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

[Singuy]

As of December 1, NIO has sold 80,940 vehicles in 2021 in China. Their battery swap is an option, not an issue, however a poor option IMHO. Tesla only surpassed 100,000 sales per year in 2017 and was selling in Europe and Canada well before then. NIO selling their vehicles in other Countries to take advantage of local incentive programs, and to gain recognition outside China would spur further demand inside China. Does NIO need to expand outside of China, the World's biggest auto market by a wide margin? No. Will they? Yes.
Disclaimer, I do not own NIO, and this deserves another thread here on TMC, so I'll pause the NIO talk.

Yeah but Tesla demonstrated that they were dominating in luxury 80-100k car sales well before 2017. Nio is no where near dominating the premium segment in China.

I feel that for any Chinese brand, if you are not dominating in your home turf then it's dead in the water (even if you are dominating you're probably dead in the water also). I always use cellphone marketshare as an indicator of this going forward because Chinese phones are cheap and GOOD. However they have an extremely difficult time breaking into 1st world marketshare in any meaningful way because people think of cellphones as a very important purchase(therefore you should splurge) and it's somewhat of a status symbol.

The crazy thing is if we look at where Tesla is ranked in China vs the other hundred different EV brands, it's number 1 even though BYD had the first mover advantage unlike when Apple penatrated China back in the days. . So in terms of where Tesla is at vs appl, it's not even a close call. Therefore people who thinks Tesla is in even a better position than Apple was a decade ago I tend to agree.

China Smartphone Shipments Market Share (%)
Brands	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021	Q3 2021
vivo	19%	16%	17%	18%	21%	23%	23%
OPPO	17%	15%	15%	16%	22%	21%	20%
HONOR	12%	14%	14%	9%	5%	8%	15%
Xiaomi	9%	9%	11%	12%	15%	17%	14%
Apple	10%	9%	8%	16%	15%	14%	13%
Others	33%	37%	35%	29%	22%	17%	15%

US Smartphone Shipments Market Share (%)
Brands	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021	Q3 2021
Apple	46%	46%	40%	65%	55%	53%	47%
Samsung	32%	25%	30%	16%	27%	26%	34%
Lenovo#	4%	7%	6%	3%	5%	12%	9%
OnePlus	1%	0%	0%	0%	1%	2%	3%
Others	17%	22%	24%	16%	12%	7%	7%

 

[OrthoSurg]

Mods - can you please delete this post. It contravenes EU directive 20.6.7.45.9 Exhibit 3, Amendment 5 parts 1 & 2. If they see this, the whole TMC site could get pulled down and nobody wants that.

According to EU directive 21.3.5.46 Annex A, this request will have to be put on hold before a committee is formed to study the possibility on voting on the subject 3 months after its assertion.

 

[LightngMcQueen]

With this trade you are receiving $7,400 as your max profit upfront in exchange for a max loss of $2,600. A share price of $1,400 by the end of 2023 is not a leap of faith in my opinion. In terms of downside risk I am exposing $2,600 for each of these put spreads.

Compare this to the $250 put and I am getting 9X the amount of cash upfront for the same amount of downside risk.

While I fully agree with the numbers you have presented, and really appreciate you for taking time to share them, I am afraid the way it will be read by many is that both trades have similar risk. So just to be on safe side I will attempt to explain why it is not the case.

What is missing is the probability of incurring $2600 loss, which is significantly higher with 2nd option. And the real risk is amount of loss times the probability.

The options are a bit confusing so let's use simple example:
Riding skateboard without knee protectors incurs max loss of scraped knee, yet riding it for 5h without knee protectors is 10X more risky than riding skateboard for 1/2h.

Lets guestimate probability of SP in 2024:
- being under $250 as 2%
- being under $1300 as 20% (I believe it is a bit higher than that)

The expected loss amounts on both trades are:
2% * $2600 = $52 ( this is max loss which would require price to go to zero .. if price is 125 the loss is only 1/2 of that)
20% * $2600 = $520

Of course 2nd trade gives 9X profit so actual risk/reward ratio is similar ... this is not an accident - MMs can do math quicker and more accurately than any of us.

