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

CorneliusXX

Active Member
Jun 19, 2015
2,395
20,850
London
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?
Think about the factory capacity Tesla already has in the works for model Y (~250k Fremont + 250k China + 500k Austin + 500k Berlin = 1.5m already in the works) and this is excluding any new manufacturing efficiency, which Tesla increases frequently. Model 3 already has around 500k production between Fremont and China. So Tesla would only need to add capacity for another million by 2026 to meet @The Accountant's product split. Europe can take 500k M3 from the next phase of GigaBerlin, and incremental factory improvements should make up the remaining 500k - quite a plausible path to ~1/2 of Tesla's production being 3/Y in 2026. Add in S/X/Cybertruck/Semi and you've got 500k-1m more high value vehicles being sold. That leaves c.2m-2.5m vehicles potentially for cheaper models (excluding any other high value vehicles Tesla might produce - e.g. Vans, minibus, box trucks, blah, blah)

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.

I disagree that Tesla will have margin compression selling more vehicles in the short term for too many reasons to mention, but here are some key points:

EV Demand/Sale Prices:
  • Tesla has increased sales prices across the board every few weeks/months and they are still basically sold out until next year - there is clearly pent up demand for Tesla's products.
  • EV Sales beget EV sales as people see their neighbours using EVs and enjoying them - a large drive of consumer demand
  • Virtually every major company has plans to electrify their fleets as soon as they can for ESG and operating cost reasons - A massive driver of demand
  • Supercharging networks continue to improve - further improving functionality and removing one of the fears of ownership for the ill informed
  • Globally, government support for EV's continues to increase (e.g., 0 benefit in kind tax for business vehicles in the UK, tax credits in China, much of Europe, Australia, and potentially the US) meaning that Tesla can charge comparatively more than ICE manufacturers for their vehicles while consumers see savings
  • Large cities are bringing in low emission zones - e.g. London will charge $17/day for cars and $136/day for trucks and busses - that's an extra $3,400yr cost on top of already substantially higher operating and maintenance costs for ICE vehicles if you drive to work 5 days a week - From that perspective alone a $35k EV is half paid for in 5 years just by avoiding fines.
  • There are bans on ICE vehicles starting as early as 2025 in some countries/cities and many more by 2030-35. Who would buy an ICE vehicle if new sales would be banned a few years later?
  • There will be a tipping point as EV's start to reach a more mainstream level where no-one will want to purchase ICE vehicles because they will realise their resale value will depreciate quickly - some members on this board believe it is already starting to happen.
  • This surge in demand reduces the need to cut sale prices unless a credible competitor arrives - and that doesn't appear likely in the short term.
  • There is a known battery shortage that will last years, limiting supply of new EV's (especially compared to the increased demand) and again reducing the likelihood of any drop in prices as the supply/demand balance remains out of equilibrium. Tesla is at the forefront in securing new battery capacity as it comes online.
Manufacturing Costs:
  • Everything I read is pointing to Tesla having a genuine lead in manufacturing cost compared to legacy automakers. More scale will just continue to improve that. See recent comments from VW.
  • Battery Day showed a credible path to halve the cost per KWh for Tesla's batteries (the largest cost in an EV) compared to today. That means that should Tesla need to cut the sales price for existing models (unlikely to be substantial reductions as per above) there is plenty of room to maintain margins.
  • Tesla is clearly the leader in innovation (e.g. octovalve, gigacasting) for price reduction in manufacturing. When Tesla has the innovation lead the gap to other automakers will increase rather than decrease.
Value Add Items - linked purely to vehicle sales (not robotaxi or other product lines) and expanding margins beyond the date of sale:
  • People are already prepared to pay for FSD for personal use at its current level. As it continues to improve, the percentage of people who see it as good value will increase. Tesla also has plans to increase the price of FSD as the system matures. It is clearly improving rapidly as the infinite supply of YouTube videos show.
  • Tesla sells after-market software upgrades from time to time which is basically pure profit - widening margins on vehicles even after they are sold
  • Entertainment and connection subscription revenue will increase as the system gains more functionality (continuous profit increase for every vehicle sold)
  • Service revenue of the existing fleet will increase as the fleet ages (again another revenue stream as the fleet size increases)
 
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canoemore

Member
Feb 28, 2019
436
3,799
PA
I know less than nothing about technical analysis, but surely it's a good sign that since bouncing off of 800 several times in the past week TSLA has been steadily rising up to that ceiling?

