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

[MikeAtkinson]

I have to disagree. Tesla's enemies often lie, but this "narrative" seems like either truth or honest confusion.

At Battery Day, Elon said "We're confident that longterm we can design and manufacture a compelling 25 thousand dollar electric vehicle." And since then, each quarterly Shareholder Deck has listed a "Future Product" as "In Development." So it seems reasonable to conclude that Tesla was working on said product.

But at the latest earnings call, Elon said "we're not currently working on the -- on a $25,000 car. We -- you know, at some point, we will, but we have enough on our plate right now...."

If you say "In Development" doesn't mean working on it now, well okay, but Tesla didn't make that clear until now.

Tesla often changes their plans based on new info or thinking. A clear example is their announcing the closing of all stores, then reversing that decision days later. This flexibility in planning is part of Elon's corporate culture of make mistakes without fear and learn from them. This flexibility/agility is very rare in huge corporations, because it rattles people. Mainstream culture considers it weakness, but actually it is a strength, as we can see from Tesla's (and SpaceX's) results: unprecedented pace of innovation and progress.

So when Tesla changes their plans, let's not deny they did, as if such change is a weakness. Let's try to spread the idea that it is strength. Hell yes, Tesla delayed new models, because demand for current models is off the charts. Tesla doesn't need a new $25k model until later than they first thought, if ever.

I don't think Tesla have ever said they are developing a $25k car, what they have said is that they are developing a designed-in-China small car.

 

[2daMoon]

I have to disagree. Tesla's enemies often lie, but this "narrative" seems like either truth or honest confusion.

At Battery Day, Elon said "We're confident that longterm we can design and manufacture a compelling 25 thousand dollar electric vehicle." And since then, each quarterly Shareholder Deck has listed a "Future Product" as "In Development." So it seems reasonable to conclude that Tesla was working on said product.

But at the latest earnings call, Elon said "we're not currently working on the -- on a $25,000 car. We -- you know, at some point, we will, but we have enough on our plate right now...."

If you say "In Development" doesn't mean working on it now, well okay, but Tesla didn't make that clear until now.

Tesla often changes their plans based on new info or thinking. A clear example is their announcing the closing of all stores, then reversing that decision days later. This flexibility in planning is part of Elon's corporate culture of make mistakes without fear and learn from them. This flexibility/agility is very rare in huge corporations, because it rattles people. Mainstream culture considers it weakness, but actually it is a strength, as we can see from Tesla's (and SpaceX's) results: unprecedented pace of innovation and progress.

So when Tesla changes their plans, let's not deny they did, as if such change is a weakness. Let's try to spread the idea that it is strength. Hell yes, Tesla delayed new models, because demand for current models is off the charts. Tesla doesn't need a new $25k model until later than they first thought, if ever.

I prefer to think of it as,

"We have already completed development of that car and have it shelved until the timing is right to produce it. So, for now, we are not currently working on the $25K car."

 

[PeterJA]

I don't think Tesla have ever said they are developing a $25k car, what they have said is that they are developing a designed-in-China small car.

Screenshot from Battery Day:

 

[Bobfitz1]

This does provide further clarity on the decision to delay production of the 25K model.

Any new product always takes time to build the lines, ramp production, organise part supply etc, Maybe extra time optimising the design beforehand can reduce some of the risk.

AFAIK Tesla has already created and staffed a design center in China tasked with designing the smaller and less expensive next model.
I didn't hear anything on call saying they will close this center or retask it. I expect it is a modest cost to keep it working (but not rushing) to complete and refine the Model 2 design. I agree extra time optimizing the design will be helpful and pay off in bringing it to production should delays in Robotaxi bring it back into the product roadmap. But I don't believe there is much risk needing to be reduced.

Cybertruck is a new product. Model 2, if Tesla chooses to produce it will be a follow on product. It will build on Model Y manufacturing improvements,
not require major new ones. I.e. the same model Gigapresses will use new molds to cast front and rear assemblies. A smaller size structural battery pack is not a never before developed pack, it's a smaller version of what 3 and Y use. Also extra time means the economies of scale from ramping M3 and MY help you in meeting cost targets. Especially the continued reductions in 4680 battery costs.

I think that 2 years from now, if Tesla decide they need Model 2 to continue growing at > 50%, they will add new buildings and lines to the now 3 state of the art Giga factories and have M2 ramping faster than many imagine.

 

[dhanson865]

Heated wipers on Mode 3s in China, not sure I need that on my car here in the US but I'm sure others would love it.

https://twitter.com/x/status/1487267277795848192

 

[AudubonB]

…
Yet despite all that (or partly because of it?) the graduating class of 2022 is completely enamored with him. So, before you post another rant about Musk's shortcomings, ask yourself this: How many people in this world want to work for you?

Tell me how many insane people there are in this world and I’ll get you the answer pronto.

