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

[Curt Renz]

Gary’s calculation: $10.8B
Musk’s words: “over 11 billion”.

Huh? How does Gary deduce he’s done? His own calculation implies he’s not quite done?

Perhaps he has enough in his piggy bank to cover the rest.

 

[dhanson865]

If the trucks are electric, you can drive/index them through an enclosed space.

If the trucks aren't electric you have them drop off outside the factory and a Tesla semi bobtail picks it up to take it inside.

The deisel bobtail can go wait on the other side for it's original trailer for a smaller supplier or more likely just pick up another random trailer that needs to go back for the bigger suppliers.

 

[StealthP3D]

Step 1 for Mercedes' chance to survive is a decent product - which the EQS appears to be. It will be interesting if they can figure out how to scale and get their EV supply chains in order.

Mercedes won't need to scale much higher because cars in that price range are a niche product. It's doesn't even have the kind of performance credentials that will help the Model S Plaid sell well beyond volumes typical for its price range. It never hurts to be the fastest production car ever made!

Mercedes challenge is not scaling, it's that little thing everyone seems to overlook, making it at a good profit. When you are selling in very small volumes you need very high margins to make it move the needle much. Without knowing the details, I would say this is a car that makes sense for Mercedes so they can continue to sell their high-end ICE cars without paying huge pollution fines.

It's not hard to make a nice luxury EV, its a lot harder to make it at a good profit. Someone has to pay for all those batteries and the weight of all those batteries begets more batteries, more batteries beget a heavier frame, bigger suspension components, better brakes, higher load tires that are more expensive and less efficient and all this begets more batteries to compensate for all that weight and heavier tires. Inefficiency is the exact opposite of a virtuous feedback cycle, (perhaps we should call inefficiency an atrocious feedback cycle). In any case, the net result is a high cost to manufacture vs. a car just as luxurious but with an efficient powertrain. Consumers might not care much about efficiency, but one costs more than the other to make. And one drives better than the other because it's lighter (by more than the difference in battery weight).

Manufacturers are forced to price their products at a price they will sell at, it's not a "cost plus" situation. And they have to be strategic about pricing because costs go down as volumes go up. The EQS may be Mercedes flagship premium luxury car, but I doubt it's going to help them make a profit because it's very heavy car that can only be sold in small volumes.

 

[Jack6591]

Paywalled…

Goldman Sachs has cut its forecast, based BBB not passing.

Goldman Cuts U.S. GDP Forecast as Biden Economic Agenda in Doubt

Goldman Sachs Group Inc. cut its forecast for U.S. economic growth after Senator Joe Manchin rejected the Biden administration’s roughly $2 trillion tax-and-spend program, leaving Democrats with few options for reviving the economic agenda.

www.bloomberg.com

 

[StealthP3D]

I drove my June-2020-built Y with FSD, Premium Connectivity and every form of data sharing activated to Minnesota from Arizona two weeks ago. Somehow, after leaving Arizona, my Safety Score jumped to 99 from 98. So for two weeks I put on approximately 1500 miles with a 99 Safety Score, excitedly waiting for my FSD Beta upgrade. Never got it.

Driving across rural southeastern Colorado early one morning, with almost no one on the road, I plugged into the Trinidad, CO, supercharger, and found my score dropped to 98. I'm heavily dinged on "Unsafe Following," which currently stands at 7.3%. Since activating Safety Score I give people soooo much room in front it's laughable, I slow waaay down when people pass and move in front of me it's obnoxious, and, in its own way, I feel more dangerous/risky the way I drive trying to maintain my 98 score. My "Forced Autopilot Disengagements" and "Forward Collision Warnings" are both zero, "Hard Braking" 0.7%, "Aggressive Turning" 0.1%.

I don't know if Tesla geo-locks FSD Beta or what, but something is amiss, at least with my car or account. I've bought two brand new Teslas, both with FSD, so have spent $16k in the last 3 years on FSD alone. I've never been in an accident of any kind, not even a minor one. Tesla has years of safe driving history with me; I don't know what more I can do.

I know how you feel. And I know what you need to do. Your mission, should you decide to accept it, is a short but dangerous one. You will face numerous dangers before completing the short mission but perhaps not the type you are expecting. No, the biggest dangers will be to your psyche, it will require you to compromise your integrity, the very core of who you are and what you stand for. Yes, you will need to sell your soul to the Devil. If you feel a piece of software is worth all of this, you will find the gory details in these two posts:

Edit: It looks like TMC links are messed up

If the plan goes awry, I will be forced to disavow any knowledge of you or this communication. This message will self-destruct in 5 seconds.

 

[Skipdd]

Paywalled…

Goldman Sachs has cut its forecast, based BBB not passing.

