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

[neroden]

What could Tesla do with a Model S refresh that makes it attractive but requires the least rework?

Probably not the least rework, but if I were there, my top priority would be massively streamlining the interior electronics / wiring harnesses... cutting costs sufficiently to cut the price of the car while raising margins.

 

[Mader Levap]

Anyone that is fighting negative opinions should think about it: what is your role in suppressing fair exchange of opinions and free speech?

No amount of disagrees will make your post vanish from forum. Calling click on disagree "suppressing fair exchange of opinions and free speech" is utterly ridiculous and nonsensical.

Protip: stop whining.

 

[Tenable]

Well, Musk also thinks that Tesla can't do it alone. :shrug:

That said, the vast majority of people with cars have exclusive parking spaces where it's easy to install chargers. (Way more than half.)

I've gone through the data on this.

In Japan, by law you have to have a parking space in order to register a car.

In other countries, there are two populations who don't:
1 - freeloaders who park their cars in street parking (originally intended for daytime visitors) overnight, while living in houses or apartments originally designed for car-free living. This happens almost entirely in big city neighborhoods developed before automobiles. Frankly this is a pretty small fraction of the population, well under 10%, and if these areas went back to being populated by people who live car-free, everyone would be better off.
2 - people whose spaces are in large shared lots or garages while their apartments are off to one side in high-rises. It's also very feasible to install chargers in these lots, it just requires a lot more landlord interest, so it'll happen late. But it'll happen as charging becomes a desired perk. This population is also smaller than most people think.

Together, these add up to less than a quarter of people who own cars. So I just don't think it's an issue.

4+ years ago we pestered our building to install electric car chargers. It was a higher end highrise so they relented and installed them. Best of all, with no charge. When we moved out 3 years later there were half a dozen Teslas in the building and a handful of other plug ins. I assume with the model 3 out this should only gain momentum with time.

 

[ZachF]

That didn’t age well.

It's only slightly worse than him pimping Bear Stearns just before it collapsed

Here is Jon Stewart skewering him for it:

 

[EVNow]

Good luck getting your dealerships to push EVs when they know there's less money to be made in service.

This is a myth. They will find a way to make it work for the dealers, if they are interested.

When Nissan Leaf was selling well, my local dealer was selling them very enthusiastically. Infact in the Seattle area Leaf was the largest selling Nissan model. They even got quite a few CHAdeMO installed when they moved to a new facility and had the Governor do the ribbon cutting ceremony - except they cut the gas pipe. Yes, its the same Inslee who is running for President on Climate Change.

 

[neroden]

I know it’s not a parallel because of the cost disparity, but how long after reservations were cleared for the S & X was leasing offered?
Might give a guide for when it’s offered for the 3 as an additional, and substantial, demand lever

Don't remember, but it was on the order of a year or two?

(Edit: someone else has answered, and it was 10 months after first S deliveries that leasing was offered.)

 

[neroden]

My first call options expired worthlessly last week. I’m afraid many other calls I hold with Jan ‘20 and Jan ‘21expiry might face the same fate... I have $320, $365, $385 strikes and paid a pretty penny for those years back when TSLA was trading somewhat comfortably in the $300+ range.

Never ever would I have thought with where the company is today in terms of sales growth and maturity that we are back in the mid $200’s...

I keep my hope on a summer rally to get rid of all my calls (they’re all on margin—about $240K) at break-even. $400 seems a pipe dream, I very much doubt it will ever happen.

Buying calls on margin is double leverage -- really very dangerous. Particularly OTM or near-the-money calls.

I fully expect TSLA to see $400/share, but I'm not willing to put a deadline on it. Might be Jan 2022. By using calls you're betting on it happening before a date certain.

I find I like to be on the right side of time decay (though I did OK on a few calls I bought during the SolarCity merger). So I have sold some deep OTM covered calls with short expirations (I might get unlucky and have the stock shoot past the strike, so I am cautious). And I have sold a hell of a lot of OTM puts (some have executed, which is OK; most have expired; some have been bought back at a profit after they went into the money). Deliberately bought stock by selling ITM puts a couple of times.

 

[Zhelko Dimic]

Very sensible point, impressive that he sees this clearly that far. I think the conventional car company are in biggest dilemma of how aggressive they have to be in EV transition. Too fast and they can hurt their traditional business by diverting all cash flow. Too slow and they are out of business altogether. So 2025 seems a good round number...but nobody can surely say when it actually will be. If it is up to Tesla 2025 may be too late.

I think they all get it now, at least smarter executives. Time for caution is gone.
They're trying to pivot at the speed they can sell to their Boards of Directors.
But they've never done it, for decades they've evolved what they had.
They need to rebuild organization with new skillsets, and while some components are common, much is new.
There is no guarantee they'll succeed. Companies that are pivoting hard have more chance than others: Volvo, GM, VW, Jaguar, even Mercedes, maybe BMW, many Chinese companies...

 

[neroden]

I wouldn't get hung up on the details of whether the range loss is 30% or 50% since it really varies, but don't disregard the idea that you will get MUCH less range in cold weather. Depending upon the conditions - temp, wind, road - you are quite likely to experience range loss of somewhere around 30-40%. My wife drives our 100D model X almost daily between Appleton and Milwaukee, roughly 130 miles each way. When it is colder here (-10 to 20 f), she loses 30-40% of her range.

30% is about right for the S in that weather. (X might lose slightly more.)

If the weather's over 25F, the range loss is much less.

 

[Tenable]

Buying calls on margin is double leverage -- really very dangerous. Particularly OTM or near-the-money calls.

I fully expect TSLA to see $400/share, but I'm not willing to put a deadline on it. Might be Jan 2022. By using calls you're betting on it happening before a date certain.

