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

[mltv]

https://twitter.com/x/status/1430800421354868739

 

[Kiwi_Guy]

Look, I own a Tesla, and I own TSLA stock (profits on such worth multiple Teslas), but what is
she smoking? Google the worth of the taxi industry (now $15 billion in rides, highly fragmented), then
search for a worth estimate of the entire ride-hailing industry including Uber/Lyft etc (Goldman Sachs estimates
$285B by 2030, or 20X current sales).

So now Ms Wood sez that estimate is 20X short, like in the trillions? Where are the ride hailing cities? (In the US
it'd be NY or SF)? I live in SF, and it's a walking town like Manhattan for neighborhood stuff, then it's
subway/BART/bus/taxi/Uber/Lyft for longer distance, then it's your own car if you want instant gratification or to get
out of town. Robotaxi network shakeout? In the trillions of market cap beyond basic city transportation?
I guess "I'll have what she's having", because we surely will only eat at Katz's Deli in the future to the exclusion
of all else!

If you are asking what Cathie Wood is smoking, then you also need to ask what Tony Seba and ReThinkX were smoking for their May 2017 Transportation report Transportation Report — RethinkX, which comes to similar conclusions as Cathie about Robotaxis.

Everyone asked what Tony Seba was smoking in 2014 when he made outrageous predictions about the 2019 EV market, but by 2019 the market was even larger than Tony predicted. That guy truly understands disruption, especially where multiple technologies are involved.

 

[FS_FRA]

Hey, work smart not hard! Now try (in Silicon Valley) a Google/Apple/Genentech bus with leather seats/Wifi for even cheaper vs
a platoon of individual 1-person robocars driving 40 miles in commute traffic. Or even "work-from-home", what a concept.
Now, for the "low-end" support-worker crowd, you really think robotaxis (Tesla or otherwise) will beat out public transportation
over equivalent distances? In SF or London Uber/Lyft is already meeting its match with more road congestion, congestion pricing etc.
Having said that, it's probably LA or Texas where this thesis could prevail, so oh Lord, won't you buy me a ...

Pre-trading day change-my-view:

The whole Robotaxi discussion here is so US-centric it hurts - particularly in this forum where we all should be looking at things from a global perspective.
Where I live (Frankfurt, Germany) Uber isn't a thing ('cause Uber be like: "what? I need to abide by local laws AND treat drivers like employees if that is their only gig? Jeeesh....".), Taxis are a thing (mostly Mercedes E-Class) but expensive for the masses. What is a thing (in most European/German cities) is public transportation and bike / e-scooter rentals.
The whole commute idea over here is: walk or drive your car/bike/etc. to Park 'n Ride, take a train / commuter train / metro, to the city, transfer to subway / tram, walk to the office (or if you are really lazy, take an e-scooter). Inner city: use the public transport system, and then walk (e-scooter for the lazy). If you must drive your own car, then OK, but parking is scarce and expensive, and there are restrictions. Also, congestion tax like London has been discussed.

(Please discount the COVID related issues with mass transit. That too shall pass.)

The idea is not: let's have hundreds of single-occupant cars (Robotaxi's?) clog up the inner city "roaming" around waiting to be hailed, or who then need to either park somewhere waiting to be hailed, or find their way out of the inner cities to the suburbs where they just clog that area up. They clog up the cities whether they are EV or ICE!
In fact, I think this holds true for most of Europe (600 million people in an area slightly smaller than the US).

Where I (mostly) work: Turin, Italy - same story (albeit the public transport system is no where nearly as good, they are however investing it it). Then I'm frequently (COVID excluded) in India, China, Taiwan, South Korea.


Will Tesla do Robotaxis? Sure.
Will it disrupt the global personal/commuter transportation? No. Outside of megacities/metros where there simply is no viable alternative (although you need to convince me of that) I just don't see it.
India? ROFL it's going to take a generation to put some type of required order in their transportation system.
China? Who knows what they have planned.
Seoul/Tokyo? Sure, but they are doing OK as it is.
Jakarta? See India.
Dubai: that's not a real economy and they are going to collapse.

Bay Area/LA/NYC: Yes! But should I make future valuation assumptions on Tesla based on that limited use case?

 

[TheTalkingMule]

TSLA is valuable because of its prospects in the energy sector. There's no money in making cars and FSd will eat itself from a profits perspective.

