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

2daMoon

Mostly Harmless
Nov 25, 2020
881
6,718
Terra
I have a friend who knows I'm a Tesla fan and routinely refers to Elon as "your boy" when bringing FUD to the discussion. He sent a link to an article titled "Cheap Electric Cars Won't Happen in America Until We Fix the Federal Tax Credit" which seemed to sort of offer the Hong Guang as an example of where the USA needs to be.

I responded with:

Well, cheap electric cars won't happen for a couple of years, and the most significant reason is the current level of battery production, not the tax credits. Though those will certainly help once manufacturers are actually producing vehicles. After batteries, the production volume is the next biggest problem. There is only one car company producing BEV cars in sufficient numbers to make an impact, and without tax credits they are sold out months in advance on the Model 3 and Model Y (the most affordable models) despite doubling production year over year. People are having no problems buying Teslas without tax credits as fast as they can build them.

The tax credit will help, however, it can only be applied when there is an actual vehicle produced to apply it to. The legacy OEMs need to step up to the plate if they want their share of that action.

My boy's company is tracking at or ahead of targets that were made public back in 2014 or 2016, when he stated how the company was projected to grow at a rate of 50% per year, and, that they would produce 500,000 cars in 2020. Everyone laughed at him, back then. (like they did when he said he would make reusable rockets) The laughter got kinda quiet at the end of last year when the target production reached the stated goal on time.

A couple of years back Tesla revealed plans to offer a $25K car in ~2023. It will likely be produced in China first, Texas will probably get another factory built in Austin for that model alone, as will Berlin. Each may have their own version of it designed by each country's local design teams. If the tax credit does come, this quite affordable $25K Tesla car will be a steal at $15K for a full-featured battery electric vehicle.

As opposed to the sub-standard go-kart like the Hong Guang in China. Anything like that car would fail on the US standards for safety. The top five spots at NHTSA for safest cars tested are currently held by Tesla models. Though there is the Arcimoto, if bare-bones is what the US customer is wanting.

The $25K Tesla ($15K after the proposed tax credit) ought to be a perfect example of the "Cheap electric car" that will also actually be produced in sufficient volume. This will happen with or without the tax credit.

As battery production increases, the cost of producing batteries is lowered (based upon Wright's Law), Tesla have traditionally passed that savings on to the customer. If the rate of reduced battery cost continues to follow the trend over the past five years or so, by the time that car is in production it might be sold for $15K before tax credits. Imagine a $5K full-featured BEV after applying the tax credit. Would that be cheap enough?

This aspect of how Tesla operates is why so much FUD exists in the media regarding Tesla's profitability. They put all they can back into growing the company, rather than paying share holders dividends, purchasing advertising, etc. Tesla’s mission is To accelerate the world’s transition to sustainable energy.

Consider the numbers for a little perspective. Ford is offering ~50K of the Mach-E this year, and likely about the same volume of the F-150 Lightning next year or the year after. They don't have the batteries to build more than that. The plans they have for battery production won't come to fruition until 2024 or 2025. Plus, they are grappling with the fact that every BEV they sell takes away a sale of an ICE car that they are also producing. I don't envy the old guard OEMs, they are between a rock and a hard place. Search on "Innovator's Dilemma" for a good explanation of what these OEMs face.

Tesla has 1 Million orders for the Cybertruck on the books and may deliver that many over the next two or three years while "the competition" is delivering only tens of thousands of BEV pickups. Tesla are also very likely to (mind-boggingly) double their overall production and deliveries from 2020 in 2021. The Tesla Model Y is expected to become the best selling model on the planet in the next 12 to 18 months. Not just among EVs, the best selling model of all cars.

Tesla's long-term target has always been an unbelievable 50% production growth each year, which they have consistently met or exceeded for a decade. With Austin and Berlin coming online, 2M is very likely next year as they ramp production. Once they are up to speed, those three factories could put out 2M cars per year, each. Austin and Berlin factories will have their own battery production facility on site and each of the China, German, and Texas factories total cost to build was less than either GM or Ford's annual advertising budget, and takes about a year to do. The huge building in Austin has claimed status as the largest building in the USA. I think this means they beat out USAA HQ in San Antonio for that honor.

When will Ford and GM (and all the others) bring similar BEV production numbers to the table, so that there are more vehicles for the tax credit to be used on?

Cheap Electric Cars Won't Happen in America Until The Manufacturers Build Them.
 
Last edited:

Artful Dodger

"Ducimus, lit"
Aug 9, 2018
9,305
119,215
Canada

Yeah, that's gonna leave a mark... (NASDAQ: RIDE)

RIDE.2021-06-14.08-15.png


Lucid Motors may be headed the same way.
 