I find I like to be on the right side of time decay (though I did OK on a few calls I bought during the SolarCity merger). So I have sold some deep OTM covered calls with short expirations (I might get unlucky and have the stock shoot past the strike, so I am cautious). And I have sold a hell of a lot of OTM puts (some have executed, which is OK; most have expired; some have been bought back at a profit after they went into the money). Deliberately bought stock by selling ITM puts a couple of times.

I've got some pretty liberal rules on my account and I have never seen the ability to buy calls on margin. Unless perhaps you're talking portfolio margin against some other equities. Are you able to do so somehow / somewhere? I'm curious.

 

[neroden]

Also crossed my mind.

There's really nothing they can do the last few weeks of a quarter that would require an expanded ABL. 3rd month cash inflows overwhelm any possible "pedal to the metal" move. The only way they'd need to expand it this month is if the death cult is right about cars piling up on lots without buyers. You don't even want to hear their nutcase theories about the ABL expansion.

In reality, the ABL expansion is for when they start loading boats again next quarter.​

....which is happening really really soon. It takes a few days to produce a car, right? They're probably going to be switching back to European production within the next week and loading the boats at the beginning of April.

 

[RobStark]

It’s been awhile since I graduated college, but

Asia + North America + Europe = 3 continents, right? Why is Elon saying 2?

Maybe I’m getting the math wrong somewhere.

Some geographers assert Eurasia is one continent. Europe is a peninsula off the Eurasian continent that is political idea,but not a continent.

In Latin America, they teach "America" is one continent. What we call North American and South America is one.

In the British school system there are 5 continents. Australia and Antarctica are just islands like Greenland.

 

[Zhelko Dimic]

No amount of disagrees will make your post vanish from forum. Calling click on disagree "suppressing fair exchange of opinions and free speech" is utterly ridiculous and nonsensical.

Protip: stop whining.

See, I feel this is a disrespectful and bully type of response.

 

[neroden]

OT

The ancient Greeks had a pretty ingenious method to filter out self-selecting politicians: they chose city officials by random ballot.

Like jury duty.

I've suggested that we pick all our elected officials by sortition (randomly from the population), with people being allowed to refuse the job (I think you can't avoid this, although in Athens it was considered your duty and you'd go to prison if you refused),.... and with recall elections available with sufficient petition signatures.

This is on the theory that the people are really bad at picking in advance who should be in office, but the people can definitely tell when they've got a disaster in office and need to throw the bum out. I think there's a lot of support for this theory.

 

[neroden]

I’d be careful right now. A single judge’s decision has the power to spike or crash the SP in the near term and we have no indication which way she’s leaning, or when that decision will be made. I’m holding off on doing anything until that clears. Either side, bears or bulls, could get wiped out.

I wouldn't screw around with short term options trading or margin, but if you own shares outright long-term, you aren't going to get wiped out. The company's fundamentals have never been more solid (despite continuing service & software issues).

 

[lascavarian]

Referrals are back!!

 

[Silent Ludicrosy]

Karen, saw your tweet. You can use my referral code if you want .

 

[neroden]

Semi OT

OT ish, if anyone wants some Grimes insight, a few mentions of Elon

Outline - Read & annotate without distractions

(Musk says via email, “I love c’s wild fae artistic creativity and hyper intense work ethic.”)

This is why she's the first suitable love interest Musk has had. He needed someone as married to their job as he was.

 

[Singuy]

Volvo’s Chief Executive agrees with basic developing dynamics of auto industry as discussed in this forum for years,


"It's very difficult to say if we're going to have the same margins in 2025 as we had in 2015 ... because electric cars are very expensive," Chief Executive Hakan Samuelsson told Reuters on the sidelines of a safety showcase by the company in Gothenburg.

"But I would be absolute sure we will have the same margins with electric cars as we will with conventional combustion cars in 2025."

Samuelsson said the convergence would be helped by reducing costs for components such as batteries and declining margins on conventional cars.“


Volvo expects electric car margins to match conventional vehicles by 2025

I think car manufactures will start have a rude awakening. There's going to be a time when these car manufactures may just scrap their products all together(kind of like the Volt) when people are not buying.

A lot of talk already about how there are only so many people willing to buy electric, therefore Tesla is having a demand problem. IF Tesla is really having a demand problem with the most efficient, best looking, longest range, most high tech, robust charging infrastructure and a rockstar CEO behind the product, then I say goodluck to every other company that are trying to take the nonexistent marketshare.

This I feel is the final cross road for legacy car companies and it's a really tough one. Is the future electric? If the future is electric, will people buy a product at a higher price, less robust charging infrastructure and unproven less efficient power train?

IF these are computers on wheels, ask yourself when the last time a CPU brand that is SLOWER, cost MORE and incompatible with the major operating systems end up beating Intel? Do you think a high build quality case with no panel gaps would sell said computer? This simply doesn't exist because no computer manufacture would design and market such a product. It's literally suicidal.

So the legacy manufactures already lost. There's really no way around this until they jump on the tesla supercharger train and use their power trains. It's like the good old wild west of computing that every computer must be IBM compatible or else it's a dud. So the only thing they have is their ICEs to compete, hence the constant attack on electrification and Tesla. They know that Tesla have created a monster that IF the future is electric, then any car needs to have something "Tesla Inside"(haha tm Intel) or else you have no audience that would care.

Like how can anyone recommend an Ipace right now? The car is nicely made with good build quality but it lacks the basic fundamentals! It has less range AND a terrible charging infrastructure at 2x the cost of a Tesla. You just don't wish that on anyone because it just doesn't make sense.

 

[Singuy]

Referrals are back!!

I am still wondering what happened to my limited edition hat they were promising me.