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

[Singuy]

As much as I would love this to be true, egos and political realities get in the way of facts and what is "just" all too often. But there's no reason to think the sky is falling just yet, although I think Tesla's relationship with NHTSA definitely bears close watching.

Elon made it pretty clear that Tesla will continue to do the right thing despite whatever is thrown at them when it comes to FSD. The show will go on...and when there's will there's a way. Lets just say I give more gravity toward Tesla's will to complete their mission than lazy government workers trying to stop them.

 

[bkp_duke]

She is a director of and investor in a Lidar company, she has vested interests in stopping or slowing down tesla.

By law, she's supposed to divest those investments if she takes that gov position. Otherwise, it's a clear violation of the ethical code for government employees.

 

[SPadival]

I echo your comments but perhaps not as grim as I originally thought.
I don't think the tweet below indicates she is a friend of FSD but at least it appears she has had some positive interactions with Tesla engineers in the past and that the channel of communication is healthy. Fingers crossed.

She has blocked me and a large bunch of other people, which indicates she has subscribed to the TSLAQ mass block list.

This is war.

 

[RobDickinson]

By law, she's supposed to divest those investments if she takes that gov position. Otherwise, it's a clear violation of the ethical code for government employees.

Seriously you think thats a thing still?

 

[22522]

Another red flag, and supportive of the idea that NHTSA could soon turn hostile:

Biden to tap No. 2 official to head U.S. auto safety agency

President Joe Biden plans to nominate the No. 2 auto safety official to head the National Highway Traffic Safety Administration (NHTSA), the White House confirmed on Tuesday.

www.reuters.com

She posted this on Twitter on Sunday:

https://twitter.com/x/status/1449788572106625039

Let's try being optimistic on this. There is something on Elephantine decision making in Mark McCormack's book. It essentially says people make decisions based on facts, and they stick with these decisions even after the facts have changed.

It is safe to say she is the smartest person in the visible (non-shadow) part of the Biden administration.

When I compare what she said in this random interview with what I saw on the Tesla screen today, I see a path to fewer highway deaths.

"Missy Cummings: 'I can show a convolutional neural net a million images of a stop sign, and it will learn what a stop sign is from those images. But if it sees a stop sign that doesn’t match exactly those images, then it can’t recognize it. And this is a huge problem, because if a strand of kudzu leaves starts to grow across just the top 20% of a stop sign, that is enough to make that algorithm be dumb, and it doesn’t recognize it, because it’s never seen a stop sign with one strand of kudzu leaves across it.'"

So this is a fixed belief based on old facts.

Here are some new facts: My car rendered the stop sign and speed limit signs in my neighborhood with more clarity than ever before. I noticed.

Here is conjecture based on "most likely"

1. Someone is populating a Tesla database (over sampling or over fitting).
2. It could be me (next in line) or someone else who has FSD Beta.

Conclusion: The car will not be looking for "a stop sign" but rather for "that stop sign."

The algorithm will not be dumb because it is getting help from its friends. Elon tweeted this as a graphic yesterday. Perhaps this gentle version with a Mark McCormack story will keep things friendly.

https://t.co/a0F22R5Hv7

 

[bkp_duke]

Seriously you think thats a thing still?

Well, it is a law on the books. I wasn't commenting on the frequency of enforcement . . .

 

[Boomer19]

Considering the tsunami of FCF headed our way, do you understand Elon's statement at the shareholder meeting that they don't expect to pay dividends any time soon?

This seems to contradict:
1) He's repeatedly said that the limiting growth factors are talent and supply chain and that if Tesla could find more ways to spend money reasonably they would
2) Tesla's CapEx efficiency has been improving at a stupendous rate. E.g. Giga Shanghai's up front investment costs paid for themselves in less than a year. So if anything, with rising ROIC we'd expect it to be even harder to reinvest all FCF into growth (a good problem to have).

So with your projection of $48 billion in FCF for 2022-24, what can they do?
- pay down debt

• Tesla's total debt is only around $10 billion last time I looked

- buy back shares

• This is effectively a dividend with different tax implications, so I think we can rule this out

- pay dividends

• Elon just said this isn't coming any time soon

- purchase another company

• Maybe, but large-scale mergers and acquisitions are slow, difficult and prone to failure, so it'd be hard to spend all the FCF

- buy Bitcoin

• Meh, still too much FCF for this. They have quite enough BTC in my opinion and I wish they owned zero. Seems unlikely that they'd pile all their excess profits into BTC before paying a dividend.

- add to their cash account

• They already seem to have enough cash at $24 billion last quarter IIRC, and at a certain point they have more than enough dry powder to weather out any conceivable headwinds

All I can think of is that Elon is intimating that a massive, monumental increase in CapEx is coming soon, beyond that which we already know about that fed into your $48 B estimate. I can only think of one way to profitably spend that much in '22-'24 and beyond: Directing most automotive production away from consumer sales & leasing in favor of building the Tesla Network robotaxi fleet. At a unit production cost of let's say $24,000 each, that would fund production of about 2 million robotaxis while keeping cash and debt roughly constant.

