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

[Spacep0d]

Perhaps stating the obvious here but here's how I see the near future;

1. The overall adoption of EVs worldwide is 2% but there's an enormous addressable market.

2. ICE sales are going to fall off exponentially....inversely proportionate to the exponential rise of EV sales. The best EV by a huge margin is Tesla. The only viable EV for longer trips is Tesla (Supercharging network). The safest cars (not just EVs)? Tesla again in the top two spots. Best range for the money? Tesla.

3. The Hertz deal was just a symptom of this sea change, but it's given investors lots of confidence too. As many of us have noted, Hertz rentals will generate buyers and Tesla-driving Uber ride-sharing will do the same. Hertz has hinted at another 50-100k Model 3s being purchased, which will amplify this vetting and confidence-building, even for the most recalcitrant. Those who are simply clueless about Tesla have more of a chance of understanding what's happening.

4. Tesla has the clear lead in EV development and also a robust charging network. No other EV really competes. Tesla is still expanding that network as they've promised. I see no real competition here from Electrify America, Chargepoint, EVGo, etc. Home-charging is the killer app for EVs for those who can swing it. Tesla's app update with live sentry mode monitoring (and the ability to talk through the car) is just hilarious and super useful. We tested it last night, perhaps a bit late, but appropriate for a Saturday night before Halloween. 'Step away from the vehicle'.

*Uproarious laughter*

5. Since mainstream analysts are *finally* starting to 'get it', this will strengthen TSLA even more and it helps buyer confidence too....even for those who seem overly committed to a specific analyst who's finally starting to get it.

So, there won't be linear sales of ICE continuing where Tesla has to compete for market share. We'll see a dramatic plummeting of ICE sales (long before the mandates prevent sales of new ICE vehicles) as Tesla demand continues to grow. Marques that don't have EVs (or competitive EVs) will find themselves WAY behind practically 'overnight', in the same way the super talented musician who's honed her craft for decades becomes an 'overnight sensation' when discovered.

The 'competition', even if they fully get it (a la Diess and company) can only do so much. Production as Elon reminds us is hell. Ramping up takes time. Costs for new competing EVs will be high and the customer will have to absorb that if they want to be different. Meanwhile, Tesla strengthens its clearly-dominant position in this space whilst attracting the best and brightest minds on the planet, with plenty of cross-pollination from the other set of best and brightest minds at SpaceX.

We're at a historic inflection point and the most dramatic paradigm shift since horses were replaced by internal combustion vehicles. It's a good time to be an investor, a Tesla owner, fan, supporter, and member of this great forum.

 

[jerry33]

Thoughts:

1. Watched who killed the electric car again last night. GM could just start back with the well loved EV1.

GM management hated that car so much that they likely shredded all the engineering designs.

 

[RobDickinson]

At this point I am shocked there is no other car company licencing tesla tech and production.


Borrow $5-10bn, licence teslas battery pack and drive train , make (lots of) cars.

 

[MD70]

My concern with the hertz deal and the rapid increase in the number of vehicles sold is will Tesla management stay on top of the service requirements?
That and supercharger issues at peak times (in some area’s) are in my view the main risks going forward in terms of the overall customer experience.

 

[MD70]

At this point I am shocked there is no other car company licencing tesla tech and production.


Borrow $5-10bn, licence teslas battery pack and drive train , make (lots of) cars.

As an outsider it’s the logical thing to do but nobody in the incumbents management seems to have the foresight to take the right course of action.

 

[Drumheller]

There is no disagreement here. The question is what else can be done to help the poorest. I understand those corrupted goverments are the ones to blame on screwing up their own ppl to begin with, and deter the potential aids out there. They would just block all aids if they don't get a big chunk, no matter thru Humanitaion Orgs or Elon's Org. It's tough problem to solve ....

It is tough and I agree that more can be done. Many of us have done well with our tsla investments. Each of us can give some back by helping people in our communities. Buy food, pay a bill, give a car to someone, etc. Each person doing that can make a huge difference.

 

[Ohmster]

To single out Elon is myopic….

Let’s Put To Bed The Insulting Notion That Elon Musk Is A ‘Crony Capitalist’ — Forbes

A valuation that has nothing to do with a federal subsidy, and everything to do with a future that politicians have no capacity to imagine, and as such, one they can’t subsidize.

apple.news

 

[RobDickinson]

Apple literally have $200bn cash in the bank, Microsoft have what $130bn.

All these huge corporations have plenty of wealth and value but because there are some relatively new tech companies with large chunks still owned by the people behind the company who create the company they are easy targets rather than offshore investment company 2738...

 

[Captkerosene]

The benefits of the subsidies should be viewed in total dollars per company ... not in dollars per car. Subsidy per car times number of cars sold. With that in mind, F, GM and whatever that other company is called won't be getting any subsidies because they will no longer be in business.

