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

[redan]

Looks like three weeks to Beta 10.1 (unless Elon is just referring to waypoints, because he also says the digital clock is coming in two weeks):

https://twitter.com/x/status/1436767173926690818

https://twitter.com/x/status/1436774682527678475

 

[EVMeister]

Just shows how much work is ahead for Tesla to achieve World dominance.

It does, but they don't need to dominate in this way. Remember, we're nearly 2 years on from when that data was published. And Tesla has already grown massively since then. It has climbed up "the charts" in many countries and continues to do so. Whilst others move down. Bestselling vehicle per country is an interesting but overrated metric IMHO.

 

[lazybot]

When it comes to the new structure of the EV plan, I see that Union's now get $4,500 instead of $2,500. If that actually gets written in and voted on, I expect Tesla along with many states that are anti-union (cough..Texas) to threaten a lawsuit against the government.

Regardless of whatever happens with that, for Tesla, it still brings the unfair gap in credits from $7,500 right now since Tesla doesn't get anything, to $4,000. When it comes to actual practicality of who it's going to help, there's no question. Tesla is the only automaker with the ability to scale their production in any meaningful way.

Simply put, no legacy auto makers is going to be able to really take advantage of this until 2025 because they simply won't have the battery supply to ramp. Ford and GM especially are farther behind in securing battery supply than say VW and have zero way of having any meaningful production until 2025 at the earliest.......at which point Tesla is probably going to be cranking out 4-5 million Tesla's annually. And that's me being conservative.

I expect Tesla at that time will get aggressive with it's pricing due to years of cost savings while not dropping the price combined with big profits out of their software side. The gap in what Tesla get's from the ev credit verses what Ford/GM get, $4,000, will be dwarfed by how much lower Tesla can sell their EV's than what Ford/GM can.

Another thing to point out, what battery supply legacy auto will get over the next 4 years will primarily go to Europe. Remember, Europe emissions fines get steeper and steeper each year. Even with the US tax credit/rebate, it will probably still be more cost effective for legacy auto to focus on the European market.

The $4500 union made credit is likely to get zero republican support in the senate. This credit also affects the other legacy oems that are not unionized, the German big 3 (VW, Diamler and BMW) and the Japanese big 3 (Toyota, Honda and Nissan). I am sure these companies will lobby hard and it is unlikely to make it into law.

 

[StarFoxisDown!]

The $4500 union made credit is likely to get zero republican support in the senate. This credit also affects the other legacy oems that are not unionized, the German big 3 (VW, Diamler and VW) and the Japanese big 3 (Toyota, Honda and Nissan). I am sure these companies will lobby hard and it is unlikely to make it into law.

Well it doesn't need any support from Republicans in the Senate. But yes, I still think this is going to get cut out or changed.

The most obnoxious thing in this EV credit plan is the incentives for US-made batteries in the vehicles. $500 as an incentive for US made batteries is a joke. The cost difference between a US made battery can't compete with the likes of CATL, LG, etc...The batteries and battery packs from those guys will be much cheaper than $500 when compared to a US made battery.

Obviously I'm excluding Tesla here. I'm just talking about legacy auto makers. $500 as a incentive will do diddly squat to make legacy auto makers decide to buy their batteries from US battery manufacturers or to incentivize companies to set up local battery production in the US

 

[Buckminster]

Looks like three weeks to Beta 10.1 (unless Elon is just referring to waypoints, because he also says the digital clock is coming in two weeks):

https://twitter.com/x/status/1436767173926690818

https://twitter.com/x/status/1436774682527678475

FSD V10.1 coming out 1st Oct. News cycle is the following day which will very likely be P&D release.

 

[ninpb]

View attachment 708079

All those F series and Hilux markets. Can't wait.

 

[22522]

Well it doesn't need any support from Republicans in the Senate. But yes, I still think this is going to get cut out or changed.

