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

[JRP3]

Can't say I was that impressed with the new update. Gali seems a bit nervous but it looks as if the car didn't see the huge concrete monorail posts at 17:18

 

[NicoV]

What many don't realize is that the demand limit has a HUGE buffer built in to it, namely that a large portion of new car buyers will not buy a car until it is sitting in front of them. This means, a small stock of cars ready to buy at any given delivery center increases demand such that they WILL be sold - it just takes a few more days to match the vehicles with buyers.

That is probably a very North-American point of view. In Belgium (and most likely the rest of Europe) most cars are built-to-order. I’m not sure about how this works in the rest of the world.

 

[kbM3]

The problem with this logic is that it ignores what happens when major disruptions happen. For reference:
Ford Motor Company 1909-1920, General Electric, Bell Telephone, At&T, International Harvester or even Kodak and Xerox.
Smartphones are indeed capital intensive, but are not necessary.
There are of course the Standard Oil Company, Firestone etc.

I did not list the growth rates because all of these had major mergers and reorganization that made accurate estimate possible but prone to major errors.

The point is that major technological developments produce massive growth rates until they reach saturation. The question is whether renewable energy products, including electric vehicles will have similar durable competitive advantage to those others. That question is the fundamental one we all keep discussing and debating.

Arguing that Tesla is unprecedented ignores the history of major disruptive events. It si well to recognize that it does not take much to destroy those wondrous examples. Many of them disappeared entirely, some survived but quite diminished. The lessons of Kodak, Xerox, Nokia and others are instructive, in my view.

Still we all think mostly about automotive issues.Therefore the legacy fo automotive brands, and technology changes are closely intertwined;

Timeline of motor vehicle brands - Wikipedia

en.wikipedia.org

We should think about how durable Elon Musk might be, and wonder whether Tesla, SpaceX etc can thrive without him. The timeline linked shows just how ephemeral success tends to be. Sustainable growth rates as some of us imagine do indeed diminish when growth becomes too frightening or other people begin to attack.

Right now we see Amazon, Apple and Huawei are under hard attack because of their outsized success with business models and technology that other find difficult to match. For all of them FUD has become official government policy just as accusation so nefarious deeds. Facebook, Twitter, Ant group and many others have seen FUD becoming widely believed, We may the seeing similar threats for Tesla and Space X, with SpaceX perhaps the most blatantly obvious example of unprecedented technological advance over everyone else.

So, I think the question fo how long a gigantic growth rate can continue is essentially a political question, not technological.

Perhaps most of us ignore how deep the technical advantage is for Amazon, driven by mastery of logistical and analytical innovation largely unmatched.

So, with respect, I think the question fo growth rate for Tesla ends out being a political question more than it is technological.

I’m confused. Didn’t Ford and those others actually grow marketshare in that period? I thought your claim was that Tesla would lose marketshare?

Another HUGE factor is battery supply.

Tesla’s goal is to double purchases from suppliers next year PLUS to hit a staggering 200 GWh per year internal supply of 4680’s by the end of next year. It’s hard to imagine enough of those going to Semi and Tesla Energy to make a huge dent in the unit growth needed to accommodate that massive supply.

In order for Tesla to lose marketshare then CATL, LG, Panasonic et al must grow the NON-TESLA portion of their business more rapidly than the sum of their TESLA portion PLUS Tesla’s own production.

I can’t imagine a scenario where the rest of the industry combined grows more rapidly than Tesla over the next 5 years. That would mean Tesla would grow marketshare.

Another problem with the Apple analogy is that Apple worked to maximize profits. Elon has stated he has zero interest in keeping Tesla a luxury carmaker and rapid scaling of number of units is the goal, only maximizing profits to the extent it does not slow production.

 

[Chunky Jr.]

now the pendulum seems to be swinging away from "that might not be a 4680 structural pack" towards "yah, this is a 4680 structural pack"

https://twitter.com/x/status/1413910367370190852

 

[Singuy]

Can't say I was that impressed with the new update. Gali seems a bit nervous but it looks as if the car didn't see the huge concrete monorail posts at 17:18

It doesn't see the concrete wall but it can see the lane lines. I feel like car is moving toward the columns which scares them into disengaging. It'll be extremely odd if the car decides to cross the solid white line just to hit the column.

 

[Cherry Wine]

now the pendulum seems to be swinging away from "that might not be a 4680 structural pack" towards "yah, this is a 4680 structural pack"

https://twitter.com/x/status/1413910367370190852

I’m sure Fact Checking is referring to Bill Wright as the source. A very intriguing development - Bill has been a straight shooter in the past and not prone to hype; in fact, he’s been quick to shoot down rampant speculation.

 

[Drumheller]

While it may be unlikely, I think it would be sweet if that were a 4680 pack for the new Roadster.

 

[Singuy]

I’m sure Fact Checking is referring to Bill Wright as the source. A very intriguing development - Bill has been a straight shooter in the past and not prone to hype; in fact, he’s been quick to shoot down rampant speculation.

I take everything Bill say as pretty much facts, especially statements of certain and not statements in which he has made before which were hints.

 

[InTheShadows]

But didn’t Elon say they had 4680s testing in cars for months already at Battery Day?

So why sign this one?

First production one?

 

[JRP3]

I take everything Bill say as pretty much facts, especially statements of certain and not statements in which he has made before which were hints.

Bill has said 4680 but hasn't specified if it's structural, at least not that I've seen.

 

[EVWatcher]

sentiment last night was that v9 beta would be a nothing burger for the stock. everyone still agree with that? (To be clear, not asking if its impressive, asking if some videos from a select group of people on twitter will send the stock up)

 

[Singuy]

sentiment last night was that v9 beta would be a nothing burger for the stock. everyone still agree with that? (To be clear, not asking if its impressive, asking if some videos from a select group of people on twitter will send the stock up)

My prediction before FSD Beta 9 release is that it'll be neutral or negative for the stock unless it's like L4 disengagement free blow your socks off. But most people had a feeling it'll not live up to ELon's Blow your mind expectations just like summon.

