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

[StealthP3D]

Probably all the legacy auto makers are screwed. Probably. However, it is interesting to see Ford of all of them moving faster.

I disagree that Ford is moving the fastest of all of them but my point was simply that Ford doesn't get my kudos simply because they are trying to survive. You are welcome to shower them with any awards you want but I don't think they deserve any.

I can't say why but I know that Ford was look strongly at EVs in 2007. By 2008 they had to mortgage everything to stay afloat and then the Bush admin torched them by bailing out GM. IF GM had stayed bankrupt Ford would have soared post 2009. As it was GM had a relative cake walk.

This is so wrong I don't know where to start. Alan Mulally, president and chief executive of Ford even admitted they were in favor of the government bailing out GM because their failure could have a domino effect and take Ford with it. A number of Ford executives including Bill Ford have claimed GM's failure would have decimated Ford Motors and their supplier base. That's why they went to Congress to support the bailout. You can't accurately claim the bailout "torched them" when they actually flew to D.C. to beg for the bailout (of GM and Chrysler)! Even Ford received some government assurances of value through this process.

Let's not re-write history.

 

[StealthP3D]

Of course the ramp won't be for a 100% identical product. New cells, new pack design, new front casting, etc. At this point we don't know if GigaTexas or GigaBerlin will be the Guinea pig for the ramp. (Or maybe they will both essentially go through it at the same time.)

Though with GigaTexas already churning out front castings, they may be able to get some of it resolved ahead of the actual start of production.

Tesla car models constantly change and improve, both in functionality and to make them easier to manufacture. But it's much easier to ramp an existing model than a completely new one. And Tesla has MUCH more experience ramping high volume production lines now so I expect they will hit the ground running in Berlin, as they did in Shanghai, once they are permitted to produce cars.

 

[joh01652]

A thought that‘s been nagging me regarding the forward looking nature of the market.

People say that the next four years growth is already priced in. For arg sake let’s say they are right.

I have zero doubt that Tesla will continue growing at historical CAGR of more than 50%. If there’s a change, it will be towards even faster growth when 4680 removes the cell constraint.

So in four years time, surely the market will *still* be factoring in 4 years growth! Except that then, that volume of growth will be at least 5 times larger (1.5 to power of 4).

The only way for this bear argument of growth factored in can be correct is if Tesla growth slows abruptly. That ain’t happening.

In fact every year along the way, the volume of growth factored in should expand in line with the CAGR. This year, thus far, hasn’t done that, so we appear to have gotten a little too high via a squeeze. But these doldrums can’t last much longer. The pressure to reflect the expanding future growth horizon mounts daily.

Two possible dam busters. Proof of FSD. Proof of in house 4680 scalability. Either will do. Money on the latter, it’s a sure thing.

I'm not sure what exactly you mean by "the market." CNBC news? Twitter people? TSLAQ? The same "market" that said nobody wants EVs in 2015, 2019, 2020, 2021? Who are these "people" you speak of?

I don't believe the next four years of growth is already priced in because there are simply too many potential catalysts (known and unknown) ahead that are not priced in, like FSD and some form of robotaxi (which will happen at some point), 4680 scale, and Cybertruck. Also, as world governments continue to move towards decarbonized economies, additional tailwinds for the company will continue to arise. Furthermore, impacts of climate change are worsening each year, disrupting/destabilizing our power grids, which will force our utilities to downsize, to become more decentralized, more nomadic in nature as regions become unlivable, at least temporarily (think Paradise, CA, for example). Tesla wins. It's simple physics. When water levels drop below the hydroelectric outputs of dams here in the southwest U.S. in a few short years we will need quick, sustainable solutions--coal plants and complex nuclear reactors won't cut it. Simple, quick, small solar systems that can be moved about will. Again, Tesla wins.

Humans will die without companies like Tesla, and Wall Street and world governments are slowly figuring this out. This monster short position we have on Life will be unwound in due time, let's just hope it's not too late. In my mind, Tesla's SP will grow over the next four years because no other company provides anything the world truly needs right this instant, which is sustainable, decentralized energy and transportation. That's why I'm 100% in TSLA, and went back to work so I can slowly accumulate about 4 shares per week at these bargain prices.