It's like frequency regulation at the utility level. The Tesla batteries in Australia solved a problem that used to cost ratepayers millions each month. When they went to claim the millions....regulators balked and said there'd be no cash since it's not a problem anymore. Lol

 

[jeewee3000]

Pre-trading day change-my-view:

The whole Robotaxi discussion here is so US-centric it hurts - particularly in this forum where we all should be looking at things from a global perspective.
Where I live (Frankfurt, Germany) Uber isn't a thing ('cause Uber be like: "what? I need to abide by local laws AND treat drivers like employees if that is their only gig? Jeeesh....".), Taxis are a thing (mostly Mercedes E-Class) but expensive for the masses. What is a thing (in most European/German cities) is public transportation and bike / e-scooter rentals.
The whole commute idea over here is: walk or drive your car/bike/etc. to Park 'n Ride, take a train / commuter train / metro, to the city, transfer to subway / tram, walk to the office (or if you are really lazy, take an e-scooter). Inner city: use the public transport system, and then walk (e-scooter for the lazy). If you must drive your own car, then OK, but parking is scarce and expensive, and there are restrictions. Also, congestion tax like London has been discussed.

(Please discount the COVID related issues with mass transit. That too shall pass.)

The idea is not: let's have hundreds of single-occupant cars (Robotaxi's?) clog up the inner city "roaming" around waiting to be hailed, or who then need to either park somewhere waiting to be hailed, or find their way out of the inner cities to the suburbs where they just clog that area up. They clog up the cities whether they are EV or ICE!
In fact, I think this holds true for most of Europe (600 million people in an area slightly smaller than the US).

Where I (mostly) work: Turin, Italy - same story (albeit the public transport system is no where nearly as good, they are however investing it it). Then I'm frequently (COVID excluded) in India, China, Taiwan, South Korea.


Will Tesla do Robotaxis? Sure.
Will it disrupt the global personal/commuter transportation? No. Outside of megacities/metros where there simply is no viable alternative (although you need to convince me of that) I just don't see it.
India? ROFL it's going to take a generation to put some type of required order in their transportation system.
China? Who knows what they have planned.
Seoul/Tokyo? Sure, but they are doing OK as it is.
Jakarta? See India.
Dubai: that's not a real economy and they are going to collapse.

Bay Area/LA/NYC: Yes! But should I make future valuation assumptions on Tesla based on that limited use case?

Shorter term (this decade) I fully agree with you.

Further out, think the Boring Company. If the current Vegas projects lead to successes in Floriday, California, New York etc, then I see no reason why London, Paris, Berlin wouldn't get their own multi-layered tunneling system, removing the congestion.

It all comes down to cost. If using a robotaxi through tunnels is cheaper AND more convenient than current methods, it will happen.

But I do agree that currently for mass transport metro's, trains and buses are way more efficient than uber/robotaxi. (even if robotaxi would have a function "cheaper ride but with picking up or dropping off extra passengers on the way")

 

[TheTalkingMule]

TSLA down at the usual ~2x multiple vs macros in the early Pre-market:

Korea raised rates as expected, so we might see one of these "moves away from growth" today/tomorrow. I expect MM's to try and lever this into a push down to $700 for the week. Delightful.

Someone posted about golden crosses or something like that causing a spike next week, so the gambler in me is looking for a rational reason to buy 9/3 calls.

These weeks around holidays are traditionally bull option traps tho. Super low volume, FUD tends to spike, MM's have an easy time picking SP.

 

[WarpedOne]

OK, but parking is scarce and expensive, and there are restrictions.

So... my personal robotaxi is worth at least as much as I need to pay for its parking.
If nothing else I can send it go park back at home after we arrive to my workplace and later call it to come pick me up. This alone saves me at least 800€ per year.

Thinking of a robotaxi as just a taxi without a human driver is just wrong.
There will still be taxis with human drivers left for long time.
There will be much less people using trains, subs, buses.
And much less people paying for city parking.
And much less delivery vans.
Etc.

 

[lascavarian]

BMW cEO on CNBC stating that on a global perspective, BMW is growing faster than Tesla. I don’t think so.

Announcing will be building all new vehicle at Spartanburg plant in TN. 5 years in the planning. No details if EV.

 

[nativewolf]

Agree on FS's euro view of the robotaxi to some extent. However, sales data disputes this somewhat. People own cars. Robotaxi is simply a replacement for car ownership, something people have begun doing recently from choice rather than economic necessity. If it works you'll find car ownership plunging. Despite EU's good overall public transport most families own cars. What if they didn't have to?

I continue to feel that the implication of a robotaxi fleet on overall auto sales is not appreciated. You won't have a swelling fleet of robotaxis and car purchase trends continuing historical norms. So, total autosales will plummet. Further, EV's should last longer, accelerating what should be a drop in total vehicle sales.

In emerging countries the taxi is a common tool, human capital is low cost so the value of a robotaxi is..meh. I don't see the point, if anything I'd be banning robotaxis if I'm president of Brazil or South Africa or Nigeria.