Creekstalker

Member
Mar 16, 2019
195
1,866
Georgia
Just picked up our family's 1st Tesla last night, a pearl white LR Model 3. Fit and finish were flawless. The only thing I noticed was slight leakage of some kind when we got home which I'm assuming is condensation from running the AC all the way home (I'm in blazing-hot Georgia). This will be my wife's car, as she just quit her university job (sign language interpreter) to freelance, which requires a lot of driving. Her mileage checks are going to cover the payment and the safety of the M3 more than justifies the cost. We didn't go with FSD but are eagerly anticipating the button!

With both of us being (basically) educators this is a little bit of a "Tesla stretch", and there is no way I would've had the confidence to do this without the financial backstop of our TSLA investment. I've been invested since 2013, largely due to lurking and learning here. The original plan was to invest in TSLA so maybe one day we could afford a Tesla, but we can afford a bunch of them now and our kids can attend college wherever they damn well please (rather than being limited to public in-state schools). This one investment has allowed us to live comfortably above our pay grade.

Now I've just gotta start saving for my Plaid Cybertruck (reservation number is in the 113s) so I don't have to sell any chairs when the time comes. I figure I've got 18 months or so before my turn arrives.

Anyway, sorry about the text wall of non-market stuff but I figured I'd share this "mission accomplished" moment with my peeps before market open. Keeping up with the company has been fascinating and I'm addicted, but my advice to newer investors is simple: HODL. TSLA was exciting, but ultimately stagnant from 2015-2019 and I was tempted to just cut my losses at the May/June 2019 lows. Ultimately, I bought 10 more shares instead, and the gains on those shares alone are more than the sizable down payment we just put down on the new Tesla. The confidence to do that came from the Tesla community.

Anyway, thanks and please feel free to respond with any good mountain or island salespeople because we are about a 2x from that not being a joke any more.

Cheers everybody!
 

jbcarioca

Well-Known Member
Feb 3, 2015
5,451
28,023
...

Google search engine never advertised. Advertisements have negligible or no impact on the adoption of Facebook, Twitter and Windows...
True but seriously misleading in the first part. By far the leading source of GOOG income is 'sponsored links' and other 'placements'. Direct solicitation of business search related revenue is a gigantic business. Facebook and Twitter is closely related activities. Windows/Microsoft have little in common with the others from a revenue perspective. Alphabet does have Android that has a revenue stream similar to that of Windows, but the rest of their businesses are divergent.

Lastly, 'monopoly' is not appropriately used in this context. Not too long ago Microsoft seemed to have monopoly dominance in several areas including the late, not lamented Explorer. Technologies advance so very quickly that seemingly invincible leaders disappear almost overnight. Do you remember AOL? Alta Vista? Yahoo? Vestiges of all three still, more or less, exist. All three were considered invincible.

Consider the timeline of search engines alone. Courtesy of wiki:

Elon has repeatedly said that 'moats don't exist'. Simply his dedication to rapid evolution is the only conceivable source fo continuing success.
Monopolies really no longer much exist, even when they are seemingly defined purposely. Think of Post Offices. Think of Telephone Companies.

We really need to avoid using terminology that doses no longer have practical relevance: The first two words that should not be used are: 'advertising' and 'monopoly'. Both are nearly obsolescent, along with 'imperial measures' yielding to 'metric' and 'kingdoms' yielding to 'republics'. Clearly, 'nearly obsolescent' is NOT equal to 'extinct'.

Thus broadcast TV plus local and national, even supranational advertising still exists. The famous Super Bowl is a case in point. Kingdoms do too.

We'll all do much better with each other if we use our vocabulary carefully.

Most of us are wild enthusiast for TSLA, as am I. Being so does not suggest we can ignore reality. There are risks, some very large ones. The better we understand those the more realistic we can be in assessing how TSLA can surmount those risks.

Just consider how much market share Tesla has in any given stronghold compared to every other competitor. Take Norway, or even Atherton, California, USA. Then consider that Tesla sells almost nothing at all in most parts of even places with high Tesla density. Those are great opportunities and great risks.
 

Krugerrand

Enough of the 🐩, back to 🐈‍⬛
Jul 13, 2012
11,260
59,488
Tesla friendly place
I have a friend who knows I'm a Tesla fan and routinely refers to Elon as "your boy" when bringing FUD to the discussion. He sent a link to an article titled "Cheap Electric Cars Won't Happen in America Until We Fix the Federal Tax Credit" which seemed to sort of offer the Hong Guang as an example of where the USA needs to be.