IMG_0F401B17A53C-1.jpeg
 

StealthP3D

Well-Known Member
Dec 12, 2018
10,274
86,898
Maple Falls, WA
A number of people are now reporting receiving FSD Beta 10.2. A few new FSD testers have completed short drives.

The new users are reporting it’s surprisingly aggressive and nerve-racking (of course).

Going to be an interesting few days…

I only have experience with regular AutoPilot but I want FSD to be a lot more aggressive than AP. What I find most nerve wracking is when it just sits there or seems like it can't make it's mind up what to do. Aggressive is preferable, then I can make the snap decision to disengage rather than wondering if I should disengage or let it continue to be indecisive.

When AP was young and new, one of it's most obvious faults in heavy traffic was the delayed response to the car in front taking off from a green light. Then they fixed it - even if the car in front had a heavy foot on the accelerator, AP would follow suit. I liked that. In recent weeks it has reverted back to it's old behavior, maybe even slower. It seems to take it's sweet time going from 0-55 mph and leaves a large gap even if the car in front is not particularly fast.

I'll find it the least nerve-wracking when they give me "Mad Max" driving style and the ability to de-tune aggressiveness if needed.
 

Singuy

Active Member
Jun 28, 2018
4,810
40,026
US
A number of people are now reporting receiving FSD Beta 10.2. A few new FSD testers have completed short drives.

The new users are reporting it’s surprisingly aggressive and nerve-racking (of course).

Going to be an interesting few days…
Kind of a selection bias mismatch. Those who has 100 point scores are typical people who are not aggressive drivers. I mean it's not easy to have 100 points, especially for those who drives aggressively so they are def not used to FSD's behavior. I remember Munro is an aggressive driver and loved FSD's aggressiveness.
 
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avoigt

Active Member
Sep 5, 2017
2,841
40,151
Germany
@avoigt has a video of the anode material for the 4680. Not something I had seen anywhere else.

It was the anode, not the cathode as I wrote in the tweet. I spent some time there and two Tesla employees made sure I didn't move any closer. Quite a few secrets crammed into a few square meters

My first video about the Giga Berlin entrance is life now and I work on the next that will include more exciting videos.

Its been an awesome trip and good to see Elon on the stage again.

Right after the factory tour where I got an exclusive Senior Management Factory Tour (including a lady from Tesla following us assuming I'm a journalist;-)
I had a Spaces where I hope some of you could join.

Gordon Gieseke, Sawyer were present together with many other and we had about 400 people in the room. The crazy part is that Drew, Tesla SVP joined for 30 minutes listening to our wild speculation and what we learned.

 

stealthyc

Member
May 22, 2019
348
1,980
MI
I only have experience with regular AutoPilot but I want FSD to be a lot more aggressive than AP. What I find most nerve wracking is when it just sits there or seems like it can't make it's mind up what to do. Aggressive is preferable, then I can make the snap decision to disengage rather than wondering if I should disengage or let it continue to be indecisive.

When AP was young and new, one of it's most obvious faults in heavy traffic was the delayed response to the car in front taking off from a green light. Then they fixed it - even if the car in front had a heavy foot on the accelerator, AP would follow suit. I liked that. In recent weeks it has reverted back to it's old behavior, maybe even slower. It seems to take it's sweet time going from 0-55 mph and leaves a large gap even if the car in front is not particularly fast.

I'll find it the least nerve-wracking when they give me "Mad Max" driving style and the ability to de-tune aggressiveness if needed.
It's definitely the worst of both worlds right now. It will sit at an intersection and be overly cautious creeping and braking and creeping and braking all herky-jerky and then it blasts off, often with a sharp steering adjustment mid turn. Today it wanted to make a left turn to a side street across oncoming traffic and it really nicely and aggressively took an opening and accelerated.... and then stomped on the brakes halfway across the oncoming traffic lane and creeped the rest of the way. I've gone on a few rides so far and it has overall been a big mess of bad driving.