 

[NicoV]

Model 3 is number 1 in the top 5 EV sales in Belgium H1 2021

Top 5 van populairste elektrische auto’s van België

Tijdens het eerste semester van 20221 werden in ons land meer inschrijvingen genoteerd van één Californisch model dan van de twee elektrische Duitsers die na hem op de markt zijn gekomen bij elkaar opgeteld.

www.vroom.be

EV’s have 3.9% market share in that period, 20% market share for electrified vehicles.

Model 3 has more sales than the number 2 (e-tron) and number 3 (id.3) combined. Taycan only slightly behind id.3

 

[FS_FRA]

Shorter term (this decade) I fully agree with you.

Further out, think the Boring Company. If the current Vegas projects lead to successes in Floriday, California, New York etc, then I see no reason why London, Paris, Berlin wouldn't get their own multi-layered tunneling system, removing the congestion.

It all comes down to cost. If using a robotaxi through tunnels is cheaper AND more convenient than current methods, it will happen.

But I do agree that currently for mass transport metro's, trains and buses are way more efficient than uber/robotaxi. (even if robotaxi would have a function "cheaper ride but with picking up or dropping off extra passengers on the way")

I with there was a yes/no/maybe "like" instead only thumbs up / down ...

 

[nativewolf]

@NicoV So 2-4 are all VW. Berlin should change that. I'm curious if any Chinese cares are showing up in Belgium?

 

[hobbes]

Looks like there will be another public hearing of objections against Giga Berlin, this time online (I hope that an online event might keep discussions shorter/more organized but not sure).

Source

Tesla-Erörterung findet als Online-Konsultation statt

Potsdam – In der dritten Beteiligung der Öffentlichkeit im Genehmigungsverfahren für die geplante Fahrzeugfabrik von Tesla in Grünheide (Mark) haben 395 neue Einwenderinnen und Einwender Einsprüche zur geplanten Gigafactory erhoben.

translate.google.com

Background:

Neue Erörterung zu deutscher Tesla-Fabrik beschlossen – aber nur in schriftlicher Form

Wegen vieler neuer Einwendungen gegen die deutsche Tesla-Fabrik gibt es noch einmal eine Erörterung – aber nicht mehr vor Ort.

translate.google.com

 

[ZachF]

No, they really don't. Stock buybacks are an obvious was to support investors. Even more important, Tesla can divert FCF into the purchase of a Tesla-owned autonomous fleet.

If Tesla scales to produce 10M "Model 1" robotaxis and achieves 30% gross margin, then Tesla can buy 3M Models 1 per year out of FCF, all the while maintaining its profitability based on its other product lines.

This is a simple example. There are other ways to invest capital from profits. The Supercharger network is the best example: Tesla grows fast when they have unallocated FCF, and throttles back when they want to increase profits. The MegaCharger network can work the same way. So can Model 2 (once a single jurisdiction has FSD). Right now, the Bay area is in the lead due to data.

Strategic acquisitions may also be important. If Tesla owned their own ($10B) microchip FAB, they wouldn't be begging for chips while otherwise-finished product gathers dust in some railyard. Personally, I'm watching to see what happens with the new Samsung FAB in Austin, TX.

TL;dr No dividends.

Good post.

Something to think about on dividends, Elon owns ~1/5th of Tesla, so 1/5th of dividends, should they ever distribute them, would be plowed right back in to SpaceX. It is for this reason alone I think Tesla will eventually offer dividends. Remember, Elon is accumulating resources for two purposes: to make a sustainable energy future, and to make humanity a multi-planet species. If Tesla is making boatloads of profit, he is already succeeding on the first point, and he will leverage that as best he can to fund the second point. (Also, I fully suspect Elon in his will is going to leave the vast majority of his wealth to the Martian colony, to make sure it is funded after his death)

I also think Tesla will make their own fab eventually. They don't need to now, but ~10 years from now when they are making 10+ million FSD-capable cars per year, tens of millions of Tesla Bots (and probably other, more specialized robots as well), and leasing a boatloads of Dojos AWS-style for various reasons, this will be a different case.

The amount of computing power needed per robotaxi and Tesla bot will far above a Computer, Playstation, or phone... And they will probably need to be upgraded continuously as well. A this point Tesla would probably be one of the world's largest consumers/producers of computing power, so having their own fab will make much more sense. At this point, no, but a some point, yes.

 

[EVMeister]

Looks like there will be another public hearing of objections against Giga Berlin

 

[ZachF]

Linette Lopez pasting an email from a lobbyist and calling it journalism

 

[twtestw]

I assume they may have concluded most commuter journeys to work will be in Robotaxis, worldwide at sometime in the future..
Even if that is the conclusion, 2025 seems too early, not only for the transition to happen, but for people to be 100% confident the transition will happen, and Tesla will be the dominant player..