The most obnoxious thing in this EV credit plan is the incentives for US-made batteries in the vehicles. $500 as an incentive for US made batteries is a joke. The cost difference between a US made battery can't compete with the likes of CATL, LG, etc...The batteries and battery packs from those guys will be much cheaper than $500 when compared to a US made battery.

Obviously I'm excluding Tesla here. I'm just talking about legacy auto makers. $500 as a incentive will do diddly squat to make legacy auto makers decide to buy their batteries from US battery manufacturers or to incentivize companies to set up local battery production in the US

Fires might.

 

[Thekiwi]

This is only true if Tesla increases the price of the cars $7500 each or it increases the number of units sold.

Tesla is supply constrained, so any rebate would not increase sales numbers.
There is no direct profit, Tesla gets the same amount of money. Buyers pay less, that is all.

Even if supply constrained, a $7,500 drop in the price of all Tesla models means a significant amount of Tesla buyers will opt for higher priced models than they would have otherwise, meaning Tesla profits more even If they choose not to increase pricing further. Eg: instead of a SR model, buyers choose a LR.

 

[Nolimits]

The caviat is market clearing price. If Tesla cars have a 6month+ waiting list; it negatively affects consumer experience and negates the benefit of a low price.

The ‘demand problem’ that Tesla is facing is a massive tailwind that cannot be quantified. This is a major reason that most agree an EV tax credit doesn’t benefit Tesla right now.

Once Austin and Berlin GFs open up, the waitlist should ease up a bit. If They both ramp up like China, esp w the 4680s, it’s game set match.

 

[dhanson865]

I've never understood the confusion around this stuff though. If I wanted 100% Tesla exposure I can buy TSLA myself and not pay a management fee. You buy a fund to diversify and hopefully make some money on swings.

I can't buy fractional shares in my 401k so at some point if TSLA keeps going up I might punt and take my paycheck contribution and put it into whichever fund has the highest TSLA percentage.

Then later I could sell multiple bundles of the fund to get back into 1 more share of TSLA.

otherwise I just have it sitting in the 401k making zero gains and losing vs inflation.

Would I gain making multiple trades in and out of the managed fund vs leaving the money sitting idle in my 401k until I gain enough to buy 1 share? I don't know, but if that is a sure thing, then I should start doing it.

 

[FireMedic]

Once Austin and Berlin GFs open up, the waitlist should ease up a bit. If They both ramp up like China, esp w the 4680s, it’s game set match.

We all thought that when China ramped up demand could dry up a bit.

Problem (not a problem) with that theory, is that every Tesla sold creates another Tesla/TSLA ambassador/salesperson.

“The more Teslas Tesla sells; the more Teslas Teslas’ sell”.

 

[Paul_SF]

Come on , pile on some more! /s

https://twitter.com/x/status/1436792119922933761

 

[EVMeister]

Come on , pile on some more! /s

https://twitter.com/x/status/1436792119922933761

Man, this Elon dude is such a bear valuing Tesla vs. "other automakers".

 

[Thekiwi]

Come on , pile on some more! /s

https://twitter.com/x/status/1436792119922933761

I think Elon is being reasonable here, acknowledging the massive market cap of Tesla currently relies on great execution for the next several years. However it seems quite a subdued unprompted chill pill from Elon compared to a couple of days ago when he was emailing all staff saying he agrees with Cathie Wood‘s $3000+ price target as achievable.

Those two comments are by no means contradictory of course - one can acknowledge that the current share price is richly valued, while at the same time think the future still holds a great amount of share price appreciation potential.

 

[woodisgood]

Man, this Elon dude is such a bear valuing Tesla vs. "other automakers".

*waits patiently for @Krugerrand to chew him out*

 

[22522]

I can't buy fractional shares in my 401k so at some point if TSLA keeps going up I might punt and take my paycheck contribution and put it into whichever fund has the highest TSLA percentage.

Then later I could sell multiple bundles of the fund to get back into 1 more share of TSLA.

otherwise I just have it sitting in the 401k making zero gains and losing vs inflation.

