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

[Curt Renz]

https://twitter.com/x/status/1386291470840340486

 

[CLK350]

I liked Mayur’s analysis, but I question his optimism on one aspect he mentioned regarding China margin.

paraphrasing: He stated that GigaShanghai CapEx expenses were already hitting the books in q4. In Q1 since that CapEx can now be amortized or depreciated for Model Y in addition, margins should be much higher.

But my understanding is that there was basically a brand new Model Y factory in Shanghai (phase 2) and those expenses would not have been incurred back in q4 before the first Model Y’s were built (except maybe the depreciation for the land?). So if I’m correct, Model Y margins won’t be that great in Q1 because of the ramp. I’m sure they’ll be positive, but nothing like we’ll see in q2 and beyond.

Yes - and he didn't include CapEx for Berlin and Texas, or did I miss something?

 

[Knightshade]

So maybe I spent X less on fuel taxes than my neighbor but Y more on electrical tax/support for the grid. It's not an exact comparison because roads are public and the grid is private or pseudo-private, but it is a trade off.

that's... a pretty fundamental difference.

My car uses the public roads. But pays no transport taxes for fuel that are the majority of funding for those roads. The only way the state that maintains the roads collects money from me for that specific purpose is the EV registration tax (which again is significantly less than an ICE driver is paying on average in gasoline tax so the EV driver still gets a significant discount vs ICE)

Fees to maintain a private electrical grid don't help those roads at all.

We need to incentivize less pollution. EV's accomplish this, and more so when powered by sustainable energy. So let's incentivize cleaner energy generation.

We do.

It's a major reason why the vast majority of new electric generation in the US this year is going to be renewables- with solar the largest single piece (39%) and wind not far behind (at 31%).

New coal or oil fired plants are basically 0, and existing ones continue to be shut down as other things come online.

If want tax policy shifts that speed that up even further (or incentivize domestic production of solar cells or more batteries) that sounds great to me.

None of that pays to build or maintain roads though- which is primarily funded through gasoline taxes today. We need a replacement for that revenue stream as more and more vehicles don't use gasoline.



Right now most states have concluded a registration tax is the easiest/best way to try and make up for the lost gas tax revenue (and most charge a fee that's still somewhat less than the average driver in the average ICE vehicle would've paid in gas taxes).

I'm certainly open to the idea there might be even BETTER ways to insure everyone using the road contributes to maintaining it regardless of how they fuel the vehicle. But I haven't seen one suggested yet.

 

[22522]

Yes - and he didn't include CapEx for Berlin and Texas, or did I miss something?

I think he was doing a straight map/delta from Q4 numbers. If so the CapEx run rate should be similar?

 

[printf42]

View attachment 656811

Franz is giggling and wondering why it took so long for people to realize.

 

[22522]

Earth moving tax = f( weight, 0-60 time, road surface (A= asphalt, C= concrete)).

 

[CLK350]

I think he was doing a straight map/delta from Q4 numbers. If so the CapEx run rate should be similar?

Yes and no - depends on what was purchased/ installed in Q1 vs Q4 .. early in the construction it's basic infrastructure, probably less expensive than later robots, Giga Press, more machinery.. but of course it's all speculations

 

[nativewolf]

that's... a pretty fundamental difference.

My car uses the public roads. But pays no transport taxes for fuel that are the majority of funding for those roads. The only way the state that maintains the roads collects money from me for that specific purpose is the EV registration tax (which again is significantly less than an ICE driver is paying on average in gasoline tax so the EV driver still gets a significant discount vs ICE)

Fees to maintain a private electrical grid don't help those roads at all.




We do.

It's a major reason why the vast majority of new electric generation in the US this year is going to be renewables- with solar the largest single piece (39%) and wind not far behind (at 31%).

New coal or oil fired plants are basically 0, and existing ones continue to be shut down as other things come online.

If want tax policy shifts that speed that up even further (or incentivize domestic production of solar cells or more batteries) that sounds great to me.

None of that pays to build or maintain roads though- which is primarily funded through gasoline taxes today. We need a replacement for that revenue stream as more and more vehicles don't use gasoline.



Right now most states have concluded a registration tax is the easiest/best way to try and make up for the lost gas tax revenue (and most charge a fee that's still somewhat less than the average driver in the average ICE vehicle would've paid in gas taxes).

