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

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I have seen this assertion frequently, but there is never any evidence to support it. Is it a conclusion from first principles or reasoning by analogy? (it can't happen because it never happened before)

It can technically happen in the sense that given enough time, and ignoring of enough anti-trust laws, nations protectionism, general consumer behavior, and more it's physically possible.

But in a slew of actual real world senses it can't, and certainly not in the time frames some folks envision it happening.



Other industries provide lots of examples of products/services that are dominated by one company: Boeing for commercial aircraft

Airbus would like a word with you on this one.

And "dominated" is a far cry from "supplies 100% of the product to the entire world" isn't it?



, Xerox (formerly) for copiers

They had the majority of market share for a while- but were never the ONLY company in the market.

, Google for internet search

Software is going to be your best argument.... Windows is another one.


But they're still only a little over 90% of the market (and there's obviously a lot of massive differences between a digital service/software and an entire line of physical products that must be built and distributed and maintained worldwide)-- and for Windows the share's only that big because in significant parts of the world people just stole the product.


, YouTube for internet video

Again software, digital service not physical product... but their market share was never even as high as the last 2 examples


, Twitter for social broadcasting, Facebook for "friending." Sure, competitors exist, but they have tiny market shares.

Outside of Windows and Google- not as tiny as you seem to think.

And I'm not sure how "Sure competitors exist" support your claim there's no evidence that "one company cannot produce all the world's cars on it's own" is valid.

In fact it seems to directly contradict it.

If there's ALWAYS competitors, even with relatively small share, then one company CANNOT produce ALL the worlds supply.

And again, outside of non-tangible goods, none of your examples were really THAT dominant, and never for all that long.... (Xerox dominance in copiers in the 60s had already shrunk to a minority of the market by 1981 for example)



The auto market never had one dominant company because no automaker had significantly better technology than the others.

Now Henry Ford would like a word with you.

Fords Model T at one point was 96% of the affordable car market (and the majority of the ENTIRE car market)-- so much so that from 1917 and 1923 Ford famously spent $0 on advertising

Even then there were still others supplying cars, and again the dominance didn't last.





None of this is to doubt Tesla is on a path to develop major market share.

And that we'll see a fair number of legacy auto companies fail to make the transition.

But even Elons most optimistic estimates have them getting to roughly 1/4 of the average new vehicle sales annually before end of decade.... some folks think the counter to that is annual sales will drop off so that the ~20 million Teslas made a year at that point become a larger % of total sales- there's likely some truth to that, but probably not to the degree that 20 million is even half of all new sales, let alone ALL of em.
 
...And it would be soooo boring with everybody driving Teslas. That alone would stop some people from ditching their fossil cars.

You might be right, but people seem to tolerate buying iPhones despite their ubiquity. If someone buys a Samsung phone, I don't think it is due to boredom with iPhones.

Many people decorate their iPhones with stickers or cases to express their individuality. The same could happen with Tesla cars (colored wraps), or Tesla could produce more colors and models. I plan to decorate my Cybertruck with graffiti (as shown in my avatar), but of course my individuality is pretty odd.
 
You might be right, but people seem to tolerate buying iPhones despite their ubiquity. If someone buys a Samsung phone, I don't think it is due to boredom with iPhones.

You realize iphones are a minority of market share, right? :)

Samsung- let alone "all android phones" has a larger share of the market than Apple does.

Apples phones are far more PROFITABLE though, despite being a minority of the market.

Sound familiar?
 
Am I the only one who looks at all the gas cars on the road and thinks these will mostly be Teslas in a few years? With increased volume Tesla's prices will plummet and the dinosaurs will not be able to compete. And who will want their compliance cars? Unless some of the manufacturers you list actually put some work into EVs Tesla will be eating their breakfast, lunch and dinner.

When I look at gas guzzlers on the road my thinking goes like this:
- if it is an old used one: "this person probably can't afford to buy a new Tesla yet" -- I give them a pass
- if it is a new car, especially an expensive model (BMW, Merc, Audi...): "What an idiots, wasted their money on an obsolete hunk of metal just to continue polluting instead of buying a Tesla"
 
Elon himself tweeted making fun of that too. I don't know if Tesla wants to go beyond maybe 4-5 million cars production a year, at some point it's completely unrealistic to think Tesla is supposed to replace the entire world's ICE production. The reason VW, Toyota, Ford, etc. will survive isn't because of any other external reason other than it is necessary that they survive because one company cannot produce all the world's cars on it's own.

Using very simple first principles thinking, I've determined there is no reason why one company cannot produce all (or nearly all) the cars on it's own. This is the kind of unsupported assumption that first principles thinking despises and warns against.

While I don't think it's likely Tesla will produce all or nearly all cars produced at any point in time, it's just plain dumb to say it can't happen without a logical reason why this is impossible. Yet I continually see this repeated around the Net, that one company cannot possibly build all the cars. And please don't say "anti-trust law" or "because it's never happened before". No one ever landed a rocket before either. And anti-trust law does not regulate companies that are good for consumers.