Spreads provide leverage, the more narrower the spread the bigger leverage, but it is leverage in the same way margin is a leverage ... amplifies both potential gain and potential loss.

 

[winfield100]

Now that was a funny read.

" Tesla's share of EV sales is expected to drop dramatically as sales in the market increase. The company is expecting to sell 1 million vehicles/year by 2030, which is almost a decade from now. We see these numbers as optimistic, the rate of decline is expected to slow down after 2024; however, there's no reason why as competition increases it won't keep going down.

However, another takeaway here is that carmakers consistently have margins of less than 10%. Tesla's average automotive revenue per vehicle is ~$50 thousand. That implies 2030 profits of <$5 billion. That's minimal for a company currently valued at roughly $1 trillion. More so, it doesn't count the company's massive capital expenditures."

So they think Tesla will peak at 1 million sales annually and do less net income than they'll do this year........Gee I wonder if they're just a tiny bit worried about Q4 P/D and thus Q4 earnings since they're short. When articles are this desperate, we know we're on the cusp of a breakout

Their thesis risk should read as -

Thesis Risk....I'm stupid​

There is another potential reason for his thesis, since I recall he is short through derivatives 'n such.
perhaps he is represented here, in the. "nothing illegal going on" nothing abusive, from the official SEC, cynical and some experienced people usually know that when someone is saying something isn't happening, something is definately happening

example since August of FTD's, notice the blips going to almost $500 million and almost $700 million
nothing to see here though
(

here is a list of the values of the FTD's done by multiplying the number by the closing prices
these are millions of $$, like $476 million, $670 million. etc

date	FTD Value that day
8/3/2021​	$78,179,376​
8/4/2021​	$29,933,994​
8/12/2021​	$38,846,577​
9/20/2021​	$448,772,768​
9/22/2021​	$83,818,335​
9/28/2021​	$476,223,038​
10/6/2021​	$140,249,386​
10/12/2021​	$41,207,806​
10/18/2021​	$14,051,624​
10/19/2021​	$10,626,653​
10/25/2021​	$28,645,823​
10/26/2021​	$29,407,333​
10/27/2021​	$28,221,714​
10/29/2021​	$26,518,879​
11/1/2021​	$6,504,646​
11/2/2021​	$29,042,418​
11/4/2021​	$131,789,994​
11/5/2021​	$21,493,907​
11/8/2021​	$90,655,858​
11/9/2021​	$41,699,540​
11/17/2021​	$619,239,366​
11/18/2021​	$655,925,969​
11/23/2021​	$24,757,018​
11/24/2021​	$32,188,487​
11/26/2021​	$670,317,588​
11/29/2021​	$20,245,969​

could any of us avoid liquidation margin calls on numbers well below these, which seem to occur more and more
BUT
the SEC says
"This graph contains the date and total number of fails-to-deliver (i.e., the balance level outstanding) recorded in the National Securities Clearing Corporation's ("NSCC") Continuous Net Settlement (CNS) system aggregated over all NSCC members for TSLA. Data on or after September 16, 2008 include all securities with a balance of total fails-to-deliver as of a particular settlement date.
Please note that fails-to-deliver can occur for a number of reasons on both long and short sales. Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or “naked” short selling"

It seems false, the very old saying "he who sells what isn't his'n, must pay the price or go to prison"
Madoff went to prison, but got to keep the ill gotten gains and the madoff rule

link to SEC graph below

https://sec.report/fails.php?tc=TSLA

 

[Blue horseshoe]

While I fully agree with the numbers you have presented, and really appreciate you for taking time to share them, I am afraid the way it will be read by many is that both trades have similar risk. So just to be on safe side I will attempt to explain why it is not the case.

What is missing is the probability of incurring $2600 loss, which is significantly higher with 2nd option. And the real risk is amount of loss times the probability.

The options are a bit confusing so let's use simple example: Riding skateboard without knee protectors incurs max loss of scraped knee, yet riding it for 5h without knee protectors is 10X more risky than riding it for 1/2h.