I say most commuter journeys because most people will sleep, play a computer game, browse the internet, or read a book, rather than drive the same route every day. Assuming the majority of people are not work-from-home or have another convenient transport option..

They also need Boring Co tunnels to make this work, so everyone piling into cars, doesn't end up in a massive traffic jamb. The I think the majority of people will prefer a Robotaxi journey to public transport, if the cost was roughly comparable, Covid-19 is one thing that will have people preferring to travel alone, or in small groups with people they know. I think we will eventually mostly forget Covid-19, but not for another 5-10 years...

Pretty much. Ark has been pretty open about their robotaxi case:

Autonomous Ridehailing Could Be More Profitable Than We Had Modeled

ARK expects that a handful of autonomous ridehailing platforms will enjoy natural geographic monopolies and profit handsomely.

ark-invest.com

“In conclusion, ARK expects that a handful of platforms will enjoy natural geographic monopolies and profit handsomely, perhaps more so than we originally forecasted, as transportation shifts from human-driven to autonomous. Not only do we expect the companies to benefit, but consumers will pay likely 30-70% less for point to point travel, a win-win caused by truly disruptive innovation.”

Basically, EVs will make transportation cheaper. Autonomy will reduce labor costs and accidents. The “winners” will be able to charge high take rates and it will still be cheap for consumers.

The cost per mile they are suggesting seems cheaper/as cheap as public transportation in a lot of cities. We’re truly heading towards a time where we will question why anyone chooses to drive.

What a time to be alive.

 

[FS_FRA]

Pretty much. Ark has been pretty open about their robotaxi case:

Autonomous Ridehailing Could Be More Profitable Than We Had Modeled

ARK expects that a handful of autonomous ridehailing platforms will enjoy natural geographic monopolies and profit handsomely.

ark-invest.com

“In conclusion, ARK expects that a handful of platforms will enjoy natural geographic monopolies and profit handsomely, perhaps more so than we originally forecasted, as transportation shifts from human-driven to autonomous. Not only do we expect the companies to benefit, but consumers will pay likely 30-70% less for point to point travel, a win-win caused by truly disruptive innovation.”

Basically, EVs will make transportation cheaper. Autonomy will reduce labor costs and accidents. The “winners” will be able to charge high take rates and it will still be cheap for consumers.

The cost per mile they are suggesting seems cheaper/as cheap as public transportation in a lot of cities. We’re truly heading towards a time where we will question why anyone chooses to drive.

What a time to be alive.

I agree with the question: why will anyone choose to drive? I just don't agree that Robotaxis will be the answer - globally - to that question.

Robovans, Robominibusses, Robobusses - ideally driving in Boring Tunnels- that I can get behind.

 

[ZachF]

They must have done an estimate for the number of people who will switch to ride hail from other modes, such as car ownership.*

It’s like the market for iPads/tablets. 20 years ago everybody would have agreed there was no such market.

edit *also people with own car who will use cheap ride hail when it suits, such as drinking occasions and trips to places where it’s difficult to park.

Precisely.

I don't think many people have done the math on how cheap per-mile robotaxi services could be.

A $20,000 robotaxi amortized over 1,000,000 miles is 2 cents per mile.

The biggest savings is the driver. If you assume ~$30/hour labor cost at an average speed of ~30mph that's $1 per mile. Robotaxi will do it for a fraction of a penny worth of electricity.

Electricity is already cheaper than gas, and a fleet operator could purchase electricity at cheaper industrial rates (8c vs. 13c). 4mi per KWh at 8c per KWh is 2c per mile.

If you assume maintenance is the same as the capital cost (it's probably less) that's another 2 cents per mile.

Add these up, and you're at 6 cents per mile to build, pay off, maintain, and fuel up a car that can drive itself. 6 cents per mile is less than just the fuel cost of a car that gets 50 miles per gallon at $3 per gallon!

Let's triple that cost, to account for times when the AEV is carrying no passengers, and for a very healthy profit. 18c per mile retail cost. That's still less than the fuel cost of a 16.7 mpg car! It's probably less than the fuel+maintenance+taxes/etc of any fully paid off car.

With these economics, large portions of people in western countries will probably forego car ownership entirely. Two-car families will become one-car families. Poor countries, like we saw with cell phones where they skipped the landline phase entirely, will probably skip the car-ownership phase entirely as well.

 

[redan]

“Elon time” is certainly becoming a thing:

https://twitter.com/x/status/1430818638588690432