 

[82bert]

Heated wipers on Mode 3s in China, not sure I need that on my car here in the US but I'm sure others would love it.

https://twitter.com/x/status/1487267277795848192

I would love this in MN. Frequently the issue is freezing on my wipers, making window cleaning on the drive very difficult.

 

[Prunesquallor]

I have to disagree. Tesla's enemies often lie, but this "narrative" seems like either truth or honest confusion.

At Battery Day, Elon said "We're confident that longterm we can design and manufacture a compelling 25 thousand dollar electric vehicle." And since then, each quarterly Shareholder Deck has listed a "Future Product" as "In Development." So it seems reasonable to conclude that Tesla was working on said product.

But at the latest earnings call, Elon said "we're not currently working on the -- on a $25,000 car. We -- you know, at some point, we will, but we have enough on our plate right now...."

If you say "In Development" doesn't mean working on it now, well okay, but Tesla didn't make that clear until now.

Tesla often changes their plans based on new info or thinking. A clear example is their announcing the closing of all stores, then reversing that decision days later. This flexibility in planning is part of Elon's corporate culture of make mistakes without fear and learn from them. This flexibility/agility is very rare in huge corporations, because it rattles people. Mainstream culture considers it weakness, but actually it is a strength, as we can see from Tesla's (and SpaceX's) results: unprecedented pace of innovation and progress.

So when Tesla changes their plans, let's not deny they did, as if such change is a weakness. Let's try to spread the idea that it is strength. Hell yes, Tesla delayed new models, because demand for current models is off the charts. Tesla doesn't need a new $25k model until later than they first thought, if ever.

I tend to agree. Elon often said in the past that he was unhappy that more people couldn’t afford his cars. Well, evidently more than he thought can. Prime directive says replace as many ICE as possible as soon as possible. Blasting out Y/3 to the max currently seems to be the strategy.

 

[Artful Dodger]

Hell yes, Tesla delayed new models

To be clear, Tesla did not delay new models. Volume production CT has been est'd 2023 for several quarters. There was never a schedule to roll out the $25K compact car, beyond aspirational timelines with years-wide estimates.

This "delay" is entirely a narrative of analysts and the financial media.

 

[Artful Dodger]

AFAIK Tesla has already created and staffed a design center in China tasked with designing the smaller and less expensive next model.

Yeah, I think designing the compact car is 5% of the work assigned to the new China R&D center, with the other 95% going to designing the new production process, work flow, machine tooling and in/out-bound logistics.

They are located right next door to the potential new factory site. That's how Tesla likes to deploy its engineers; hands on.

 

[TheTalkingMule]

Kinda hard to say there's a demand issue since, ya know.....blowout EPS. So now we're on to production growth issues.

Step back a moment and think about how utterly psychotic that is. Elon just grew production 87% entirely within a global pandemic and two massive new Gigafactories are about to open.

 

[woodisgood]

Kinda hard to say there's a demand issue since, ya know.....blowout EPS. So now we're on to production growth issues.

Step back a moment and think about how utterly psychotic that is. Elon just grew production 87% entirely within a global pandemic and two massive new Gigafactories are about to open.

Agree, complete BS narrative being bought hook, line, and sinker by even some bulls because they didn’t stylistically like the call. How anyone would be concerned there won’t be 50% CAGR capacity through 2025 is beyond me.

”We‘s can calculajamate Tesla’s future production capacitance betters than Tesla can.”

Not to mention, those two new gigas about to open….they’re not copies or slightly bigger versions of….they’re improvements on Shanghai.

 

[petit_bateau]

A couple of thoughts on "service & other" (S&O),

First an observation : there appears to be some annual effect going on in the S&O line. The Q1 as a % of auto is higher than other quarters. Given that Q1 is a low-driving-miles quarter you'd expect that Supercharger income to be reduced. So that would mean that service income is up in Q1, which might make sense. Now it is possible that Covid-19 has messed the driving-miles-per-quarter and corresponding charger use, but anyway I throw it out as an observation. If we had other information we could probably intuit something about S&O fixed costs, and relative profitability of sales (presumably always -ve) vs service vs chargers.

Another observation is of course that it has moved into positive GM% territory earlier than my own forecasting had assumed (I like being too pessimistic, if only that was also the case in Energy).

So .... a question for people with industry experience. In a typical legacy auto dealership,
1) How many cars are sold each year,
2) How many cars are maintained each year,

In other words how well is Tesla doing by comparison with a typical legacy outfit ?

Whilst I'm at it, here is how the charger situation is evolving. Personally I would prefer to see the trend reversing as it makes me worry about the qualitative user experience. I'll admit that the charge-rate improvements might be occurring at a faster pace than the deterioration in the connector contention ratio, so that the effective contention ratio is still satisfactory. But until one can see more data that is not discernable (at least by me).

 

[MABMAB]

This was not talked about on earnings call or shareholder letter. This guy says he is spying on Amazon for Elon Musk so that TSLA can copy their practices. Man, imagine optimus suprime fulfilling orders and the market cap expansion (TAM).

