going up almost and additional 120%! (.68)

 

[FireMedic]

6x HummerEV sales to every one of these. I have never seen anything as poorly engineered, designed, thought out, or constructed.

Never?

It’s not for everyone, in fact, I’m not a big fan of it myself. But many seem to really be excited about it.

 

[insaneoctane]

AH OT:

Tesla Cybertruck will have so many uses!

CyberTruck + CyberLandr = Ultimate Adventure Vehicle​

Well, in the olden days, we had VW Buses, and Westfalia of Germany made the camper pop tops and interiors. Now, in anticipation of the Tesla Cybertruck, we have this outfit getting ready to go to help us get the most out of our off road camping experiences;

Home | CyberLandr

www.cyberlandr.com

View attachment 651511

It’s innovative....

 

[Thekiwi]

Why do you compare Tesla to other automakers?

Other automakers don't have autopilot.
Other automakers don't have Powerwalls.
Other automakers don't have Powerpacks.
Other automakers don't have Solar roof.
Other automakers don't own their own fueling infrastructure.
Other automakers aren't anywhere near as vertically integrated.
Other automakers are way behind Tesla's software capabilities.
Other automakers don't have frequent over-the-air updates.
Other automakers don't produce their own batteries.
Other automakers don't have the advanced cell technology that Tesla has.
Other automakers don't run their own insurance.
Other automakers don't own their own sales and service centers.
Tesla leads on the technology front.
Tesla leads on the efficiency front.
Tesla leads on the $/kWh front.

I can probably keep going, but comparing Tesla to other automakers, for the above reasons and more, is obviously not a good comparison.

I agree with all your points. I just disagree a little with the idea that the market doesn't include most of this in the current valuation.

 

[Curt Renz]

Let’s not have that silly argument of what defines America. Clearly in this instance a government is subsidizing domestically made products of a green energy market to help grow domestic industry and jobs.

I realize some people get hot and bothered about how citizens of the United States take ownership of the adjective “American” to exclude countries that people in other places think are also American. But that’s clearly not the intent of the rebate or the conversation. Bringing up this argument in this context is just disingenuous. Go find a forum discussion that somewhere else.

 

[S3XY]

AH OT:

Tesla Cybertruck will have so many uses!

CyberTruck + CyberLandr = Ultimate Adventure Vehicle​

Well, in the olden days, we had VW Buses, and Westfalia of Germany made the camper pop tops and interiors. Now, in anticipation of the Tesla Cybertruck, we have this outfit getting ready to go to help us get the most out of our off road camping experiences;

Home | CyberLandr

www.cyberlandr.com

View attachment 651511

Hmm. I was hoping for a better implementation.

Edit: Actually, after reading about all the features it sounds a bit more intriguing.