I'm reminded of a Winston Churchill quote: "You can always count on the Americans to do the right thing after they have tried everything else." I think it's fair to say the same thing about humanity in general.

I honestly can't think of another company that has more growth potential than Tesla.

 

[StealthP3D]

Ford will easily sell every single Mach E they make this year (and next!) as they will every EV F-150 they can make next year. Rivian'll sell every truck they can make to for the foreseeable future.

So will anyone else who can produce a reasonably decent EV in the next 5 years.

The problem isn't demand, and never was. The problem is, and continues to be, supply.


Demand is simply WAY higher for decent EVs than not just anybody, but everybody can meet for at least the next 5-10 years.

Tesla won't be making enough cars, even at their most aggressive production ramp targets, to replace more than 15-20% of new vehicles sold five years from now.

Since increasingly the other 80-85% of new vehicles will be ones customers want to be electric, whoever makes decent ones will have PLENTY of buyers for them.

The Mach E is decent. It comes up short in a number of ways compared to the Y, but Tesla doesn't have infinite Ys to sell and people want EVs.

They don't need to catch Tesla (and they couldn't even if they did need to). They just have to make some decent EVs.

Which if you recall, was Teslas mission... accelerating the worlds transition and all.

A year where Tesla AND other companies sell 100% of the EVs they can produce is better for that mission than Tesla sells all the EVs they can make and everyone elses sit there unsold.


FWIW Elons specific guess in late 2020 was "for sure" at least 30 million new EVs annual production within 7 years. With 20 million of those coming from Tesla.

Annual new car sales presently are around 80 million a year.

As more and more folks realize how worthless a new ICE car will be 5-10 years from now that'll probably shrink up some as folks keep existing ones on the road longer waiting on better EV supply, but there's a limit to how much that can be done.

And whoever makes those other 10 million as long as they're not total garbage will have no trouble selling em, and the only reason they won't be able to sell more is they lack the batteries to make more.

What may kill Ford is not an inability to sell 100% of their EV production- it'll be how few of them they're capable of producing.

Ford will be able to sell every EV they actually make but the real problem is not how many they are capable of producing, it's whether they can sell them for more than it costs to make, market and deliver them. How does it help them to sell all of them if they lose money on every one they sell? That's why they won't be making many!

You may say, "Certainly, Ford knows how to make cars, they just need volume efficiencies". But Ford couldn't even make gas cars profitably (except for the Mustang)! And you have already admitted they will not be able to make EV's in high volumes. And making an EV for a competitive price is much more difficult, even in volume, than making an ICE car for a competitive price. You can thank Tesla's relentless pursuit of figuring out more efficient ways to do things for making EV's cost competitive (and profitable). But Ford can't just snap their fingers and be as efficient as Tesla. Ford has a real problem on their hands and the electric F-150 is not going to magically fix it. Nor will three or four more years. Even an unlimited supply of batteries at current battery prices cannot fix Ford's problem! Because they can't make an EV that is cost-competitive with a gas car.

 

[StealthP3D]

Yer except Tesla will still sell the same number of cars they would have with an infrastructure upgrade. So what you are suggesting is good for the competition not for Tesla.

I was thinking it was good for Tesla's mission even if it doesn't boost their financials immediately. When Tesla's mission succeeds, Tesla succeeds, right?

In the bigger picture, better electrical infrastructure really does boost the value of TSLA. Better transmission infrastructure makes solar more valuable, better charging infrastructure makes EV's more valuable, etc.

 

[PeterJA]

Ford will easily sell every single Mach E they make this year (and next!) as they will every EV F-150 they can make next year. Rivian'll sell every truck they can make to for the foreseeable future.

So will anyone else who can produce a reasonably decent EV in the next 5 years.

The problem isn't demand, and never was. The problem is, and continues to be, supply.


Demand is simply WAY higher for decent EVs than not just anybody, but everybody can meet for at least the next 5-10 years.

Tesla won't be making enough cars, even at their most aggressive production ramp targets, to replace more than 15-20% of new vehicles sold five years from now.

Since increasingly the other 80-85% of new vehicles will be ones customers want to be electric, whoever makes decent ones will have PLENTY of buyers for them.

The Mach E is decent. It comes up short in a number of ways compared to the Y, but Tesla doesn't have infinite Ys to sell and people want EVs.