Would I gain making multiple trades in and out of the managed fund vs leaving the money sitting idle in my 401k until I gain enough to buy 1 share? I don't know, but if that is a sure thing, then I should start doing it.

Tesla seems to move in fits and starts.

 

[StarFoxisDown!]

We all thought that when China ramped up demand could dry up a bit.

Problem (not a problem) with that theory, is that every Tesla sold creates another Tesla/TSLA ambassador/salesperson.

“The more Teslas Tesla sells; the more Teslas Teslas’ sell”.

Also, Giga Texas is going to take a full year just to get up to a run rate of 500k/year. So it won't hit that production rate until probably Q4 2022. The EV credit actually passing I think will at least double, if not triple demand for 3/Y in the US. We're already seeing demand grow much faster than Fremont's production capacity. Giga Texas will eventually triple Fremont's production rate, but that's likely 2-3 years away. In the meantime, the backlog is going to continue to grow.

I'd put money on 2022 being sold out by March, April at the latest.

 

[StarFoxisDown!]

I think Elon is being reasonable here, acknowledging the massive market cap of Tesla currently relies on great execution for the next several years. However it seems quite a subdued unprompted chill pill from Elon compared to a couple of days ago when he was emailing all staff saying he agrees with Cathie Wood‘s $3000+ price target as achievable.

Those two comments are by no means contradictory of course - one can acknowledge that the current share price is richly valued, while at the same time think the future still holds a great amount of share price appreciation potential.

The flipside to that, and why I'm not particularly fond of Elon making comments about Tesla's valuation, is that if you strip away labels such as tech company, auto maker, etc....and just look at revenue, projected revenue growth, and especially gross margin and operating margin, Tesla is undervalued today. Once it breaks into 30%+ gross margins and operational margin around 15-20%, they're in the league of some of the best tech companies. Tesla's current valuation is low. Legacy auto makers are valued at what they are because their growth is stagnant/dropping and their gross margins and especially operation margins are terrible.

Elon's incredibly knowledgeable about so many things, but I doubt he really makes an effort to understand wall street valuation on a technical level and nor do I expect him to. I'm sure if you asked Elon and Zach the same question "Is Tesla overvalued today without factoring in FSD?", you would get two very different answers.

 

[MP3Mike]

Thanks. I think access to SpaceX is a key motivator to buy Barron and ARK products. Someone mentioned this with Barron, but I think it applies to ARK as well.

I wasn't aware of any of the ARK funds containing any SpaceX. Or are you forecasting potential future access to it in the ARK space fund, by virtue of Elon's and Cathie's relationship of mutual respect ?

As far as I know ETFs aren't allowed to hold private equities. So no SpaceX for ARK, of GK, or FFND.

 

[Christine69420]

I can't buy fractional shares in my 401k so at some point if TSLA keeps going up I might punt and take my paycheck contribution and put it into whichever fund has the highest TSLA percentage.

Then later I could sell multiple bundles of the fund to get back into 1 more share of TSLA.

otherwise I just have it sitting in the 401k making zero gains and losing vs inflation.

Would I gain making multiple trades in and out of the managed fund vs leaving the money sitting idle in my 401k until I gain enough to buy 1 share? I don't know, but if that is a sure thing, then I should start doing it.

This was my situation the last time TSLA started to move up into the many hundreds of $$$. I argued and hoped for a split so that I could manage to buy at least one share per month.

And as far as I remember making the share price reasonable for small time private investors was one reason cited by Elon for the split. The other effect of the split was a pleasant surprise for a noob like me.

The 5:1 stock split was announced August 11th 2020 after a period where the share price was pinned to $1500 for a couple of weeks or so. Then after the announcement we got a rally which 3 weeks later split $2213 down to $442.68 after hours on August 28th.

One more reason for a split eventually would be to join the DOW since they weirdly want the share price in $$$ to match a required range. But for that to happen I believe TSLA need to be rated investment grade.