Goldman Cuts U.S. GDP Forecast as Biden Economic Agenda in Doubt

Goldman Sachs Group Inc. cut its forecast for U.S. economic growth after Senator Joe Manchin rejected the Biden administration’s roughly $2 trillion tax-and-spend program, leaving Democrats with few options for reviving the economic agenda.

www.bloomberg.com

Thanks. I was able to see it. I misunderstood when I saw “forecast;” this is GDP not Tesla. Makes more sense now.

 

[StealthP3D]

My parents have a Model Y being delivered next week. The delivery specialist said it was coming from Texas. Is it possibly one the first Model Y’s manufactured at the new factory? Why else would it be coming from Texas if they can’t even sell cars there?

Nice! What state do your parents live in? I'm just wondering where they are shipping the first Texas cars here at the end of the quarter.

 

[UnknownSoldier]

Not trying to get political here, but I do want to state this and keep it strictly about investing in Tesla.

In terms of our investment in Tesla, the death of BBB is a huge win for us. We don't need a tax credit. Our backlog of orders stretches into 2022 and we're about to get 2 factories open to really start cranking cars out. We have proven people want our cars, they will pay for our cars without a tax credit, and we still have a massively growing TAM over the next decade. Due to the power of legacy dealership networks, we still can't even legally sell our cars in half of all the United States. And then there's the rest of the world where Tesla hasn't even established a market presence yet.

In terms of the auto industry, the death of BBB is a huge win for us. Legacy auto is not making positive margin on their EV's. They know this. We know this. They were counting on free money from the government to assist them in the transition from ICE. That money seems to be off the table now. This will really hurt legacy auto, and the more it hurts for them, the larger our TAM grows to fill the void they are leaving by being unable to produce vehicles at scale and at sustainable margin for them.

In terms of the climate change, the death of the BBB is probably a wash. There were some clean energy spending initiatives in BBB but realistically they were a small part of a much larger omnibus bill which mostly focused on social spending. The benefits to Tesla will easily balance out the loss in government spending on clean energy in the long run and may even outweigh the losses in clean energy spending in the long run if the decline of legacy auto accelerates over the rest of the decade.

In terms of the stock market, I guess we'll see. So far the market isn't looking like they will take it well in the short term. In the medium or longer term, I don't think it will be a significant effect on the market as most of the BBB was social spending which isn't directly going to benefit or detract from the market's trajectory. Which is firmly upwards, because you can count on stock markets to rise during inflationary periods as a strictly mechanical result of the decline of a currency's value.

 

[CorneliusXX]

Mercedes won't need to scale much higher because cars in that price range are a niche product. It's doesn't even have the kind of performance credentials that will help the Model S Plaid sell well beyond volumes typical for its price range. It never hurts to be the fastest production car ever made!

Mercedes challenge is not scaling, it's that little thing everyone seems to overlook, making it at a good profit. When you are selling in very small volumes you need very high margins to make it move the needle much. Without knowing the details, I would say this is a car that makes sense for Mercedes so they can continue to sell their high-end ICE cars without paying huge pollution fines.

It's not hard to make a nice luxury EV, its a lot harder to make it at a good profit. Someone has to pay for all those batteries and the weight of all those batteries begets more batteries, more batteries beget a heavier frame, bigger suspension components, better brakes, higher load tires that are more expensive and less efficient and all this begets more batteries to compensate for all that weight and heavier tires. Inefficiency is the exact opposite of a virtuous feedback cycle, (perhaps we should call inefficiency an atrocious feedback cycle). In any case, the net result is a high cost to manufacture vs. a car just as luxurious but with an efficient powertrain. Consumers might not care much about efficiency, but one costs more than the other to make. And one drives better than the other because it's lighter (by more than the difference in battery weight).

Manufacturers are forced to price their products at a price they will sell at, it's not a "cost plus" situation. And they have to be strategic about pricing because costs go down as volumes go up. The EQS may be Mercedes flagship premium luxury car, but I doubt it's going to help them make a profit because it's very heavy car that can only be sold in small volumes.

Traditionally Mercedes have been able to command high prices for their luxury ICE sedans and options. It will be interesting to see whether the same factors that allowed them to charge high prices will translate into the EV world. Not cost plus but there were already wide margins to play with.

 

[Criscmt]

Stock price and new Tesla workforce, in Austin and Berlin

I was wondering if there's a case for TSLA to be kept more affordable till the time the new workforce comes onboard?
Could it be that Elon has that (also) in his mind, and not letting the stock rise too much before that workforce comes onboard?
Even for those new employees to whom offers were sent out, the RSU strike price is set on the first time when the board meets after the employee starts with the company.
If this hypothesis were true, would Elon, and Master of Coin prefer a rise in Tesla after the factories have most of the workforce onboard?