Lets guestimate probability of SP in 2024:
- being under $250 as 2%
- being under $1300 as 20% (I believe it is a bit higher than that)

The expected loss on both trades are:
2% * $2600 = $52 ( this is max loss which would require price to go to zero .. if price is 125 the loss is only 1/2 of that)
20% * $2600 = $520

Of course 2nd trade gives 9X profit so actual risk/reward ratio is similar ... this is not an accident - MMs can do math quicker and more accurately than any of us.

Spreads provide leverage, the more narrower the spread the bigger leverage, but it is leverage in the same way margin is a leverage ... amplifies both potential gain and potential loss.

You're correct. Both trades do not have the same risk. What I was trying to point out was the downside risk and it's effect if people are utilizing margin for these trades. With the spread there was a max loss of $2,600 vs with the single $250 put trade the max loss is $23,500. So if the share price continues to fall, the $250 put will show a much larger dollar loss on paper, which can become an issue if too much margin is being utilized and the stock drops sharply in a short period of time.

Specifically I wanted to provide a warning that although I think $250 is ultimately a very low % chance of happening, there is an element of risk involved I wanted to explain.

 

[Words of HABIT]

Sam Alexander does some excellent research work on US Postal Service's multi-billion $ EV contract to defence contractor Oshkosh, with no EV experience. Oh my gosh.

 

[dhanson865]

Keep in mind Tesla‘s algorithm down-rates based on behaviors which are associated with high chance of accidents. High speed is not one of those things.

a random quote of the internet for some math:

The lateral g force you feel while driving a car around a curve is the result of the centripetal acceleration ac, which depends on two things: the speed of the car and the radius of the curve. The greater the car's speed around the curve, the greater the acceleration, as you'd guess, but ac goes up faster than the speed — it goes up with the square of the speed. The formula for ac is

That means increasing your speed in a curve by only 41% effectively doubles ac and the corresponding lateral g force.


By measuring the radius of the curve using Google Maps, I was able to calculate ac for different speeds. Taking the freeway exit at the 25-mph posted speed yields ac equal to 0.29 g; at only 5 mph faster, ac increases to 0.42 g.

Per the safety score documentation:

Aggressive Turning

Aggressive turning is defined as left/right acceleration, measured by your Tesla vehicle, in excess of 0.4g.

If you drive slow enough any turn will be below 0.4g so clearly high speed is part of the safety score.

If you to say driving straight at high speed isn't part of the safety score go for it. But just saying high speed isn't a factor is incorrect.

 

[lazybot]

Gelsinger Intel CEO in a recent interview on the topic of MobilEye spin off said "Only two companies in the world that can do leading edge autonomous technology Tesla and MobilEye". Bullish coming from a competitor CEO.

 

[ZsoZso]

For a good weekend laugh:

"Upcoming Merger: Tesla Will Swallow Daimler Without Asking"

What is behind such crazy rumor ?
Let's just ignore the fact that Tesla would gain nothing with such a hostile takeover, it would be complete waste of good money to buy a dinosaour on its way to extinction (taking on a whole bunch of debt in the process as a side-effect, so the value is effectively less than zero).
Is this a wet pipe-dream of Daimler investors ? Then they must be desperate...

 

[AudubonB]

I've not done a Weekend Big Post for a while - so here you go.

First, full disclosure: I am NOT under any kind of an NDA with Tesla at this time, but over the many years I have kept to myself material that I know Tesla would rather not have disseminated except when and how they choose to.

However.........in that I am ever more frustrated at having to drive around like my long-deceased mother, in order to maintain a "98" Safety Score - yet it seems to matter not one whit, even with having purchased one of the very first (maybe #1) P100D Ludicrous Model Xs delivered outside California (and, of course, with FSD prepaid).....

...and as it seems everyone else and her aunt has a blog about Tesla, throwing out secrets and photos and all other such -

well, why should I keep mum?

So -

the Tesla Semi, and some information you either haven't known or haven't heard specifically before...or from a source whose validity you do not know:

When you're cruising at 30mph, and you hit the Go Pedal - it smokes! As in: Literally - all four drivers burn rubber as it screams down the road - this is when bobtailed.

Its loss of power is barely discernable when you load your trailer to 80,000 pounds. That is: Like you cannot feel the difference At All.