 

[capster]

Something I read on twitter made me think:

There are 3 possible reasons for the earnings reaction (in terms of what analysts heard)
- No new models in 2022
- Lingering supply chain issues
- Focus shifting away from EV

Based on all EV stocks selling off in tandem with TSLA I think the biggest reason was the supply chain, since that is the only one that would negatively affect the competition. The other two would actually help the competition.

Ok so if supply chain is the worry… well Apple mentioned on their call today that they see improvement with the supply chain issues already. Apple has a lot of credibility.

Based on all this, it seems like the fear should ease a bit and the buying can start.

On the flip side, the decline in those stocks could just be purely macro.

Thoughts?

Here’s a fourth reason:

- Fleecing retail

It was obvious from the production and delivery numbers that earnings would great. Logic would dictate a big jump in the share price after earnings were out. It’s reasonable to assume that a lot of retail investors went out on a limb with options, buying shares on credit, etc.

However, there is also a fair amount of anxiety in the background* around inflation & rates, Ukraine, etc.

Personally, I thought Elon was fine on the call and found his guidance helpful and reassuring even. Still, it would have been reasonable to assume that he would say something that could be blown out of proportion or could be used to create confusion.

Aren’t those great conditions in which to create and exploit an unexpected reversal?

Further, you have investors here and elsewhere, such as Leo Koguan, who have broadcast their strategy and positions. As the saying goes "the whale that spouts, gets the harpoon."

I do not think this is like the Summer of 2019 when there was at least a little basis to create worry about Tesla’s trajectory. Now, Tesla’s trajectory is going to continue to be amazing and that should be obvious to any intelligent and informed person.

When will the Street will decide to change course? Hard to say, but even a small move from fear towards greed could shift the dynamic. It’s not unreasonable to think anxiety will abate. For example, the West seems now to be pulling itself together to face down Putin which is probably not what he expected.

*

Fear & Greed Index - Investor Sentiment - CNNMoney

Fear & Greed is CNNMoney's investor sentiment tool that comprises of 7 markets indicators.

money.cnn.com

 

[Krugerrand]

Disclosure time.
I had hoped that a blowout 4th quarter and full year numbers would blow the stock up. So I bought some 1/28 calls, which died a horrible death.

Then I thought well ok, but surely they can't be that stupid, so I bought some 2/4 calls which are now on life support.
My portfolio has dropped by multimillion paper dollars in the last several weeks.

My only regret is that I wish I had just bought more stock and stopped my YOLOing (I still blame the mule)

When I started investing in Tesla in 2017 I was so impressed by the product and the car and of course EM I put my entire 401K into the stock.
Yep, I went 100% in on Tesla.

After the recent fall in SP, my only regret is I don't have any dry powder to buy more.

This is the most transformational company I have ever seen and most likely will ever see.
If they just stuck with energy and EV's it would be still the most amazing company.

But because it is led by such a visionary leader Who you know ACTUALLY LEADS (#Marydidn'tlead) I now know this company will be bigger than even I thought possible.

General AI? Tesla BOT? FSD? I did not see any of that in 2017!

If I were EM I would not tweak the President or weigh in on COVID related issues.
But man when one man can get SO MUCH right the things I THINK are wrong ...there just footnotes.

Still 100% in and behind Tesla and EM.

Edit to say THIS is one more reason (as if we need any more) to support The transition from ICE.

Peru oil spill after Tonga eruption bigger than previously thought

The ecological disaster, linked to Tonga's tsunami, is said to be double the size first reported.

www.bbc.com

Proof dogs be dumb. Cat sitting pretty.

 

[Buckminster]

M2 concept (probably smaller and sexier - 4 person):

M1 concept (1 maybe 2 person)

 

[woodisgood]

It just dawned on me (apologies if this is obvious) that the factories Elon talks about scouting this year….probably at least one of those isn’t going to be a vehicle factory.

 

[jerry33]

Tell me how many insane people there are in this world and I’ll get you the answer pronto.

What is the world population. Then subtract one.

 

[Andy O]

I think Elon has misjudged and underestimated something about their humanoid robot. I believe TESLA should be able to begin selling them profitably this year and add a significant income stream from them about that soon.

The challenging part of making a useful robot is solving the general intelligence problem. We see that this problem has largely been solved in developing FSD. The robot only has to be smart enough to work in a warehouse or supermarket, moving goods around, where there is no risk of killing anyone through a road driving error.

How much would such a robot cost if they were manufactured at a small scale? I don't see any expensive component in them. Even at the price of a Model 3 they would earn their cost back through wage-substitution in a year.

(I know I am not the first to make this point but I don't want to go back through the thread to find an earlier post.

Random addenda: Wireless charging might be best for them. Small independent robot-training companies could expand their functionality. Dojo could train them to do the complex task of packing groceries.)