I think 4680s being ready is a better catalyst for the stock comes Monday than FSD Beta 9.

 

[InDaClub]

Can't say I was that impressed with the new update. Gali seems a bit nervous but it looks as if the car didn't see the huge concrete monorail posts at 17:18

FSD Beta testers should report back to the FSD Beta team before they post videos, giving the team an opportunity to make adjustments. However, this is an excellent location (with monorail posts) for the Beta team to do their own testing.

 

[jbcarioca]

Another problem with the Apple analogy is that Apple worked to maximize profits. Elon has stated he has zero interest in keeping Tesla a luxury carmaker and rapid scaling of number of units is the goal, only maximizing profits to the extent it does not slow production.

Were that to have been the case AAPL would have exclusively concentrated on the top of the market in everything, but they did not do so. The question is largely one of how long Tesla will be permitted to perpetuate those advantages. These are very complex questions, and involve political as much as economic issues.
Never once have I heard from AAPL that they wanted to "maximize profits". That particular issue is rather overblown. To maximize profits is to ignore all that a prudent business management would advocate. Of such logic is drawn that non-existent species 'the cash cow'. When Peter Drucker coined the phrase it referred to a large market share in a declining industry.

The issue before us is to forecast how long Tesla can prolong technological and marketing dominance. That is a very difficult task.

 

[PeterJA]

Warren always cheers me up.

He ran some numbers for expected auto profits this year and next, not including FSD or Tesla Energy. Assuming a P/E of 100, his numbers predict the share price will quadruple in the next 18 months.

 

[AudubonB]

Smartphone share has no relevance that I can see.
Auto plants are huge and extremely costly endeavors. Scaling auto (or any other huge capital intensive plants ) at 50% annual growth is unprecedented in history (aside from Tesla) to the best of my knowledge. Much less the 70-80% rate Tesla is aiming for in the short run.

There is the factor of competition starting from a smaller base that makes it easier, but there are also many countervailing factors and handicaps for both startups and legacy that should more than offset that.


Can you give any examples other than Tesla of sustained 50% annual growth in capital intensive heavy industries?

This is not the first time a question like this has come up and I’ve not seen anyone dare to wade in with a conjecture, so it’s time for me to roll up my Double-tin work pants and, while also giving a shoutout to @jbcarioca for his input….

I have either direct or investment experience in the mining industry: ferrous, non-ferrous and precious metals; forest products sector: timber, lumber, pulp, paper and newsprint; iron, steel and aluminum manufacturing; glassworks.

I can attest that, other than with the trivial exception of the earliest stages of a run-up in production at the outset of some number of the above, ~~~no~~~~, that level of increase is unprecedented.

HOWEVER, a good candidate I can envision is the wartime ramping up of strategic materiele: planes, tanks, ships and so forth. For the USA, the last time that occurred was 1942-43, and I think the wartime historians amongst us can provide specific data. Another such time would be both the French and British shipbuilding sectors during the Napoleonic wars.

 

[2daMoon]

Warren always cheers me up.

He ran some numbers for expected auto profits this year and next, not including FSD or Tesla Energy. Assuming a P/E of 100, his numbers predict the share price will quadruple in the next 18 months.

I like Warren too. He keeps things basic and his logic is tough to fault. I'm hoping he will be right, particularly if there are MMs and such who are able to damp the SP growth to meet their goals. Fortunately, that has little impact on the company continuing to grow its products, production, and deliveries for however long demand continues to exceed availability.

I'd like to see him do a little reflection upon how his predictions have tracked after a year or so have passed. Maybe annually, or semi-annually just do a quick look comparing the trend to what he said at points along the timeline and see if he's getting what he expected.

 

[ChefBoyardee]

Now I'm thinking this is a new iteration of the structural pack we saw at battery day that can accommodate different battery types. Same pack for all cars, but different cells for Model S

This would explain a few things:
- Explains why the S Plaid pack looks different than battery day. It wouldn't have made sense for Model S to be non-structural and different than 3 & Y
- Fits with the fact that that S is still using 18650, while model Y will be the first to get 4680s. (I think we're looking at the new Model Y pack here).
- Fits with Elon's tweet last year saying the Model S will have a structural pack. Maybe it already does

Implications would be that S has a structural pack already, there will be future cost savings / economies of scale by using the same pack design for all vehicles, and Tesla can use a variety of cells to maximize production

What do you guys think, am I missing anything?

Edit: Or the rumor is wrong lol

 

[Beltsbear]

Now I'm thinking this is a new iteration of the structural pack we saw at battery day that can accommodate different battery types. Same pack for all cars, but different cells for Model S

This would explain a few things:
- Explains why the S Plaid pack looks different than battery day. It wouldn't have made sense for Model S to be non-structural and different than 3 & Y
- Fits with the fact that that S is still using 18650, while model Y will be the first to get 4680s. (I think we're looking at the new Model Y pack here).
- Fits with Elon's tweet last year saying the Model S will have a structural pack. Maybe it already does

Implications would be that S has a structural pack already, there will be future cost savings / economies of scale by using the same pack design for all vehicles, and Tesla can use a variety of cells to maximize production

What do you guys think, am I missing anything?

Yea. It could be 4680 but it clearly is not replacing the bottom structure of the S/X. The new S/X has not been changed to a structural battery design. And this pack is S/X.

 

[Bet TSLA]

Another problem with the Apple analogy is that Apple worked to maximize profits.

Pure FUD. Please don't spread nonsense.