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

[Jack6591]

Advertising, like any other endeavor, can be and it can be extraordinary.

 

[Creekstalker]

So far Tesla has enjoyed word of mouth, but quite sure they have lost a few customers due to slick advertisements.

Which cars was Tesla unable to sell due to this?

 

[henchman24]

Which cars was Tesla unable to sell due to this?

Not sure if that is the right question to be asking. To me it isn't about sales or not, it is about margin on those sales. I don't think that skews towards advertising right now. Not enough volume and there is some pricing pressure with VW and Ford having the credit on their side. Plus Tesla is cutting everything to the bone to have good margins. When we get into the multi millions of sales, $50 per car might actually have a large return.

 

[Etna]

Just posted on Tesla Youtube channel:

 

[Buckminster]

So I am one of the many with options expiring this week. Bought 2 years ago and makes up more than half of my portfolio. Planning to sell half so that I can exercise the other half. Don't want to leave it too late as I am not used to this trading malarkey. You can thank me in advance for a SP rise following my deleveraging...

 

[JustMe]

Just posted on Tesla Youtube channel:

Ooh - nice Ad!

 

[Unpilot]

So I am one of the many with options expiring this week. Bought 2 years ago and makes up more than half of my portfolio. Planning to sell half so that I can exercise the other half. Don't want to leave it too late as I am not used to this trading malarkey. You can thank me in advance for a SP rise following my deleveraging...

Two years ago!?! Those have to be some DEEP in da money options...no?

 

[MartinAustin]

It's not just about too many people waiting for Plaid+ over Plaid, but about people then waiting for a 4680 Model Y vs a 2170. That would not be good. If Tesla announces 4680's are almost here, Model Y orders might slow down.

Customers have no choice. There's no way to specify which factory you get your Model Y from.

I'm going to make a rough suggestion: consider a straight line drawn between El Paso TX and Gary, IN. If you live on the left-hand side of that line (including residents of Chicago) you get your Model Y from Fremont. If you live on the right-hand side of that line, you get your Model Y from Austin. The exact nature of the divide is up to Tesla, who will take numerous factors into consideration and no doubt keep it all a secret.

 

[ZachF]

Just posted on Tesla Youtube channel:

Ultimately the reason why I invest in Tesla:

If you were going back in time to the 1950s or 60s and had to bring back a car to "show off" what 2021 cars are like, you'd be embarrassed to bring anything other than a Tesla, right?

 

[Stretch2727]

Elon Musk is selling his last house in California. It's in Hillsborough.

If any of you own > ~ 60,000 shares of TSLA, you could buy it for me as a nice Father's Day gift.

891 Crystal Springs Rd, Hillsborough, CA 94010 | Zillow

Zestimate® Home Value: $30,000,000. 891 Crystal Springs Rd, Hillsborough, CA is a single family home that contains 16,000 sq ft and was built in 1916. It contains 7 bedrooms and 10 bathrooms. The Zestimate for this house is $31,659,000, which has increased by $348,967 in the last 30 days. The...

www.zillow.com

For sale by owner as well.

I guess Elon does not want to pay out a few million to a real estate agent.

 

[traxila]

So I am one of the many with options expiring this week. Bought 2 years ago and makes up more than half of my portfolio. Planning to sell half so that I can exercise the other half. Don't want to leave it too late as I am not used to this trading malarkey. You can thank me in advance for a SP rise following my deleveraging...

I have as well with a strike price of 84. Paid 16 for them. I was planning on carrying them on margin. The account is in cash right now it will not use much margin.

Is that an option for you to carry it on margin?

 

[Beltsbear]

Which cars was Tesla unable to sell due to this?

Advertising, is used to sell cars you would not otherwise (not a Tesla problem) or to increase profit margins by selling higher trims and more expensive cars. It can also change the perception of an entire company, which can be quite valuable in the future. I do not feel that Tesla should be like other makers and spend $2000 per car in advertising. That would be silly. Nor do I think they should buy superbowl ads. I think Tesla should pick the low hanging fruit, and run just a few ads, probably a total spend of no more then $50 per car. If Tesla made a single ad per year, and spend a few million running it, OTHERS would talk about it, run it as part of news segments and spread it on social media. Tesla would get 10x the exposure you would get from a paid ad. Again, low hanging fruit.