It does not seem to correctly understand two-way turn lanes yet, and it definitely wanted to go straight through an intersection when it was in a right turn only lane. As a software developer I'd be a little hesitant to even call this beta yet. Don't get me wrong though, it's extremely impressive, and the things it does not do correctly seem very solvable. But when it makes mistakes (frequently) it does put you in at worst dangerous situations and at best situations which are extremely confusing for other drivers.
 

stealthyc

Member
May 22, 2019
348
1,980
MI
Kind of a selection bias mismatch. Those who has 100 point scores are typical people who are not aggressive drivers. I mean it's not easy to have 100 points, especially for those who drives aggressively so they are def not used to FSD's behavior. I remember Munro is an aggressive driver and loved FSD's aggressiveness.
I am not sure that is true. I'm an aggressive driver but just drove conservatively for the two weeks necessary to get the beta. I'm sure that was the case for many people. I also after further thought probably would not conflate "aggressive" with "fast acceleration" which I think is really what many people are doing. It definitely over-accelerates into turns which is made much worse by aggressive steering adjustments mid turn. I have not seen it be overly aggressive in the sense of jumping out into traffic without much room for error and so forth. But when it decides to go, it goes fast.
 

AudubonB

One can NOT induce accuracy with precision!
Mar 24, 2013
8,480
32,282
This series continues to be interesting generally, with its references to the launch customer. The 15 gigapress orders that was stated in the first episode and mentioned here a few days ago, seems to be mostly/all Tesla. I wonder whether the gigapress began in the minds of IDRA or of Tesla.
Wetblanketing here - or at least dampblanketing....but haven't we contrarily learned that a reasonable number of IDRA's orders have been going to Chinese automakers? My recollection is that information came out perhaps 4-5 months back.
 
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Singuy

Active Member
Jun 28, 2018
4,810
40,026
US
I am not sure that is true. I'm an aggressive driver but just drove conservatively for the two weeks necessary to get the beta. I'm sure that was the case for many people. I also after further thought probably would not conflate "aggressive" with "fast acceleration" which I think is really what many people are doing. It definitely over-accelerates into turns which is made much worse by aggressive steering adjustments mid turn. I have not seen it be overly aggressive in the sense of jumping out into traffic without much room for error and so forth. But when it decides to go, it goes fast.
You might not be aggressive as you think. I have sat in my friend's car and that guy thinks traffic laws are just suggestions. He hard accelerates into stop traffic and slams on the brake like every time. His follow distance at high speed makes me squeamish and plays chicken with people trying to get into his lane. If he didn't get into the turning lane, that's okay. He will hard accelerate and make an aggressive turn right on green over 3 LANES to make a super illegal turn. It's freaken awful sitting in his car but hey, he haven't got into an accident yet.
 

stealthyc

Member
May 22, 2019
348
1,980
MI
You might not be aggressive as you think. I have sat in my friend's car and that guy thinks traffic laws are just suggestions. He hard accelerates into stop traffic and slams on the brake like every time. His follow distance at high speed makes me squeamish and plays chicken with people trying to get into his lane. If he didn't get into the turning lane, that's okay. He will hard accelerate and make an aggressive turn right on green over 3 LANES to make a super illegal turn. It's freaken awful sitting in his car but hey, he haven't got into an accident yet.
There is a difference between aggressive and reckless.
 

Singuy

Active Member
Jun 28, 2018
4,810
40,026
US
There is a difference between aggressive and reckless.
Yeah, there's no one there scoring you on how reckless or aggressive you are. So it's all a matter of opinion on your part until a computer gives you a score. Many people on reddit got a 60 their first drive and that was them being careful.
 

Paul_SF

Member
Feb 12, 2020
646
7,560
US
This series continues to be interesting generally, with its references to the launch customer. The 15 gigapress orders that was stated in the first episode and mentioned here a few days ago, seems to be mostly/all Tesla. I wonder whether the gigapress began in the minds of IDRA or of Tesla.

Wherever it started, it seems Tesla is the only one using it.

I think we would have heard if anyone else was developing a new car with this casting technology.
 
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traxila

Supporting Member
Supporting Member
Nov 25, 2012
2,014
12,764
NYC
You might not be aggressive as you think. I have sat in my friend's car and that guy thinks traffic laws are just suggestions. He hard accelerates into stop traffic and slams on the brake like every time. His follow distance at high speed makes me squeamish and plays chicken with people trying to get into his lane. If he didn't get into the turning lane, that's okay. He will hard accelerate and make an aggressive turn right on green over 3 LANES to make a super illegal turn. It's freaken awful sitting in his car but hey, he haven't got into an accident yet.
Brother, you need to get out of that car and stop rationalizing with your recency bias.

We like you and want you to keep posting.
 

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