They don't need to catch Tesla (and they couldn't even if they did need to). They just have to make some decent EVs.

Which if you recall, was Teslas mission... accelerating the worlds transition and all.

A year where Tesla AND other companies sell 100% of the EVs they can produce is better for that mission than Tesla sells all the EVs they can make and everyone elses sit there unsold.


FWIW Elons specific guess in late 2020 was "for sure" at least 30 million new EVs annual production within 7 years. With 20 million of those coming from Tesla.

Annual new car sales presently are around 80 million a year.

As more and more folks realize how worthless a new ICE car will be 5-10 years from now that'll probably shrink up some as folks keep existing ones on the road longer waiting on better EV supply, but there's a limit to how much that can be done.

And whoever makes those other 10 million as long as they're not total garbage will have no trouble selling em, and the only reason they won't be able to sell more is they lack the batteries to make more.

What may kill Ford is not an inability to sell 100% of their EV production- it'll be how few of them they're capable of producing.

I agree Tesla's destruction of competitors will not happen this year or next. But I doubt Ford will last five years.

I think you underestimate the number of people who will "keep existing [cars] on the road longer waiting on better EV supply." Annual new car sales are not 80 million. That was 2017. This year the estimate is 70 million.

Topic: Automotive industry worldwide

Global light vehicle sales declined by around four percent between 2018 and 2019. This trend is expected to exacerbate throughout 2020 due to the coronavirus pandemic.

www.statista.com

New car sales are not an immutable number. They will shrink more than "some," IMO, when EVs destroy the residual value of ICE cars, and robotaxis make it easier to avoid buying a new car. But the original question was will Ford survive? If they can't sell new ICE cars, and can't sell or make enough EVs, then no.

 

[StealthP3D]

A thought that‘s been nagging me regarding the forward looking nature of the market.

People say that the next four years growth is already priced in. For arg sake let’s say they are right.

I have zero doubt that Tesla will continue growing at historical CAGR of more than 50%. If there’s a change, it will be towards even faster growth when 4680 removes the cell constraint.

So in four years time, surely the market will *still* be factoring in 4 years growth! Except that then, that volume of growth will be at least 5 times larger (1.5 to power of 4).

The only way for this bear argument of growth factored in can be correct is if Tesla growth slows abruptly. That ain’t happening.

In fact every year along the way, the volume of growth factored in should expand in line with the CAGR. This year, thus far, hasn’t done that, so we appear to have gotten a little too high via a squeeze. But these doldrums can’t last much longer. The pressure to reflect the expanding future growth horizon mounts daily.

Two possible dam busters. Proof of FSD. Proof of in house 4680 scalability. Either will do. Money on the latter, it’s a sure thing.

Absolutely! AMZN's four+ year growth has been priced in for many years now. That didn't make it a bad investment.

 

[TheTalkingMule]

4 years of priced in TSLA growth puts our PE at what.....20? Less?

In what world do you average 65% growth and sit with a 20 pe ratio?

This leg up is a certainty, its just how long it can be held off. As we've seen in the past, the longer they coil the spring....

 

[dhanson865]

I'm pretty sure Tesla will do an EV planes sometimes in the future. Though Elon say that he don't like flying car since it could fall on you, on Mars there's no road and chances to fall on people there are rare. Flying EV makes sense.

No, on mars the air is too thin to support a manned air vehicle run on blade propulsion.

The EVs will be ground pounders and the flyers will be using rockets that burn gases.

Though I suppose the "space-x" cold gas thrusters would allow a mars EV to hop occasionally it wouldn't be an efficient use of battery, you'd have to save it for special cases. You'd either have to run a compressor for a long time to refill the thruster gas storage or you'd have to bring your reactant mass with you meaning you have a lot of dead weight when you aren't using it. Not efficient either way.

I'm not arguing against Tesla planes, just saying they won't be flying anything like that on mars.

 

[goinfraftw]

I agree Tesla's destruction of competitors will not happen this year or next. But I doubt Ford will last five years.

I think you underestimate the number of people who will "keep existing [cars] on the road longer waiting on better EV supply." Annual new car sales are not 80 million. That was 2017. This year the estimate is 70 million.