The message could simply be for the Halo cars, or it could be about the #1 safety only. There are a million good ideas out there. Done properly, margins would improve.

 

[M|S|M MYP]

Here's some free advertising:

The problem here is Diess forgot to mention that the model 3 had given the VW bug a 2 day head start....

 

[MountainRatMat]

TL;DR - The Tesla product and manufacturing innovation/efficiency lead continues to grow. My thoughts on why Tesla continues to extend its lead with every new 'competition' product launch.

All other things are a short term distraction for investors.

I've written this for the TMC investor thread community; not for public consumption as there is too much context for n00bs. Yeah, I'm a bull, but I feel I'm a very informed, tech engineer, turned product manager, first principles bull.

The best, most reliable, my 'go-to' sources for information on Tesla continue to be (I'm not associated with them, they are my heroes however):

• Dave Lee @ Dave Lee on Investing - amazing insights abound
• Rob @ Tesla Daily - all things financial
• Jordan @ The Limiting Factor - all things battery
• Sandy @ Munro Associates - *nearly* all things vehicle production (software, ECU, custom chips need some work, luv ya Sandy!)
• Zac and Jesse @ Now you Know - super informative, super funny

Much longer version below...


While most or maybe even all of us know that some EV competition is 'coming' (Rivian, Lucid, NIO...etc), we also know, most at at an arms length, that it is really hard to bring to mass production, taking years to ramp, needing the best engineers, visionary leadership and the capital to keep the gears turning. Any one of these things not fully onboard and or operating efficiently will most likely spell doom at worst or at best cause such a lag as to not be competitive when the product is announced to launched.

We also know, from even the most recent product launches of competition that there are marketing, pent up demand or 'fanboy' purchasing for a quarter or even longer if their are government incentives, then come the dealer incentives and once those run out, the product seemingly goes into life support.

You don't need to look any farther than Tesla's software lead, but when you do you see so much more. Many more insurmountable moats that continue to grow. Underneath software is firmware, then custom ECU's, then custom ASIC's or state of the art chips like the new graphics in the S (not industry standard). These power the entire car and enable to the engineering playground to quickly iterate and enable the most advanced features of any product (not exclusive to autos). Even with my time at Tesla and working on BIOS at Dell and XBOX, I'm absolutely floored that Cyberpunk 2077 at 60fps is playable and appears smooth on the S. It is such an amazing achievement and speaks volumes to their engineering prowess and vision. This is also the tip of the tech iceberg as Sandy continues to discover in his teardowns that Tesla has such a huge lead on HVAC innovations (Octovalve), IDRA gigpress chassis, structural batteries, BMS, motors, inverters, gearboxes...etc (the list is so long). For instance, how many OEM's make their own body controls ECU's? or even know how to swap out a bootloader in the field? (I'd guess none as none have ever demonstrated it or even talked about implementing features which would demonstrate it).

I've been an investor for over 10 years now, been through several valleys, seen some ATH mountaintops and never once thought that competition is at Tesla's doorstep. When the S launched in 2012 I thought OEM's would, out of sheer fear, start reverse engineering and then start production of their own EV optimized chassis and all the other necessary engineering to 'catch up'. This effectively didn't happen and was evident when Porsche released the Taycan. A great effort, but sorely lacking in so many areas that it is a testimonial to how a formerly leading OEM has been put to task and failed to deliver product/marketplace competition. Their product is beautiful, track worthy and that's where it ends as it is also less efficient, much more expensive and has serious issues at the software and firmware side (this is at a glance; so their might be more. I'll wait for the Sandy teardown if one such should happen).

My bias shows as I believe that all other competitors either in production or announced with specifications available are simply a feeble attempt at marketing hype. This includes the Lightning which I wish and hope will be better when launched, but I just don't see how a car with a huge mechanical button on it's beautiful, large LCD screen will have good, industry leading tech underneath it. Huge sigh. Rivian is so darn close, I hope they can find a niche, but that is all they will get is a tiny fraction and it looks like a great product, but lacks many specifications that are key. I'm very cautious to say it will compete.