With that in mind, I still hate the subsidies. It made sense up to now to get things started, but with TSLA at a 1T market cap (and going much higher) it's just going to open us up to attacks ... as it should.

This is one of those things where I hope I lose the argument against the subsidies. Thousands of dollars per car on millions of cars (that are already very profitable) would lead to some truly obscene profits.

 

[UnknownSoldier]

Seems UAW/Biden were genuinely afraid that Tesla WOULD in fact form a union in order to gain access to the $4500, so they added this extra "employees cannot hold shares" provision to make sure Tesla is effectively explicitly excluded.

Corruption at the highest level....

The irony here is that Tesla hands out RSU's to just about everybody, it's how they compensate for the relatively low salaries they pay.

However because of a certain stock price, this means that many of the longtime factory workers in Fremont are going to be millionaires.

The UAW is furious that actual workers are getting money instead of their cronies.

 

[navguy12]

WTH is the methodology of this nonsense?!?

Maybe based on how many car loans were wade by “Finance Buzz”?

 

[Rarity]

Elon always fights for his right to compete fairly. The best needs to win.

He shouldn't have to fight on this one. Rep. Pelosi (California/Tesla), Sen. Feinstein (California/Tesla), Sen. Padilla (California/Tesla), Sen. Brown (Ohio/Honda), Sen. Warnock (Georgia/Kia), and Sen. Ossoff (Georgia/Kia) should be the ones fighting this because their constituents are getting hosed. Each of them individually is in a position to change this.

I can only assume that they believe it will be removed eventually for one reason or another, so no need to fight: the Senate parliamentarian, it breaches our WTO agreements, it would start a trade war with our allies, and it might be illegal and certainly would be challenged in court. I'm sure there are others. Maybe they think that the provision will be tossed and their labor bona fides will be burnished at the same time.

But even if he shouldn't have to fight this one, maybe he would do it anyways. It's a good opportunity to remind everyone that the UAW is irretrievably corrupt and shouldn't be in Tesla's factories.

 

[SunCatcher]

Anyone have any popcorn?

https://twitter.com/x/status/1454926841467256835

"Biden is a UAW

puppet"

LOL. I love Elon. On top of everything else I get out of joining his world, he makes me laugh. A lot.

Oh, I also like getting rich while feeling good about doing the right thing.

 

[Carl Raymond]

To single out Elon is myopic….

Let’s Put To Bed The Insulting Notion That Elon Musk Is A ‘Crony Capitalist’ — Forbes

A valuation that has nothing to do with a federal subsidy, and everything to do with a future that politicians have no capacity to imagine, and as such, one they can’t subsidize.

apple.news

After speed reading that article I felt it singled out Musk for high praise: If Tesla success was due to subsidies, where are all the other successes? Thus Tesla is a product of Musk’s genius.
Did I miss something?

 

[MC3OZ]

My concern with the hertz deal and the rapid increase in the number of vehicles sold is will Tesla management stay on top of the service requirements?
That and supercharger issues at peak times (in some area’s) are in my view the main risks going forward in terms of the overall customer experience.

Wait until Austin is pumping out Model Y, the target is to scale Supercharging and Service will vehicle production, because deliveries more or less scale with production..

Drew announced they are planning to triple the size of the Supercharger network over the next 2 years, tracked and proactively reduce congestion.

As for service,, so far I haven't needed any.... which is a good thing, as the nearest service centre is 90 minutes drive away...
Again I expect them to track service centre congestion and expand as needed.
I fully expect when Model Y begins volume deliveries in Australia, service will expands and there should be a service centre within 30 minutes drive...

Service has one additional problem Supercharging doesn't have, Tesla needs to recruit and train suitably qualified technicians, that is a challenge, and we don't want dud technicians..

 

[ZsoZso]

This is one of those things where I hope I lose the argument against the subsidies. Thousands of dollars per car on millions of cars (that are already very profitable) would lead to some truly obscene profits.

I do not understand what subsidies you are talking about...
Are you referring to the new US tax credits proposed ?
Those are not benefits to the car manfacturer, but to the customer buying the car.
Therefore, they do not intend to lead to any kind of extra profits (obscene or not), unless the price is raised to swallow it - as some unethical corporation would.
And right there lies the solution: just let the consumer pocket the "subsidies" and then the plan works as intended.

 

[Ohmster]

After speed reading that article I felt it singled out Musk for high praise: If Tesla success was due to subsidies, where are all the other successes? Thus Tesla is a product of Musk’s genius.
Did I miss something?

Yup. Read a tad slower. My comment was not addressed at the author but agreeing with his overall sentiment.

“The simple truth is that Elon Musk was never a crony capitalist. Those who made this argument were insulting genius and mangling a pejorative in the lean years, and so are they now.

