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

Artful Dodger

"Ducimus, lit"
Aug 9, 2018
10,538
142,863
Canada
Only 180K TSLA shares traded Pre-market:

TSLA Pre-Market Quotes​

Data last updated Oct 11, 2021 09:30 AM ET.
This page will resume updating on Oct 12, 2021 04:00 AM ET.
Consolidated Last Sale$785.81 +0.32 (+0.04%)
Pre-Market Volume180,197
Pre-Market High$788 (09:28:50 AM)
Pre-Market Low$783 (08:08:32 AM)

TSLA.2021-10-11.09-30.png


Cheers to the Longs!
 

Right_Said_Fred

Moderator
May 11, 2012
4,107
36,999
The Netherlands
I've removed many posts in which our newest member is being nailed to the pillory on the suspicion of being a care bear or troll. That is not how we operate. Everyone has the right to ask questions, even if they are critical. Public branding is uncalled for at this time. If moderators suspect that someone has no pure intentions, they will take action.

I like the many constructive and insightful responses that were also given. They reinforce once again the notion that we are investing in the right company.
 

mongo

Well-Known Member
May 3, 2017
13,809
44,330
Michigan
Thanks for this.
I'm okay with your production estimates and your gross margin %, though I'm not too confident about your sales figures. I do think Tesla will hit 5-6 million units annually by 2025 or 2026, but wouldn't the vast majority of those sales be with the lower-priced $25K sedan?
I would think that would cut your revenue by 1/2.
And if Steven Mark Ryan is correct about an $18K model, that would cut your revenue estimates by 2/3.
I'm not even sure if they would be able to maintain their 30% auto margins if they were selling mostly high-volume, low-priced vehicle (High worker wages in the west acts as floor for production costs), so there would be further downward pressure on their operating income and net income. Decreasing margins will also lead to dropping P/E ratio.
Lower cost Model is not confirmed by Tesla, nor have factory line builds been started for it. It may be FSD taxi with $$$ revenue .
2021 is on track to be >800k in just 3/Y
2022: Berlin is built for 500k Y, same with Austin, Fremont expanding
By 2025: >3 million Y/3 with currently in progress factories.
Plus Cybertruck (500k+? )
Plus S/X (100k)
Plus Semi (???)
Plus Roadster (?)
 

st_lopes

Member
Aug 3, 2020
549
6,097
Canada
Assuming that Tesla will maintain a 30% gross margin and ASP of $35,000.
Gross profit will be $210 billion. Maybe profit margin will be 15%, which is outstanding for a mass-market auto company leading to a net income of $105 Billion.
I think the company would stop growing then, and so P/E ratio will be something modest like 5-8.

I'm just having trouble justifying Tesla's valuation if Tesla doesn't solve FSD.

Spend some time unpacking the volume of optionality Tesla has in growing in to its valuations. FSD is just one of a dozen. It’s entirely capable of growing in to its valuation on car sales alone. Your assumption that by dropping prices they will drop margins is the primary fallacy. Rewatch battery day video. Watch The Limiting Factor. That is the primary secret sauce to unlocking vehicle margins.

It’s not FSD. FSD is an unlock to a multi trillion valuation that even nobody here can really model out. ARKK has tried. Even their “failure” bear models shows $T valuations.

And we’re not even talking about energy, Dojo-aaS, licensing various technology components, robotics, HVAC, EVTOL, etc. Each of those segments have the potential to add $B (and some $T in their own right) to continued valuation.

Ok, this actually makes some sense.
I guess if robotaxis don't come, the FSD add-on would provide Tesla with a pretty significant boost to their margins if FSD continues improving.

Tesla's last quarterly report was really impressive at an 11% operating margin. I've read up on manufacturing innovations at Tesla to reduce costs (Like the Octovalve and Gigapresses), so how easy would it be for other companies to copy Tesla and achieve similar cost savings, which would then pressure Tesla to lower prices & margins?
Others have said it already. No OEM has shown any technological prowess in the EV space. Tear down after tear down keeps showing they still really don’t know what they’re doing. Will they eventually figure it out? Maybe. Will it be before their ICE factories bankrupt them? Maybe. Place your bets accordingly.