IMO, that would be quite the feather in Tesla's cap if they offered such unmatchable value that they continued to grow to fill all sales except for a few niche or specialty markets. However, I'm not convinced they would continue expanding past around 50-60% because it's likely the remaining sales would all be EV anyway by that point in time so the mission would not demand they continue to expand and they could focus on the most profitable market segments instead.

The counter-argument to this says that efficiency of manufacture is closely related to the carbon footprint of manufacture so Tesla must continue expanding to ensure a smaller carbon footprint for the manufacture of the worlds transportation and carry their mission to the logical conclusion. :)

edit: I see @PeterJA beat me to most of this
 
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However Tesla is converting for less than the rate on the convertible note. As I said before, I’m assuming it’s somehow legal. However, that is no consolation, which is why I posted this warning for others who hold these notes.

Somehow legal? 🤣

Look, I've only spent 5 minutes on this (and I haven't bothered to read the terms of the notes because I don't want any) but it's apparent to me that Tesla doesn't even have to offer early conversion if they don't want to.

You can't criticize Tesla for offering something that is optional on their part but has the potential to benefit both parties (depending upon the specific tax needs, etc. of the various holders of the debt). The debt has performed spectacularly, beyond any of the original holders wildest expectations and yet still people complain!

Sheesh! Enough of this trying to make it look like Tesla is doing something shady here!:rolleyes:
 
Just skimmed through this article but as a hodler with no trading experience it was a bit over my head. It does have a decent amount of context and data and did seem potentially interesting to those with more understanding than myself. If anyone finds it interesting I would be interested in any opinions on their thesis.

A bit from the conclusion:
"Option traders appear to be buying calls and selling puts, expressing a bullish outlook. The share price activity provides more room in the volatility range for an upward move in the share price going forward."


 
Anyone who purchased these notes supported Tesla as much as someone buying stock for a capital raise, possibly more because Tesla needed the money the most. Why should they be grateful to receive 15% less than the conversion rate on the note?
Why should they be grateful to receive 15% less at an earlier date?

Because they were offered the option. Tesla is not required to convert early. They are giving investors one more tool in the investor toolbox. Flexibility is a good thing. If it's not advantageous to you, don't convert early!

It really is as simple as that!
 
ALL the other OEMs are too far behind. Toyota, GM, Honda, Subaru, Nissan, Daimler. All toast. The future will be Tesla, VW, maybe Ford and whoever arises out of China.
My hunch is Hyundai/Kia might be amongst the survivors as well. Their current EV offerings are more compelling than most others, possible partnership with Samsung for batteries and I get the sense they’re one of the more innovative car companies - look how far they’ve come in the last 30 years compared to the other ICE manufacturers. Also, the S. Korean government might be inclined to see them survive the transition.
 
Just skimmed through this article but as a hodler with no trading experience it was a bit over my head. It does have a decent amount of context and data and did seem potentially interesting to those with more understanding than myself. If anyone finds it interesting I would be interested in any opinions on their thesis.

A bit from the conclusion:
"Option traders appear to be buying calls and selling puts, expressing a bullish outlook. The share price activity provides more room in the volatility range for an upward move in the share price going forward."



The article is overly long, repetitive and complicated to explain its simple conclusion: options traders are betting that TSLA is headed up. Thanks for posting it. My opinion is that it is correct.
 
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Great post!

As a fun little math exercise, if Tesla continues it's c.50% growth rate there is only 2 years between matching Ford's production and matching Toyota's production (even excluding cannibalisation of their volumes). That is a ferociously short time to upend the majors.
Production doesn't matter. Ford had Operating loss of $22 Million. Tesla Operating Profit of $1.3 Billion. If Ford had been $22 Million more profitable and made $1, Tesla's Operations would have still been 1.3 Billion times more profitable than Ford. TSLA market cap is WAY too low.
 
Anyone who purchased these notes supported Tesla as much as someone buying stock for a capital raise, possibly more because Tesla needed the money the most. Why should they be grateful to receive 15% less than the conversion rate on the note?

Why should a holder get the full value of holding to the maturity date when they aren't holding until the maturity date? (I see it as like options, there is some time value that you are forgoing by converting early.)
 
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Lol, I believe Karpathy said in a talk that it takes approx 2 weeks to train and validate. Of course now they have a shiny new A100 server cluster so it's probably faster now.

Interesting. If still true, that would suggest that 9.1 doesn’t include any changes based on the reactions to 9.0. Hopefully they’ve sped it up enough to gather at least the initial feedback, make necessary adjustments, and then train/validate. But that would mean, what, cutting the time in half? Maybe it’s more realistic to think new issues found by 9.0 testers might first be addressed in 9.2 and etc.
 

Elon's gonna start releasing FSD updates every 2 weeks just to spite all of us that give him so much crap for it.........I'm not complaining.

If they actually keep that cadence, it’s brilliant marketing. Elon is clearly ready to own the “2 weeks” meme. If Tesla can deliver marked progress every two weeks, that would change the narrative a bit. But it’d still be funny.

I feel for the poor devs working on FSD.