Topic: Automotive industry worldwide

Global light vehicle sales declined by around four percent between 2018 and 2019. This trend is expected to exacerbate throughout 2020 due to the coronavirus pandemic.

www.statista.com

New car sales are not an immutable number. They will shrink more than "some," IMO, when EVs destroy the residual value of ICE cars, and robotaxis make it easier to avoid buying a new car. But the original question was will Ford survive? If they can't sell new ICE cars, and can't sell or make enough EVs, then no.

Something to consider is the TAM for auto going forward. We (or at least most) are assuming that the TAM is going to be the same.

From a new article...a quote by Dr. Hayhoe at Texas Tech:

"'We’ve built our entire civilization on the assumption that climate is relatively stable,' said Katharine Hayhoe, a climate scientist at Texas Tech University. 'So it’s as if we’ve been driving into the future looking in the rearview mirror.'"

The American West’s Climate Hellscape Is Just a Preview

Droughts, heat waves, and floods are the new normal—unless policymakers get serious.

foreignpolicy.com

 

[Criscmt]

Words of a perma-bear who posted today about giving up the short bet.

https://twitter.com/x/status/1415419070996942858

 

[goinfraftw]

As a historical artifact, I think there's a lot to be garnered from Michael Liebreich's article from 2019:

Liebreich: Peak Emissions Are Closer Than You Think – and Here’s Why | BloombergNEF

So here we are, standing on the threshold of a new decade. It will be, to paraphrase Winston Churchill, a decade of consequences. Play it right, and we have a chance of avoiding the worst impacts of climate change. Waste it, and we are in uncharted territory.

about.bnef.com

Some quotes:

"Spain. This year, it will generate around 45% of its power from 54GW of renewable capacity. Its national plan is to increase this to 120GW by 2030, generating over 70% of its power. But peak electricity demand in Spain in the past year was just 41GW. Madness? No. Just the new reality."

and

"I’ll paraphrase: in a logistic curve penetration, the first 1% takes forever; from 1% to 5% is like waiting for a sneeze –it is going to be explosive, you just don’t know when it will happen; 5% to 50% happens much faster than you think – that is when the restructurings and bankruptcies happen.

No single “sneeze” will wipe out fossil fuel use across energy and transport; It will occur sector by sector, country by country. Over the past six years, LED light-bulbs have gone from less than 5% global market share to over 40%; coal power in the U.K. from 40% to a couple of percent; plug-in vehicles in Norway from less than 5% to over 50%. In each case, there was a slow start, an agonizing wait, and then the sneeze. Bless you!"

The infrastructure bill, let's get this infrastructure bill.

 

[Criscmt]

hypothetically, what max pain number would you say would be in our future for 7/23 come Monday morning? I'm thinking it will still be a pretty big wall at $720ish

You seem to be confident of string buying in the next few days?
$700 seems like a huge barrier interestingly this time. Even in April it wasn’t that hard to climb 700s.
Interestingly, even on a monthly options expiry week* so far there’s been almost no volume. Unless we see strong buying MMs won’t let us go into 700s.

*Two more days in the week, maybe I am jinxing the unfavorable trend

 

[Eugene Ash]

My heart bleeds for y'all who can actually buy MYs - regardless of the wait...

Thank you, it has been a couple of weeks since we got rid of the last gas car (Mercedes suv) that we had. 100% electric fleet now. I enjoy observing what AP sees. Build quality of the Y is better than my 2016 facelift s. The progress is evident.

 

[dhanson865]

Yeah this was reported on Nov 13, 2020. Nice to see CNBC protecting consumers. /S

https://www.freep.com › general-motors › 2020/11/13

Nov. 13, 2020 — GM recalls 68600 Chevrolet Bolt EVs for potential fire risk. It advises owners to set battery charge to 90% max to mitigate risk until a fix arrives. ... GM said it found five vehicles in which the batteries caught fire without any impact, injuring ... States, said Jesse Ortega, GM's executive chief engineer for the Chevrolet Bolt EV.​

Cheers!

The warning is from July 14th, the recall you are posting about is old news, this has gotten much worse for them, much more recently. The story is literally changing by the day (every few days another fire happens and the responses get more stressed).

https://my.chevrolet.com/how-to-support/safety/boltevrecall :

JULY 14 2021 IMPORTANT UPDATE FROM GENERAL MOTORS

General Motors has been notified of two recent Chevrolet Bolt EV fire incidents in vehicles that were remedied as part of the safety recall announced in November 2020. Out of an abundance of caution, we are asking owners of 2017-2019 Chevrolet Bolt EVs who were part of the recall population to park their vehicles outdoors immediately after charging and not leave their vehicles charging overnight while we investigate these incidents.