The driver's seat is comfortable; everything is nicely within reach and the view forward is unparalleled. But: when you're backing up, esp of course in a tight situation, you do miss that view behind you to your left. Of course, that is because of the trade-off: your view to the right is a little bit better, so your view to the left is a little bit worse. But one does miss what one has become accustomed to - at least, if you're human.

It is an astonishing and marvelous creation.

Happy Christmas, all.

 

[Ipe]

Sounds like a very interesting book. Would very much like to read it. Too bad there seems to be no English translation.....

You are European, so what’s the problem mastering a second or third language?

 

[Ogre]

a random quote of the internet for some math:


Per the safety score documentation:

Aggressive Turning


If you drive slow enough any turn will be below 0.4g so clearly high speed is part of the safety score.

If you to say driving straight at high speed isn't part of the safety score go for it. But just saying high speed isn't a factor is incorrect.

If I’m trying to go from point A to point B, I can easily average 80 MPH+ without taking a turn at more than 0.4g.

High speed is not a factor.

 

[Words of HABIT]

I've not done a Weekend Big Post for a while - so here you go.

First, full disclosure: I am NOT under any kind of an NDA with Tesla at this time, but over the many years I have kept to myself material that I know Tesla would rather not be disseminated except when and how they choose to.

However.........in that I am ever more frustrated at having to drive around like my long-deceased mother, in order to maintain a "98" Safety Score - yet it seems to matter not one whit, even with having purchased one of the very first (maybe #1) P100D Ludicrous Model Xs delivered outside California (and, of course, with FSD prepaid).....

...and as it seems everyone else and her aunt has a blog about Tesla, throwing out secrets and photos and all other such -

well, why should I keep mum?

So -

the Tesla Semi, and some information you either haven't known or haven't heard specifically before...or from a source whose validity you do not know:

When you're cruising at 30mph, and you hit the Go Pedal - it smokes! As in: Literally - all four drivers burn rubber as it screams down the road - this is when bobtailed.

Its loss of power is barely discernable when you load your trailer to 80,000 pounds. That is: Like you cannot feel the difference At All.

The driver's seat is comfortable; everything is nicely within reach and the view forward is unparalleled. But: when you're backing up, esp of course in a tight situation, you do miss that view behind you to your left. Of course, that is because of the trade-off: your view to the right is a little bit better, so your view to the left is a little bit worse. But one does miss what one has become accustomed to - at least, if you're human.

It is an astonishing and marvelous creation.

Happy Christmas, all.

@AudubonB, sooo, Tesla won't yet let you drive FSD Beta on your Model X, but gave you a Semi instead?

 

[Paracelsus]

Sam Alexander does some excellent research work on US Postal Service's multi-billion $ EV contract to defence contractor Oshkosh, with no EV experience. Oh my gosh.

Very informative video - thanks for sharing @Words of HABIT -
Where the hell is the outrage from Senators Warren and Sanders regarding this debacle? Perhaps Sen Warren conveniently overlooked this because it was a high-profile military contractor that won the award to produce post office EVs? (Until she ran for President her military budget voting was lock-step with Mitch McConnell and WarHawk republicans) ……..which of course leads me to wonder if her attacks on Elon were intended in part to draw attention away from the fact that Tesla and Tesla alone is probably the only US Company that should be winning any EV performance-based federal contracts on a scale such as this. All of the Sunday morning ‘news’ shows she made herself available for over the last couple decades to publicly attack wasteful government spending and then one of the largest contacts to-date for sustainable energy & transportation is solicited to solve the concerns that she used for her platform in her campaign- and she is too busy attacking the person who propelled the only company in the US into a position to have been rightfully awarded such a contract. Machiavellian Politics at its finest.

Perhaps of equal irony is that it appears that GM had completely failed to put themselves in serious contention for such a contract and yet we were told ‘they led.’ Had GM won such a federal contract to replace all post office vehicles with EVs using existing vehicles they were already producing, those comments would be much more palatable - albeit still misplaced. Nope - instead a military contractor with no previous EV experience wins the contract using a slightly modified Ford diesel Transit van.

