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

[2daMoon]

Regarding the spike up yesterday, Tom Nash offers an angle regarding FedRes regional officers making statements that may have calmed rate hike fears, for now. He explains it well, and offers his take on how long this will last and what the future may bring.

Regarding the recall, I was listening to a small-town radio station and heard the report about the FSD Recall and they went into detail about the issue, then, actually mentioned how it was fixed with an Over The Air update to the cars.

I didn't catch which source they were getting the story from. It was refreshing to hear the whole story being broadcast.

 

[TN Mtn Man]

I know a lot of members have a lot more investment experience and understanding of the markets than I do. I have a question-why is the current discussion of rate hikes having such a large impact now (January, lets ignore the last 3 days)? We've known we have a inflation issue for many months. The FED and treasury secretary have been indicating that rate hikes were coming for months. The market took some bumps last year over them and adjusted. I would have thought that the impact of the rate hikes would already have been price in and accounted for by now. Or is it an expectation of a deeper weakness in the economy?

 

[Singuy]

I know a lot of members have a lot more investment experience and understanding of the markets than I do. I have a question-why is the current discussion of rate hikes having such a large impact now (January, lets ignore the last 3 days)? We've known we have a inflation issue for many months. The FED and treasury secretary have been indicating that rate hikes were coming for months. The market took some bumps last year over them and adjusted. I would have thought that the impact of the rate hikes would already have been price in and accounted for by now. Or is it an expectation of a deeper weakness in the economy?

Seems like "smart money" is being a douchebag swallowing retail's money by generating volatility rotating money around(because they literally can't put it anywhere else). This is what I call reverse Robinhood because retail would either buy options because they are too poor to buy shares, or sell on fear/buy on fomo.

So yeah everything should be priced in, but due to high retail participation I believe smart money is trying to generate profits off the situation. So everything is pretty much fake news.

 

[MC3OZ]

I should have just started a comment, not a reply, since it was more general than your message. In the end, I think we're saying a lot of the same things. The issue with Tesla putting a plant in MI, is that the state has become somewhat "anti-business". It's hardly a coincidence that all the foreign auto companies that have set up assembly operations in this country have avoided the traditional, "rust belt" states.

IMO decisions on where to locate factories will be based mainly on:-

• Availability of a suitable land, location, transport links, cost etc.
• Proximity to markets and shipping logistics.
• Availability of engineering talent and production workers.
• Government incentives, regulation and attitude.

I don't think Tesla particularly wants to tap the talent pool from legacy auto, either engineering or production workers.

I imagine there are plenty of places in the US with good transport links close to major markets, but land can be expensive in some parts of the US.

Tesla will want to build from scratch, on a block of land big enough to accommodate the size of the factory that they prefer to build.

Being located close to a major sea port might be an advantage for shipping logistics.

There are lots of East Coast US states to pick from.

 

[nativewolf]

I question that. Granted-EVs by their nature overall are simpler, with fewer components and systems, and likely take fewer employees to produce. But within that framework, Tesla is, overall, likely to have more direct employees than GM. Tesla is highly integrated and (I believe) builds a higher content of the components used in their cars than other company. GM in turn outsources a large portion of their component manufacturing. They especially outsource a disproportionate part of their component production to foreign manufacturers. This leads to Tesla being the "most American car" with the highest percentage of US made content of any car maker. They don't seem inclined to change that, if anything going the other way and building more in-house.

The takeaway? If GM goes under, those jobs aren't lost. They may be displaced, moved to other parts of the country. But not lost to the US-assuming that it is a US manufacturer that picks up this volume. And if it is Tesla that picks up the volume of cars GM loses, likely there will be more American jobs, not less. Now, if our government chooses to yet again meddle in the free market, to try to pick winners and losers, to punish successful, innovative, progressive companies, and reward slow-moving, entrenched ones that are afraid to take risks, to innovate; they don't help the poorly run companies, who are doomed to failure anyway. All they do is harm the successful ones. And that, in turn, leads to fewer jobs, and a higher number of imported products and damaged US industries.

Well they use 30% fewer parts so it makes sense that there would be fewer jobs. Some jobs is better than no jobs though and Tesla pays well. A factory in Michigan could be helpful politically.