 

[MC3OZ]

Something to consider is the TAM for auto going forward. We (or at least most) are assuming that the TAM is going to be the same.

From a new article...a quote by Dr. Hayhoe at Texas Tech:

"'We’ve built our entire civilization on the assumption that climate is relatively stable,' said Katharine Hayhoe, a climate scientist at Texas Tech University. 'So it’s as if we’ve been driving into the future looking in the rearview mirror.'"

The American West’s Climate Hellscape Is Just a Preview

Droughts, heat waves, and floods are the new normal—unless policymakers get serious.

foreignpolicy.com

By now many have seen this graph from JPR007:-

https://twitter.com/x/status/1415118660587311104

The valley of death (or unmet demand) always made perfect sense to me, people decide they next car is an EV, before global production ramps to supply the natural demand.. so supply lags demand... according his graph - from 2018-2039.

 

[deshkart]

"Based on our global eVTOL/UAM model (a $9tn TAM by 2050), discounted back to the present on a per-share basis, we’re coming up with potential preliminary outcomes on the order of $100 per Tesla share on low-end to approximately $1,000 per Tesla share (or more) on the high end."
Mr $2 price target is opening his eyes.

 

[Eugene Ash]

Fixed That For Them! Wrapping a car in camo, especially one that already exists, is cheap publicity, not an attempt to avoid increased attention.

They should send one to the country of Garage54

You seem to be confident of string buying in the next few days?
$700 seems like a huge barrier interestingly this time. Even in April it wasn’t that hard to climb 700s.
Interestingly, even on a monthly options expiry week* so far there’s been almost no volume. Unless we see strong buying MMs won’t let us go into 700s.

*Two more days in the week, maybe I am jinxing the unfavorable trend

C'mon man, it is the 15th coming up, paycheck time!

 

[Atomsla]

The warning is from July 14th, the recall you are posting about is old news, this has gotten much worse for them, much more recently. The story is literally changing by the day (every few days another fire happens and the responses get more stressed).

https://my.chevrolet.com/how-to-support/safety/boltevrecall :

JULY 14 2021 IMPORTANT UPDATE FROM GENERAL MOTORS

General Motors has been notified of two recent Chevrolet Bolt EV fire incidents in vehicles that were remedied as part of the safety recall announced in November 2020. Out of an abundance of caution, we are asking owners of 2017-2019 Chevrolet Bolt EVs who were part of the recall population to park their vehicles outdoors immediately after charging and not leave their vehicles charging overnight while we investigate these incidents.

This Bolt fire thing is bad for the public perception of EV's. I hope it stays contained to just these Bolts over the coming years. There's no way to avoid an EV catching fire every now and then, but we really could go without them doing it while parked at people's homes.

 

[Thekiwi]

A thought that‘s been nagging me regarding the forward looking nature of the market.

People say that the next four years growth is already priced in. For arg sake let’s say they are right.

I have zero doubt that Tesla will continue growing at historical CAGR of more than 50%. If there’s a change, it will be towards even faster growth when 4680 removes the cell constraint.

So in four years time, surely the market will *still* be factoring in 4 years growth! Except that then, that volume of growth will be at least 5 times larger (1.5 to power of 4).

The only way for this bear argument of growth factored in can be correct is if Tesla growth slows abruptly. That ain’t happening.

In fact every year along the way, the volume of growth factored in should expand in line with the CAGR. This year, thus far, hasn’t done that, so we appear to have gotten a little too high via a squeeze. But these doldrums can’t last much longer. The pressure to reflect the expanding future growth horizon mounts daily.

Two possible dam busters. Proof of FSD. Proof of in house 4680 scalability. Either will do. Money on the latter, it’s a sure thing.

I would be hesitant on projecting that 50% growth figure out indefinitely - thats not realistic at a certain point (quickly exceeds entire auto market, and then the GDP of the USA) and even Elon mocked the idea on Twitter recently. At a certain point growth will indeed slow, the big question is of course when, and the ultimate value of the company varies wildly depending on when that happens.