I responded with:

Well, cheap electric cars won't happen for a couple of years, and the most significant reason is the current level of battery production, not the tax credits. Though those will certainly help once manufacturers are actually producing vehicles. After batteries, the production volume is the next biggest problem. There is only one car company producing BEV cars in sufficient numbers to make an impact, and without tax credits they are sold out months in advance on the Model 3 and Model Y (the most affordable models) despite doubling production year over year. People are having no problems buying Teslas without tax credits as fast as they can build them.

The tax credit will help, however, it can only be applied when there is an actual vehicle produced to apply it to. The legacy OEMs need to step up to the plate if they want their share of that action.

My boy's company is tracking at or ahead of targets that were made public back in 2014 or 2016, when he stated how the company was projected to grow at a rate of 50% per year, and, that they would produce 500,000 cars in 2020. Everyone laughed at him, back then. (like they did when he said he would make reusable rockets) The laughter got kinda quiet at the end of last year when the target production reached the stated goal on time.

A couple of years back Tesla revealed plans to offer a $25K car in ~2023. It will likely be produced in China first, Texas will probably get another factory built in Austin for that model alone, as will Berlin. Each may have their own version of it designed by each country's local design teams. If the tax credit does come, this quite affordable $25K Tesla car will be a steal at $15K for a full-featured battery electric vehicle.

As opposed to the sub-standard go-kart like the Hong Guang in China. Anything like that car would fail on the US standards for safety. The top five spots at NHTSA for safest cars tested are currently held by Tesla models. Though there is the Arcimoto, if bare-bones is what the US customer is wanting.

The $25K Tesla ($15K after the proposed tax credit) ought to be a perfect example of the "Cheap electric car" that will also actually be produced in sufficient volume. This will happen with or without the tax credit.

As battery production increases, the cost of producing batteries is lowered (based upon Wright's Law), Tesla have traditionally passed that savings on to the customer. If the rate of reduced battery cost continues to follow the trend over the past five years or so, by the time that car is in production it might be sold for $15K before tax credits. Imagine a $5K full-featured BEV after applying the tax credit. Would that be cheap enough?

This aspect of how Tesla operates is why so much FUD exists in the media regarding Tesla's profitability. They put all they can back into growing the company, rather than paying share holders dividends, purchasing advertising, etc. Tesla’s mission is To accelerate the world’s transition to sustainable energy.

Consider the numbers for a little perspective. Ford is offering ~50K of the Mach-E this year, and likely about the same volume of the F-150 Lightning next year or the year after. They don't have the batteries to build more than that. The plans they have for battery production won't come to fruition until 2024 or 2025. Plus, they are grappling with the fact that every BEV they sell takes away a sale of an ICE car that they are also producing. I don't envy the old guard OEMs, they are between a rock and a hard place. Search on "Innovator's Dilemma" for a good explanation of what these OEMs face.

Tesla has 1 Million orders for the Cybertruck on the books and may deliver that many over the next two or three years while "the competition" is delivering only tens of thousands of BEV pickups. Tesla are also very likely to (mind-boggingly) double their overall production and deliveries from 2020 in 2021. The Tesla Model Y is expected to become the best selling model on the planet in the next 12 to 18 months. Not just among EVs, the best selling model of all cars.

Tesla's long-term target has always been an unbelievable 50% production growth each year, which they have consistently met or exceeded for a decade. With Austin and Berlin coming online, 2M is very likely next year as they ramp production. Once they are up to speed, those three factories could put out 2M cars per year, each. Austin and Berlin factories will have their own battery production facility on site and each of the China, German, and Texas factories total cost to build was less than either GM or Ford's annual advertising budget, and takes about a year to do. The huge building in Austin has claimed status as the largest building in the USA. I think this means they beat out USAA HQ in San Antonio for that honor.

When will Ford and GM (and all the others) bring similar BEV production numbers to the table, so that there are more vehicles for the tax credit to be used on?

Cheap Electric Cars Won't Happen in America Until The Manufacturers Build Them.
But do you think he read past the first paragraph?
 

Prime_Number

Member
Apr 7, 2019
41
451
North America
Re: Tesla Annual Shareholders Meeting

Recently Elon said that the meeting this year would take place at the end of July or in August. Last year they announced the meeting on August 21rst for September 22nd. Exactly a month prior.

That means we should get an announcement very soon. We should also get notice if they will be asking for approval to increase the number of shares they are able to issue. We might get a signal of a potential stock split in the next 2 to 4 weeks !
 

Krugerrand

Enough of the 🐩, back to 🐈‍⬛
Jul 13, 2012
11,260
59,488
Tesla friendly place
I thought Lucid had access to Saudi deep pockets?
Recent report posted here is that the Saudi money is about out and Lucid needs the SPAC money to proceed.