Bottom line, you are severely underestimating Tesla’s abilities to drive margins solely on vehicle sales. Their cost to produce batteries are just in the cusp of dropping 50% plus over the next couple years.
 

ammulder

3P, X ordered
Supporting Member
Apr 11, 2019
1,430
5,403
Philly area
And if Steven Mark Ryan is correct about an $18K model, that would cut your revenue estimates by 2/3.

I haven't watched the video, but most people talking about an $18k car are talking about a car that Tesla sells in the US for $25.5k, but then the buyer collects a $7500 rebate from the proposed EV credit. That credit doesn't take revenue away from the manufacturer.

Don't forget that the average new car in the US costs $43k, so there's really not a reason to believe the majority of Tesla sales would be a $25k car, even if it existed. Not to mention as of last week, the company is aiming for the Model Y to be the best selling car in the world by revenue in 2022, and best by unit sales in 2023. Another good reason to believe the cost of the average Tesla isn't going to drop by 2/3.

Then, even if you think Robotaxis aren't a thing, you must appreciate that FSD is getting better as a driver-assist. There will be a certain number of FSD buyers (or more likely, subscribers) with a $25k car, which means nearly-all-profit software stands to be a proportionally bigger piece of the total Tesla revenue on a $25k car. That could make margins better (not worse) vs. the more expensive models. It depends on the FSD subscription rate, but as the software keeps improving, it's hard to imagine the take rate won't also improve.
 

Artful Dodger

"Ducimus, lit"
Aug 9, 2018
10,538
142,863
Canada
Max pain for Friday is currently $750. Praying to all dirties we can touch that this week and lever up.

Looks like $800/820 are the more rational walls. Banged off 800 once already this week.

My experimental "C-P Brkpt" metric as of 7:00 a.m. today points at $780 again, with "Call Walls" at 800 and at 810 (already sold off once at hitting 800)

Options.Chart.2021-10-11-07.00.png


REMINDER: "C-P Brkpt", or "Call minus Put Breakpoint", is an experimental attempt to capture the Options expiry price that may be preferred by Market Makers. It is not updated in real time (always at least 1-day stale), and there are many other actors in the Market bidding the SP up or down to their own benefit. Take this as just another piece of the puzzle, and... GLTA!

Cheers!
 
Last edited:

22522

Active Member
Jun 6, 2016
2,140
6,391
Texas
Thanks for this.
I'm okay with your production estimates and your gross margin %, though I'm not too confident about your sales figures. I do think Tesla will hit 5-6 million units annually by 2025 or 2026, but wouldn't the vast majority of those sales be with the lower-priced $25K sedan?
I would think that would cut your revenue by 1/2.
And if Steven Mark Ryan is correct about an $18K model, that would cut your revenue estimates by 2/3.
I'm not even sure if they would be able to maintain their 30% auto margins if they were selling mostly high-volume, low-priced vehicle (High worker wages in the west acts as floor for production costs), so there would be further downward pressure on their operating income and net income. Decreasing margins will also lead to dropping P/E ratio.
It is difficult to predict the future.

As far as demand goes, The Model 3 is just better.

So the vast majority of those sales may be Model 3 and Model Y and Cyber Trucks.
 

AudubonB

One can NOT induce accuracy with precision!
Mar 24, 2013
8,497
32,561
Have to come back to the amazing Gigafactory Berlin-Brandenburg Factory Tour.
GA of the interior with the Structured Battery Pack looks like a cakewalk: Start with vent pipes and carpet, add center console and finally seats - you're done!
Every step is done outside the car.
View attachment 720141
Has anyone determined - either from this shot or any of the others emanating from the tour - how and where the seats are indeed fastened to the pack? I do see something looking like a fastener - bolt-head, perhaps? - in the tan riser below the air ducts in the center, affixed to the raised corrugation of the pack, but there must be many more.
 
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