I'm certainly open to the idea there might be even BETTER ways to insure everyone using the road contributes to maintaining it regardless of how they fuel the vehicle. But I haven't seen one suggested yet.

Hear hear! ( hear, all ye good people, hear what this brilliant and eloquent speaker has to say!) no one in the EV community should be looking to be free loaders. Public roads are very expensive and fuel tax are the current means of support. We obviously need to replace a fuel tax with something and a registration fee is as equitable as anything. Further, if it is linked to the cost of the car than it can be less regressive. An inexpensive EV would have a rather moderate road tax and a Model S P or a new Toycan would pay a fairly decent chunk of change.

 

[st_lopes]

I liked Mayur’s analysis, but I question his optimism on one aspect he mentioned regarding China margin.

paraphrasing: He stated that GigaShanghai CapEx expenses were already hitting the books in q4. In Q1 since that CapEx can now be amortized or depreciated for Model Y in addition, margins should be much higher.

But my understanding is that there was basically a brand new Model Y factory in Shanghai (phase 2) and those expenses would not have been incurred back in q4 before the first Model Y’s were built (except maybe the depreciation for the land?). So if I’m correct, Model Y margins won’t be that great in Q1 because of the ramp. I’m sure they’ll be positive, but nothing like we’ll see in q2 and beyond.

First off, land is not a depreciable asset. Buying / owning land has zero impact on net income statements outside of property taxes or interest costs relating to debt used to purchase the land. Edit: I also believe Shanghai is on leased, government owned land. Any lease payments would be part of costs of goods sold or inventory.

It ultimately comes down to whether or not ANY units came off that production line in Q4 vs Q1. I believe the answer to that is yes. So, Mayur’s comments would be entirely valid.

Same reason that not having a single S/X be manufactured this quarter is actually GOOD for margins. Low volume production is a major drag on margins. Instead, all costs related to that production line would be sitting in inventory costs on balance sheet (as unfinished goods inventory).

So, much better from a reporting perspective to defer production to a period where you can get some meaningful volume so as to present better margins coming off of that production line.

 

[nativewolf]

I disagree on several points but the biggest one is the core assumption that mass advertising is a productive technique in the 21st century. We've gone over that tired issue many times in this thread but people persist in assuming that 1980's era mass advertising is useful at all.

As for the assumption that Ford is making money on Mach-e, that is a different subject with some dramatic cost accounting assumptions. Amortizing the development budget alone would probably preclude profitable sales. Ford clearly expects to eventually amortize that R&D over much higher production volumes of other models.

It will take quite some time before we can assess the Ford P&L for Mach-e.

Completely agree on ads, Tesla sells every car they can make with no ads, no need. Uber cut ad budget by 66% and saw not a single dollar in lost revenue, they have since launched ad fraud lawsuit. Advertising is about creating awareness and desire. In the current highly connected world the value of ads is very...low. Tesla is literally the hottest company name out there. There can be no great awareness. They cannot fulfill desire. Thus they could only waste company resources by doing something like paying someone for publicity. They decided they did not even need PR anymore, cut that team out as well.

 

[EVortex]

Taxes Taxes Taxes. Since government has now proven that all we need to do is print money, we no longer need no stinkin taxes.

/s

 

[2daMoon]

Taxes Taxes Taxes. Since government has now proven that all we need to do is print money, we no longer need no stinkin taxes.

/s

Old news.

The Chairman of the New York Federal Reserve revealed this in 1946. I guess nobody was listening. (no /s)

 

[CHGolferJim]

With that well-appointed a Cybertruck, I could happily live in my garage during power outages.

...pre-ordered mine too.

I woke up this morning mentally retrofitting my future CT into a camper for two. Do we know pretty closely what the internal dimensions of the back seat will be? If that row could be made into the sleeping area (platform, gel mattress, etc.), the truck bed could be used just to store stuff — clothes, camp chairs and stove, sleeping bags, golf clubs, kayak, etc. Seems like the back seat might roughly approximate the footprint of a current Model S.

 

[Snerruc]

Make it an 8-track with Peter Frampton and I'll pre-book right now!

An 8 track and C W Mc Call if it’s a road trip.