Thoughts?

think back to battery day when he mentioned how many terafactories would be needed to fulfill the future demand for batteries…24b may be insignificant in the grand scheme, especially if they have to do the bulk of the heavy lifting on their own.

i tend to agree with him that this isn’t time to think about dividend. they are in hyper-growth mode despite the backdrop over last 18 months. but what do i know? i also didn’t think there was going to be a split (some here may remember me eating crow for that one )

 

[ZeApelido]

Another red flag, and supportive of the idea that NHTSA could soon turn hostile:

Biden to tap No. 2 official to head U.S. auto safety agency

President Joe Biden plans to nominate the No. 2 auto safety official to head the National Highway Traffic Safety Administration (NHTSA), the White House confirmed on Tuesday.

www.reuters.com

She posted this on Twitter on Sunday:

https://twitter.com/x/status/1449788572106625039

Amazing. Lest you not think these people aren't hacks, when Missy "published" a "peer-reviewed" paper criticizing Tesla's Autopilot the day before AI Day, Joe asked what the DOI was (a way to locate known, fully published research papers).

https://twitter.com/x/status/1428126166070689792

Unsurprisingly, no response was given. But I just realized this did happen:

 

[RobDickinson]

Even if they cant use the cash today they can scale up and use it in a few years, they are all about growth right now not being a cash cow.

 

[Nocturnal]

I echo your comments but perhaps not as grim as I originally thought.
I don't think the tweet below indicates she is a friend of FSD but at least it appears she has had some positive interactions with Tesla engineers in the past and that the channel of communication is healthy. Fingers crossed.

View attachment 723387

She also appears to be using the TSLAQ block list as everyone on Tesla twitter is blocked, and she follows TSLAQ.

IMO, what will happen is they develop some rules to try and slow Tesla down, but Tesla will just work around them and the rules will wind up harming competitors in the long run.

 

[Singuy]

Well, it is a law on the books. I wasn't commenting on the frequency of enforcement . . .

Hopefully she doesn't divest out, Tesla sues them and she gets fired if they become foes.

 

[elasalle]

https://twitter.com/x/status/1450568816895823874

NHTSA recently requested data - so hope here is that everything will be data driven

No more opinion bs

 

[Stormy24]

Damn,
Missy Cummings Twitter likes are full of $TSLAQ tweets.
WTF? No wonder Chanos revealed he was still short $TSLA. With his ties to the Biden administration, he knew that NHTSA will put the FSD program into cuffs

She also appears to be using the TSLAQ block list as everyone on Tesla twitter is blocked, and she follows TSLAQ.

IMO, what will happen is they develop some rules to try and slow Tesla down, but Tesla will just work around them and the rules will wind up harming competitors in the long run.

What has autopilot got to do with fsd ?

 

[hitchhiker]

Looks to me like she was right -- Tesla didn't put out a robotaxi service in 2020. Maybe she's just trying to temper irrational exuberance with some facts and knowledge. BTW -- her statement that they wouldn't be able to do it in 2020 doesn't mean she doesn't believe they'll ever be able to do it -- just that they need to pass a set of real world criteria to get there, and that criteria are hard.

 

[22522]

A day or so ago she said that people should not be able to enable their ADAS system when it will not work.

Tesla does this in agreement with her preference.

When I consider Tesla's approach, and the safety data it will produce, it will be difficult for someone who does not officially like carnage to stop Tesla.

 

[Gigapress]

NHTSA has jurisdiction only over the US and its territories. At worst, a hostile US administration can slow down Tesla's FSD release in America. Because most of the data collection from the fleet is here, this would slow things down but it's not a showstopper, because Tesla sells vehicles in dozens of countries.

Only one country needs to grant approval for the dominoes to start falling. If Canada, for instance, has robotaxis and all the benefits and the sky doesn't fall, Americans will clamor for the rules to be changed.

 

[Boomer19]

surprised many of you are worried about the new addition to NHTSA.
another over-confident, intellectually jealous shill for the establishment? or maybe not.

either way many of us are around long enough to have seen these tricks before. to those who are newer, a reminder that tesla is doing the right thing…that’s all that matters in the end.

FSD holds monstrous societal implications. know that it will not be a walk in park getting there. meanwhile, don’t worry about the day to day noise.

 

[thesmokingman]

Well, it is a law on the books. I wasn't commenting on the frequency of enforcement . . .

Unfortunately nothing will probably happen. Hell if they couldn't get a sitting President to release his returns or divest his interest... They can't even get a Fed President to stop double dipping...

Fed chairman sold up to $5 million in shares ahead of 2020 Dow dive

Federal Reserve Chairman Jerome Powell sold as much as $5 million worth of stock just before the Dow Jones Industrial Average tanked a year ago, according to newly reviewed disclosures.

www.yahoo.com

 

[RobDickinson]

NHTSA has jurisdiction only over the US and its territories. At worst, a hostile US administration can slow down Tesla's FSD release in America. Because most of the data collection from the fleet is here, this would slow things down but it's not a showstopper, because Tesla sells vehicles in dozens of countries.

Only one country needs to grant approval for the dominoes to start falling. If Canada, for instance, has robotaxis and all the benefits and the sky doesn't fall, Americans will clamor for the rules to be changed.

Follow the money.


USA has I would assume the highest update of FSD and the largest fleet.

Europe is busy protecting their own markets and manufacturers also.

China? Not a huge market yet for self driving?

 

[henchman24]

NHTSA has already taken a more aggressive stance against Tesla, and frankly, I think this is simply to be expected the closer to FSD full rollout. I'm sure the FSD team has been preparing for much more scrutiny for months and years. They'll be ready to fight. I'm not saying this is a nothing burger, but I'm sure Tesla is prepared.