No way to know it’s true just yet, but I’d not be the least bit surprised and it’s well within the realm of expectation given what we know about Tesla’s beginnings and how expensive it is to start a new car manufacturer. Plus, I’m quite positive that Rawlinson and team aren’t half as capable as Elon and team, the latter almost didn’t make it and to this day continue to put extraordinary attention into cost cutting efficiencies across the board.
 

elasalle

driVIN(188xx) it !!
Jan 26, 2016
4,446
25,085
VA
I thought Lucid had access to Saudi deep pockets?


CCIV shareholders will own a minority interest in Lucid Motors (19.1%). So, it’s worth taking a closer look at the company’s ownership structure and governance. Saudi Arabia’s sovereign wealth fund, or Public Investment Fund (PIF) will own approximately 62% of the company once the acquisition is complete
 

Chenkers

Member
Apr 28, 2019
397
4,383
Melbourne, AU
An interesting thread from Sawyer yesterday that I haven't seen mentioned fully. This was originally sourced from Troy's Patreon (and apparantly shared with permission):


I won't post the whole thread but basicially the main points are:

1. China exports of Model Y to Europe from Q3
2. Model S Plaid will be exported to Europe in October.
3. Tesla is still planning to shut down Model Y production at Fremont when Giga Texas starts making the Model Y 2.0. However, they are now considering whether the shutdown will be temporary or permanent.
4. Texas Model Y will be slightly different than the Berlin version.
5. Model Y production in Shanghai has a Build Failure Rate of less than 3% which is exceptionally low in the industry. The target for Model Y 2.0 in Berlin is less than 2%.

The first and seconds points I think I'd heard about earlier. The suggestion that Tesla would shutdown Y production in Fremont is new to me but does make some sense given the differences. However there would be some overlap until Austin can ramp enough to replace Fremont capacity.

I would also add to this that I suspect Shanghai will also start making a Model Y2.0 around a similar time to Austin. This may just be in the form of front and rear castings as the current works are roughly doubling the existing casting area. Initial batteries may not be structural and may have to wait until CATL can build their new factory or Tesla can source their own.
 

jbcarioca

Well-Known Member
Feb 3, 2015
5,451
28,023
It is also suggesting China production is going well.

Q3/Q4 they can always export more overseas, plenty of untapped denand especially for Model Y.

Tesla China has typically been good at marketing and customer engagement.
My impression of China is that most messages are spread by social media, or having promotional events.
Does China have traditional advertising?
A lot of the media is government owned and funded.

We need someone with local knowledge to comment.
I might be said to have limited knowledge of Chinese marketing. Despite that a Chinese tech firm is the largest single client for my colleagues, so I am fairly well informed about Chinese tech practices.
Neither Tesla nor most Chinese techs do conventional advertising.
Chinese social media and 'social media influencers' (almost but not quite exactly 'celebrities' although that is a usable term) are hugely important.
Tesla China has legions of such influencers and social media groups that are vastly more influential than is TMC. Why? Because they gain huge audiences that are not primarily connected with Tesla already.
Similarly, many other competitors also use similar techniques. It is those that frequently spread one sort of FUD or another. Tesla China has thus far been extraordinarily effective in combatting such FUD.

The realities are also deeply local and regional as are regulations and incentives in several important categories.

Having been fairly deeply into all this on behalf on that client I will assert that the Tesla China circumstances reflect an unusually mature and disciplined approach. It is not accidental that, apart from some technologies and designs Tesla China operates as a Chinese company, not an import.

Discussion of this issue would require volumes.

As an aside, since my first China business trip in 1978 and ever since I am constantly reminded how little I know. That is not false modesty. China is not only the most populous country on earth, it is also one of the most diverse. Those who think in monolithic terms cannot even begin to understand at themes superficial level. Such things as driving permits in cities are locally decided. It is a trifle difficult to understand that when the most widely sold BEVs are thus far totally unregulated almost everywhere, not requiring licenses for the vehicle nor even the drivers. That is only one of the many ways that "the Chinese car market" is itself a bit of a misnomer, a bit like 'the European car market' or the 'North American car market'.
 

ZeApelido

Active Member
Jun 1, 2016
3,161
26,226
The Peninsula, CA
Re: Tesla Annual Shareholders Meeting

Recently Elon said that the meeting this year would take place at the end of July or in August. Last year they announced the meeting on August 21rst for September 22nd. Exactly a month prior.

That means we should get an announcement very soon. We should also get notice if they will be asking for approval to increase the number of shares they are able to issue. We might get a signal of a potential stock split in the next 2 to 4 weeks !

Any guesses for day of the month?

I'm guessing 2, 3, 5, 7, 11, 13, 17, 19, 23, 29, or 31.
 

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