 

[Nocturnal]

Hear hear! ( hear, all ye good people, hear what this brilliant and eloquent speaker has to say!) no one in the EV community should be looking to be free loaders. Public roads are very expensive and fuel tax are the current means of support. We obviously need to replace a fuel tax with something and a registration fee is as equitable as anything. Further, if it is linked to the cost of the car than it can be less regressive. An inexpensive EV would have a rather moderate road tax and a Model S P or a new Toycan would pay a fairly decent chunk of change.

I paid more taxes last year than 10+ average families. I don't think I'm a free loader because there is one particular tax that I don't pay. Gas car owners should send me a check for the extra pollution they cause, and for the dozens of oil wars we have paid for so they aren't freeloaders then right?

 

[2daMoon]

I woke up this morning mentally retrofitting my future CT into a camper for two. Do we know pretty closely what the internal dimensions of the back seat will be? If that row could be made into the sleeping area (platform, gel mattress, etc.), the truck bed could be used just to store stuff — clothes, camp chairs and stove, sleeping bags, golf clubs, kayak, etc. Seems like the back seat might roughly approximate the footprint of a current Model S.

That is a clever idea. Slide the front seats all the way up and the back seat could be a jackknife bed that folds out the seat and back into a wide flat surface.

 

[madodel]

that's... a pretty fundamental difference.

My car uses the public roads. But pays no transport taxes for fuel that are the majority of funding for those roads. The only way the state that maintains the roads collects money from me for that specific purpose is the EV registration tax (which again is significantly less than an ICE driver is paying on average in gasoline tax so the EV driver still gets a significant discount vs ICE)

Fees to maintain a private electrical grid don't help those roads at all.




We do.

It's a major reason why the vast majority of new electric generation in the US this year is going to be renewables- with solar the largest single piece (39%) and wind not far behind (at 31%).

New coal or oil fired plants are basically 0, and existing ones continue to be shut down as other things come online.

If want tax policy shifts that speed that up even further (or incentivize domestic production of solar cells or more batteries) that sounds great to me.

None of that pays to build or maintain roads though- which is primarily funded through gasoline taxes today. We need a replacement for that revenue stream as more and more vehicles don't use gasoline.



Right now most states have concluded a registration tax is the easiest/best way to try and make up for the lost gas tax revenue (and most charge a fee that's still somewhat less than the average driver in the average ICE vehicle would've paid in gas taxes).

I'm certainly open to the idea there might be even BETTER ways to insure everyone using the road contributes to maintaining it regardless of how they fuel the vehicle. But I haven't seen one suggested yet.

Just a clarification. While fuel taxes pay for road maintenance the amount varies by state. How Are Your State’s Roads Funded? So we are all paying for our roads.

Also in Pennsylvania where I live, millions of state fuel tax dollars are used to pay for our State Police budget since a lot of cheapskate municipalities like the one I live in refuse to pay for local police or for that matter pay for our use of State Police. That said I'd be for a fair EV tax based on usage, but most I see seem to be more punitive to defend the oil companies.

 

[CHGolferJim]

That is a clever idea. Slide the front seats all the way up and the back seat could be a jackknife bed that folds out the seat and back into a wide flat surface.

Went to the CT pages here, and found the consensus is ~79” wide, so sleeping area length would be good; remaining question is how wide from edge of back seat to back of front seats. It could be a day bed for your 2nd traveler/dog, but will probably approximate the size of a twin bed.

Climate control is a key benefit to this, but the perfect solution would be a back seat that folds over and flips up vertically behind the front seats, leaving an opening into the truck bed.

 

[Pezpunk]

Agree he deserves his fun, but it feels almost certain that he's going to say something to get people into an uproar. Perhaps we should start a pool on which section of society will get upset.

i dont understand this comment or the agrees. you know the show's scripted, right? the SNL writers write the lines that he says. it's not ad-libbed.

 

[CorneliusXX]

Okay to summarize, the world is deep in the grip of a multi-year pandemic, there is wide-spread denial of the most basic science in the first world (which would solve both the health and climate crises), but we need to worry about Elon upsetting some folks?

Riiight....

I didn't say we should worry about him upsetting people...In fact I'm quite looking forward to seeing what happens, it should be entertaining.