(Perhaps this was discussed earlier, I am way behind on the messages in this thread)

@Artful Dodger @FrankSG @generalenthu @st_lopes @StealthP3D @The Accountant

 

[StealthP3D]

Traditionally Mercedes have been able to command high prices for their luxury ICE sedans and options. It will be interesting to see whether the same factors that allowed them to charge high prices will translate into the EV world. Not cost plus but there were already wide margins to play with.

Wide margins on ICE cars doesn't translate to wide margins on EV, particularly extra heavy, inefficient ones that require so many batteries to hit their range targets.

 

[dl003]

Gary’s calculation: $10.8B
Musk’s words: “over 11 billion”.

Huh? How does Gary deduce he’s done? His own calculation implies he’s not quite done?

Gary is doing it wrong. He's only calculating taxes owed on the discretionary stock sales. The 10b5-1 sales incur taxes too.

 

[StealthP3D]

Made 'in house'?

A substantial part of that lot will be made by companies tesla bought hibar systems, Maxwell, grohmann engineering. Some other parts not.

The production equipment not made by Tesla is typically custom spec'd and/or modified by Tesla. Nobody can replicate what Tesla is doing just by buying a bunch of production equipment from suppliers and setting up a factory. I've heard somewhere this is difficult, but people still can't grasp that.

Elon has the best teams in the world, and he knows it.

 

[StealthP3D]

Because its the middle and up classes buying them.....hello!?!?!

That's pretty much who buys ALL new cars. Middle class and up.

 

[StealthP3D]

Hertz Begins Installing EV Chargers For Its First Tesla Model 3 Rentals - CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News! Hertz has started installing EV chargers for some of its first Tesla Model 3 rentals, Drive Tesla Canada reports. Hertz is preparing for the rise in customers choosing an EV over an ICE vehicle ... [continued]

cleantechnica.com

TL; DR: "Hertz has started installing EV chargers for some of its first Tesla Model 3 rentals, Drive Tesla Canada reports. Hertz is preparing for the rise in customers choosing an EV over an ICE vehicle and is installing EV chargers at some of their rental lots. One such lot is at the Fort Myers International Airport where a recent permit, issued last week, showed that Hertz is building Tesla chargers for its new vehicles. The valuation of $50,000 shows that this will be a pretty large charging station."

I love this because it was only a couple of years ago that people naysaying a fast transition to EV's were using rental fleets to support their argument. Because rental companies are not going to rent EV's for decades! Obviously.

 

[StealthP3D]

This being an investment forum, what is the near term impact on TSLA of the failure of BBB to pass? Between that, EM selling, and shorts, will this create a triple threat buying opportunity for the first part of the upcoming week?

It's really hard to separate out various bits of news and attribute it to moves in the share price. On the face of it this would appear to be a negative for TSLA since it could have helped supercharge their near-term margins. But things are not always so simple. Because over the long-term it could also reduce Tesla's access to batteries and raw materials by encouraging less profitable EV makers to make more of them making it more difficult for Tesla to source common components. But that's looking forward more than a couple of years. But, keep in mind, the current share price is looking forward as well.

In the end it's impossible to say how educated the current participants in TSLA share trading really are which makes it difficult to guess the impact. My best guess is it's a wash and won't move the stock too much one way or the other.

 

[StealthP3D]

Nothing.

Near term, Tesla still has a backlog for 6+ months, they’ve survived prospered without incentives for 2 years now.

Longer term, Tesla is best positioned margin wise to produce EVs cost competitive with ICE.

I had to fix that for you. Because Tesla was struggling when they had $7500 incentives on each car. Their margins climbed as the incentives phased out and are now, by far, the highest they've ever been.

 

[StealthP3D]

Stock goes up. Tsla and the market in general does the opposite of the obvious. This is why so few people actually makes money from stocks.

I would put it differently:

Good stock goes up a lot, people sell. That's why so few people actually make real money from stocks. Because it's only after the fact they realize "a lot" was only a little.

 

[StealthP3D]

Some of my posts were deleted...ok, fine. I am emotional about this. One dude is blocking ANY time of progress.

All the reasons you guys have stated why it should not be passed are NOT the reasons Joe gave. So he is not even on your train of thought.

Last admin nothing was done and now this one. SOMETHING has to happen.

We have progress in spite of government involvement, not because of it. The government is necessary to keep capitalism from working against the people, but they need remember, their job is primarily that of a referee and no one likes a referee that tries to throw the game to their favorite team.

Note: The SEC uses too much "restraint" in carrying out the duties assigned to them, and this leaves them too much time to interfere where they are not needed.

 

[StealthP3D]

It’s becoming more and more clear that Ford and Tesla are really the only two legitimate players in the EV arena. GM will probably survive. Ford needs to sell its Rivian stake ASAP. Rivian is going to zero

Rivian is not going to zero anytime soon. While extremely over-valued at $100/share, I do think they might make something of themselves over time. It won't be easy though and I'm not sure who is paying $100/share for them right now.