Let's never forget that traditional OEM's have huge 'boat anchors' holding them back from even keeping up with Tesla's pace of innovation

• Tesla has no appreciable/material marketing, in any country, while selling every car it makes (low # of days of inventory).
• Tesla will effectively double it's manufacturing footprint next year
• Tesla innovates at every level of form, fit and function as well as the creation and production of these innovations
• Tesla attracts the best talent
• Tesla has no ties to dealerships
• Tesla has no ties to gas
• Tesla soon, maybe currently, will take to production, it's own batteries from scratch (4680 Kato outputs)
• Tesla has long term contracts for raw battery materials

To conclude, there have been 2 major events in the timeline of Tesla that have gone so underappreciated, or better to say, way over the heads of investors, that it is astounding.

• Tesla Autonomy day with custom inference and training chips
• Tesla Battery day with structural batteries and so much more that it makes my head spin

and on the horizon will be Tesla AI day. Which I'd bet will also be very hard to understand for the investor community. How many know about GPT3? How many know about BERT? Inception v3? We have yet to see any fruits of the Dojo labor and hopefully are on the cusp of experiencing FSD beta with 3D labeled training data.

It speaks volumes that not only does Tesla make the most performance minded, fastest accelerating cars on the market, but they are also the safest ever made, most tech advanced, consistently getting industry revolutionizing software updates OTA and are the cheapest to maintain/operate making them a seemingly brain-dead value decision when considering 5 year TCO. This has never happened in modern times or ever. Any why would it? No car company has ever had a vision like Tesla.

Would you rather have a Model 3 or Honda Civic or name any other car? Oh and the Civic (other car) is more money over 5 years (TCO). Hmm, lets see. Objectively, Tesla is materially better in all the ways that matter to consumers and they can only find out if they 'search it up' on the intertubes or ask around. This will reign true for years to come. Thanks for reading!

While I am in complete agreement with what you wrote I think you missed a huge reason that Tesla is successful. The charging network.

Everyone else is piggybacking on some other company, Tesla took this in to their own hands and has essentially solved the problem.

I really like some of the other offerings coming out but would never buy another brand because of the charging network.

Elon said Tesla doesn't have moats, just faster innovation, he was wrong, the charging network is Tesla's moat.

 

[ABCTG]

So I am one of the many with options expiring this week. Bought 2 years ago and makes up more than half of my portfolio. Planning to sell half so that I can exercise the other half. Don't want to leave it too late as I am not used to this trading malarkey. You can thank me in advance for a SP rise following my deleveraging...

Ah, was wondering why there were so many open options at these strike prices.
Congrats! and you probably are one of many, and I'm thinking that it could be a factor in holding down SP price,
but I don't know enough about that to say for sure.

TSLA Jun 18 2021 4 Days to Expiration

Open interest;

11,000 @ $68

10,500 @ $110

16,000 @ $400


*edited to add that the $68 and $110 options were most likely purchased pre-split.

**edited to add that there may also be many who purchased those LEAPS and aren't totally option savvy, hopefully they will have a plan for what to do before expiration. (exercise, roll, sell)

 

[EVMeister]

Elon said Tesla doesn't have moats, just faster innovation, he was wrong, the charging network is Tesla's moat.

I believe Elon said moats are lame, not that Tesla didn't have them.

 

[Curt Renz]

Today TSLA closed nicely above its 200-day SMA (simple moving average) of $610. If this continues, it could be a welcome technical sign.

 

[SN_8]

For sale by owner as well.

I guess Elon does not want to pay out a few million to a real estate agent.

Yep. I'm using the Zillow form to contact seller.

 

[Queeg500]

Advertising has been discussed to death many times.
There are 2400 posts if you search for “should tesla advertise”.
Please stop.

 

[Watts_Up]

Advertising, is used to sell cars you would not otherwise (not a Tesla problem) or to increase profit margins by selling higher trims and more expensive cars. It can also change the perception of an entire company, which can be quite valuable in the future. I do not feel that Tesla should be like other makers and spend $2000 per car in advertising. That would be silly. Nor do I think they should buy superbowl ads. I think Tesla should pick the low hanging fruit, and run just a few ads, probably a total spend of no more then $50 per car. If Tesla made a single ad per year, and spend a few million running it, OTHERS would talk about it, run it as part of news segments and spread it on social media. Tesla would get 10x the exposure you would get from a paid ad. Again, low hanging fruit.

The message could simply be for the Halo cars, or it could be about the #1 safety only. There are a million good ideas out there. Done properly, margins would improve.

Tesla spend some $(?) on each car to build the Supercharger network instead of burning $ on advertisements.

Word of mouth is certainly a very good advertisement tool.