 

[Ogre]

IMO decisions on where to locate factories will be based mainly on:-

• Availability of a suitable land, location, transport links, cost etc.
• Proximity to markets and shipping logistics.
• Availability of engineering talent and production workers.
• Government incentives, regulation and attitude.

I think the Michigan/ Ohio area covers 3 out of 4 of these quite well. The incentives aren’t necessarily there locally, but if it would help swing federal policy it amounts to the same thing.

I’m not entirely sure about engineering talent. I agree, Tesla isn’t likely shopping for ICE engineers.

 

[nativewolf]

IMO decisions on where to locate factories will be based mainly on:-

• Availability of a suitable land, location, transport links, cost etc.
• Proximity to markets and shipping logistics.
• Availability of engineering talent and production workers.
• Government incentives, regulation and attitude.

I don't think Tesla particularly wants to tap the talent pool from legacy auto, either engineering or production workers.

I imagine there are plenty of places in the US with good transport links close to major markets, but land can be expensive in some parts of the US.

Tesla will want to build from scratch, on a block of land big enough to accommodate the size of the factory that they prefer to build.

Being located close to a major sea port might be an advantage for shipping logistics.

There are lots of East Coast US states to pick from.

Berlin has really only 1 of your 4. Land.

Shipping logistics for Berlin is not great, the auto talent is not in Berlin, the govt...haha ha .

Berlin was chosen to stick a knife in the German OEMs. Poland would have been better for many things. Spain for others. The UK for more as well. Berlin was all about politics.

 

[TheTalkingMule]

Tesla will want to build from scratch, on a block of land big enough to accommodate the size of the factory that they prefer to build.

Being located close to a major sea port might be an advantage for shipping logistics.

There are lots of East Coast US states to pick from.

The Philadelphia Energy Solution refinery exploded a few years ago and was then sold to a Chicago developer.

• plenty of land
• on a river
• existing rail connection
• massive cheap labor force
• tons of engineering grads

 

[MC3OZ]

Berlin has really only 1 of your 4. Land.

Shipping logistics for Berlin is not great, the auto talent is not in Berlin, the govt...haha ha .

Berlin was chosen to stick a knife in the German OEMs. Poland would have been better for many things. Spain for others. The UK for more as well. Berlin was all about politics.

While German Engineering talent isn't in Berlin, I think it was a factor in deciding to build in Germany.

Land and local workforce probably considerations for this particular location.

Government regulation far from ideal and maybe worse than they expected.

Long term I think Berlin will turn out great,

 

[nativewolf]

While German Engineering talent isn't in Berlin, I think it was a factor in deciding to build in Germany.

Land and local workforce probably considerations for this particular location.

Government regulation far from ideal and maybe worse than they expected.

Long term I think Berlin will turn out great,

I agree that it will turn out great. Govt regulation so far much much better than I expected. If they expected less they were fools and EM is no fool.

Just that it was brilliant strategically due to politics. Really for no other reason. Just 1.

 

[Congo Line]

The Philadelphia Energy Solution refinery exploded a few years ago and was then sold to a Chicago developer.

• plenty of land
• on a river
• existing rail connection
• massive cheap labor force
• tons of engineering grads

I think Elon is only going to consider 'right to work' states - i.e. union-free

 

[CorneliusXX]

While German Engineering talent isn't in Berlin, I think it was a factor in deciding to build in Germany.

Land and local workforce probably considerations for this particular location.

Government regulation far from ideal and maybe worse than they expected.

Long term I think Berlin will turn out great,

Elon mentioned that Austin was chosen primarily because that was one of the few places top engineering talent would move to from California. It's likely Berlin played into a similar thought process for the European factory. Berlin might not have the engineering talent, but it would be considered a positive for engineers who want to move for a Tesla job. Berlin is a true global city - It's unlikely as many top engineers would be willing to move to 2nd/3rd tier cities being discussed here.

Secondary factors were mentioned as regulations/location/logistics.