We are almost to January 2022 - two years into what many of us believed would be a new paradigm - and only Tesla appears to be moving the needle - and they are doing so using the same strategy they used under the previous administrations while currently being the company who’s name must not be spoken out loud……..however slandering and baseless attacks on its CEO will not be publicly discouraged in any way. You can’t make this stuff up. Please - someone on TMC write a book about all this from a 50,000 foot level instead of down in the weeds. It would be a wonderful sequel to The Emperor Has No Clothes.

 

[Ogre]

For a good weekend laugh:

"Upcoming Merger: Tesla Will Swallow Daimler Without Asking"

What is behind such crazy rumor ?
Let's just ignore the fact that Tesla would gain nothing with such a hostile takeover, it would be complete waste of good money to buy a dinosaour on its way to extinction (taking on a whole bunch of debt in the process as a side-effect, so the value is effectively less than zero).
Is this a wet pipe-dream of Daimler investors ? Then they must be desperate...

Don’t need to watch the video to know this is nonsense.

Other than the brand names, there is nothing Daimler owns which is interesting to Tesla.

It is possible that some auto companies are currently worthless. The liabilities and debt stacked up may be higher than the actual value of the underlying businesses. This won’t be clear for a few years yet.

 

[heltok]

The delays for Giga Berlin continue.

https://twitter.com/x/status/1472176869617373184

My feeling is that these documents from ”experts” are actually from other government officials. So this government agency is saying ”the delay is not our fault, Tesla has not submitted the documents” is probably because another government agency is taking their time to give Tesla the documents rather than Tesla screwing up and not realizing that they need to submit a simple form.

My experience with German bureacracy has been awful. I once spent 3h trying to pay customs at the border after the police scammed me(probably because he disliked my Tesla) with this conversation:
-Do you have anything to declare?”
-No.
-So if I look through you car I will not find anything you bought in Switzerland?
-I bought a pair of jeans and a watch.
-Then we have a problem! You lied to an officer, please step out the vehicle!

1h of them opening every bag in my car, 1h of them trying to enter the items into their system, 1h to get their VISA card reader to work so I could pay. Took 4 people 3h to process my jeans and watch customs payment.

(I didn’t know that you had to declare every item you bought in Switzerland from the land border, thought they only meant drugs, alcohol, tobacco etc)

/end rant

 

[Lessmog]

@AudubonB, sooo, Tesla won't yet let you drive FSD Beta on your Model X, but gave you a Semi instead?

Slightly used prototype, one owner, only minor damage from a rubber cone on left hind flank? Low mileage. One of a kind. Serial models may differ.

 

[Lessmog]

My feeling is that these documents from ”experts” are actually from other government officials. So this government agency is saying ”the delay is not our fault, Tesla has not submitted the documents” is probably because another government agency is taking their time to give Tesla the documents rather than Tesla screwing up and not realizing that they need to submit a simple form.

My experience with German bureacracy has been awful. I once spent 3h trying to pay customs at the border after the police scammed me(probably because he disliked my Tesla) with this conversation:
-Do you have anything to declare?”
-No.
-So if I look through you car I will not find anything you bought in Switzerland?
-I bought a pair of jeans and a watch.
-Then we have a problem! You lied to an officer, please step out the vehicle!

1h of them opening every bag in my car, 1h of them trying to enter the items into their system, 1h to get their VISA card reader to work so I could pay. Took 4 people 3h to process my jeans and watch customs payment.

(I didn’t know that you had to declare every item you bought in Switzerland from the land border, thought they only meant drugs, alcohol, tobacco etc)

/end rant

Well, it's a hill of a country anyway. Run around it if you can.

 

[AudubonB]

I PAID FOR that FSD......... And besides: think of how many shares that meant in 2016 and how much they would go for now.

 

[nativewolf]

Sam Alexander does some excellent research work on US Postal Service's multi-billion $ EV contract to defence contractor Oshkosh, with no EV experience. Oh my gosh.

oshkosh builds lots of things and is not an "military industrial complex" sort of company like Northrup, BAE, etc. They actually had to do the same sort of battle vs the big guys that SpaceX did to break into some of the contracting- took a contract from BAE. Sometimes they are not perfect but the products that I know are top notch- skytrack and JLG lifts.