To which some will reply that absent a federal subsidy of $7,500 per car, Tesla wouldn’t exist. To believe this view, Musk’s immense net worth was and is a consequence of politicians favoring the electric vehicle industry. Such a limited view requires more than a few responses.”

 

[Discoducky]

This is important, and I have worked very hard to include something for the Quant people here.

Executive Summary:

Full Self Driving (FSD) will be a great boon to humanity; however, early learning is characterized by uncertainty. This uncertainty would be vocalized in the words, "I am not sure." It is this uncertainty during learning that impedes our path to a much safer future.

Uncertainty is not new. There are standard ways to accommodate uncertainty and make progress. The key way being safety margin, or factor of safety. In traditional engineering calculations this factor of safety, or over design, varies from 2.5 to 10.

Tesla has more active and passive safety margin in their vehicles than any other manufacturer. The cars can accelerate, corner and stop faster than their competitors. This means that FSD Teslas can drive more safely than their competitors, even if the AI recognition speed is identical.

When differences are considered, it is important to know the basis for normalizing those differences. Consider for example braking distance, which can be converted into time. All these measurements should be normalized on clock cycles. As in, "How many extra clock cycles does Tesla provide for the AI computer to identify and act on a hazard without hitting it?"

I don't know that any other brand will have the fleet performance safety margin that Tesla has in the next two years, if ever. Cars that are already marginal on safety do not have any extra margin to allocate to the FSD adoption task. There is no headroom. Tesla, on the other hand, has designed their fleet with the safety margin to support adoption of FSD, including the uncertainty that occurs as the process is refined, This will make a gap happen in the time required to demonstrate safe FSD. This gap should eventually be recognized in the stock price.

This is sort of a latent capability sort of thing. Other manufacturers may be in a "can't get there from here" position.

Now for a quantitative analysis of factor of safety applied to today's mountain bike ride.

@Electroman

You asked if I might have a concussion.

My answer, upon reflection was, "Not sure."

So on today's ride, I copied Tesla by using:

1. The best Michelin tires in the world (DH22 with 2.5x the knob height and a 3 step fade on the edge block traction (vs. the typical 1 or 2 step traction fade)) FS = 2
2. A fork with 180mm of travel vs the usual 100mm. FS = 1.8
3. A dual suspension bike rather than the front suspension only bike. FS = 2
4. 4 piston hydraulic disc brakes with fin cooled pads and rotors. FS = 2
5. Flat pedals rather than clip in pedals. FS=1.8
6. Mega in the name. It is not Giga, but Nukeproof makes up for it!

I was able to safely complete the ride because I copied Tesla and the latent capabilities they designed into their product to support a driver who is not completely sure.

For all you Quant folks, there you have it! And for the visual folks, here is a picture:
View attachment 727803

Important points being:

• "Not sure" can be planned for and made safe. To succeed at Full Self Driving you have to do this.
• Tesla has done that safety margin improvement to their entire fleet. Under that sleek exterior Tesla has factors of safety in response time - like you see in the "lots of headroom for mistakes" bike above.

Thank you ELECTROMAN.

Friends don't let friends ride tubes. Please switch to tubeless. PM me if you need more incentive, I used to race, got 4th at Downieville one year! Downieville Classic Cross Country Race

 

[Thekiwi]

My concern with the hertz deal and the rapid increase in the number of vehicles sold is will Tesla management stay on top of the service requirements?
That and supercharger issues at peak times (in some area’s) are in my view the main risks going forward in terms of the overall customer experience.

The hertz deal has zero impact on vehicles produced and delivered in the USA. Tesla would produce and sell every one of those cars anyway. If anything it makes servicing ever so slightly easier as there is just one entity (an organized one at that whose primarily job is managing a vehicle fleet) that owns those 100k vehicles (rather than 100k individual owners).

 

[Skipdd]

As we all know, Tesla absolutely dominates EVs, but yet to dominate total market share. They'll need to make at least 10M/year to do that I suspect by 2025, but the momentum that is building now is the foreshadowing. I guess the market will just need to see Berlin and Austin fully ramped which I'm targeting Q4 next year to be that moment. Guessing a 2M/year runrate from all factories at that time.

What is going to be truly magical will be the inflection of the switchover to 4680s at volume when 2170s start being less than 50% of total volume production. Huge, crazy, off-the-chart margins. When this happens is more of a SWAG, but hoping for Q4 2022 as well.

IIRC, Apple stopped reporting # of phones sold at a certain point. It was at the point where people were questioning Apple’s ability to continue to dominate the smartphone space. I mention this because we could see a model like this play out with Tesla. Yes on the way up, having greatest number of units is important, but over time the profit per unit will matter more as will the other services and market segments. Just an observation.