Source below:
Elon Musk explains why Tesla chose Austin for the Gigafactory and makes more Cybertruck revelations - Tesla Oracle

While the cities of Austin, Houston, and Tulsa, Oklahoma were actively vying to get Elon Musk’s attention to get the Tesla Gigafactory built at their desired location, the research of the HR team at Tesla explored that most of the tech and engineering talent at the Silicon Valley-based automaker was willing to move to Austin only — this became the first and most important reason to choose Austin.

The best engineering talent is not only required to produce the most advanced cars in the world at Tesla but according to Elon Musk, each Gigafactory is a product itself, each new factory must be better than the previous one.

In the same fashion, Giga Shanghai is technologically more advanced than Giga Nevada and now the Gigafactory Berlin is going to be the most advanced of all the existing Tesla Gifgafactories — for example, Giga Berlin will have the world’s most advanced paint shop, says Elon Musk.

 

[Chunky Jr.]

Another example of GM leading...

https://twitter.com/x/status/1488728841086398465

 

[Cattledog]

"Disables rolling stop functionality in all FSD profiles."

So... recall is over? Just like that?

I'm sure that will be in all the headlines tomorrow.

/s.

From Total Recall to Recall Totaled in 24 hours. The other car companies must be shaking their heads. It's like watching Secretariat in the Belmont. TSLA, juggernaut.

 

[insaneoctane]

# of employees:

Amazon: ~1,300,000
Microsoft: ~181,000
Apple: ~154,000
Google: ~135,000
Tesla: ~71,000
Facebook: ~60,000
Netflix: ~9,400

Seems like Amazon is a candidate for some serious bot orders...

 

[Prunesquallor]

Looks like Starlink is upping the game.

 

[TN Mtn Man]

I think the Michigan/ Ohio area covers 3 out of 4 of these quite well. The incentives aren’t necessarily there locally, but if it would help swing federal policy it amounts to the same thing.

I’m not entirely sure about engineering talent. I agree, Tesla isn’t likely shopping for ICE engineers.

Regarding engineering talent-I'm not sure where Tesla is now doing it's primary product engineering and development. Has that moved from CA to TX? In either case, at the production facilities, they likely have little need for engine(motor) and drivetrain engineers. They will need manufacturing, process, industrial, controls and tooling engineers to bring an assembly to life and support production activities. Those would be readily available in the MI/OH area, and I suspect those at legacy companies would jump at a chance to work at Tesla. Thing is, Michigan and N. Ohio face a few concerns. One is the "brain drain" from the rust belt to the SE and TX, areas that are becoming manufacturing meccas. They also face weather concerns-long, cold winters drive heating costs, snowplowing costs of employee parking lots, degradation of facilities, as well as challenges with transportation and the ability of employees to get to work (I grew up not far from Buffalo and remember it all too well). The other issue involved transportation-Ohio in particular embraces toll roads. I don't recall them in MI though. If you are going to transport by truck, anything built in MI will require a toll road out in OH or IL. In the overall scheme of things, I'm not sure how big an impact those things are.

From a transportation standpoint, MI isn't well suited. It's not centrally located, bounded by water at least in part on 3 sides, and a foreign nation. To serve the populous east-coast markets, it would make more sense to locate in the mid-Atlantic states, or perhaps southern OH. Many of those states are more business friendly and lower tax as well.

Flip side, as far as geography and access to markets, Austin certainly isn't exactly centrally located, nor anywhere close to larger Eastern markets. Yes, TX is the 2nd most populous state in the nation, but it's still very spread out and doesn't have the population of the entire Eastern seaboard area. So perhaps that's not that big an issue.

 

[UnknownSoldier]

The best thing about this recall is that I know my car will definitely get this 10.10 update and fast.

As someone who is still stuck on 10.8.1, yes please.

 

[TN Mtn Man]

Another example of GM leading...

https://twitter.com/x/status/1488728841086398465

Wow, that's dramatic. Less than 3M total sales, and Tesla is expected to hit 1.6M or so this year. I can't imagine it will take TSLA more than 2 more years to match GM total vehicle sales.

 

[capster]

I wonder what the different "road rules" he is referring to are. Maybe because we aren't allowed to drive while holding a loaded firearm in one hand?

Yes, I believe you are correct. Aren’t you required to keep both hands on a loaded firearm while driving there?