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

[Singuy]

How can you tell?

I can tell you all a whole lot about Rivian, but my previous posts got nuked (not mad about it). If there’s a more appropriate thread, I can post there. Don’t know what it is because I’m an ignorant moron.

They blamed supply chain issues on not able to meet production goal. I can tell because it came from the horses mouth.

 

[Tommy O]

They blamed supply chain issues on not able to meet production goal. I can tell because it came from the horses mouth

Wow, okay. Was that in official guidance from the company? If so…not good. But jibes with what I know in general about their operations.

 

[ggr]

How can you tell?

I can tell you all a whole lot about Rivian, but my previous posts got nuked (not mad about it). If there’s a more appropriate thread, I can post there. Don’t know what it is because I’m an ignorant moron.

Apparently. All discussion of Rivian Automotive

 

[Singuy]

Wow, okay. Was that in official guidance from the company? If so…not good. But jibes with what I know in general about their operations.

Rivian R1T Production Is Threatened by Supply Chain Issues

The 2022 Rivian R1T faces trouble as production slows. the Rivian R1T may fall short by hundreds of orders as production attempts to increase.

www.motorbiscuit.com

"Scaringe continued to explain that supply chain restraints continue to be a challenge. Rivian suppliers have been scaling up their production in an attempt to match Rivian’s ramp-up rate."

Bloomberg - Are you a robot?

www.bloomberg.com

These companies are having supply chain issues when their goal is to make around 1k cars by year end 2021. Lucid guided for 700+ cars by end of 2021 and yet we have heard nothing about achieving this goal. Rivian we know failed to meet their goal.

 

[Blue horseshoe]

Wouldn’t worry about this at all. Tesla is expediting parts by air. The shipping situation and clogged ports is a complex situation, for sure, but it’s not new.

If Petersen is saying something new about supply chain disruption, can you tell us what it specifically is? Not going to watch the podcast.

Things at my work seem about the same or better than they were a couple months ago, and we order a ton of stuff just to keep things going.

Peterson brought up an issue with supply backlogs that I don't think everyone is aware of (at least not me.) The example he mentions is a company may have been used to shipping times of say 60 days, but with shipping times being pushed back they could be faced with 6-12 month shipping delays.

The issue is that the company now has to forecast how much they need to order and as we all know the further out you forecast the worse your estimate is. What could happen is the company over estimates how much they need to ship which further clogs the shipping pipeline, but more importantly if demand isn't as high and/or the order is too great then the company is now facing oversupply.

Another issue he brings up is that the shipping infrastructure just cannot quickly adapt to a spike in demand like we've seen since covid. They can't suddenly have cargo ships appear and the dynamics of union labor also don't allow for available labor personnel to suddenly appear.

To bring it back to Tesla they've addressed this in the last earnings call and stated supply constraints will continue to be a limiting factor this year, but they believe it will ease as we end the year going into q1 of 2023. Elon and the rest of the team did not seem too concerned and it should help calm your nerves that they still reiterated 50%+ growth this year. Apples earnings call, from what I've gathered, reiterates this belief that supply constraints are an issue, but they see it easing over time.

Tl;dr: supply constraints are transitory and Tesla will do just fine this year and every year from here on out.

 

[Tommy O]

"Scaringe continued to explain that supply chain restraints continue to be a challenge. Rivian suppliers have been scaling up their production in an attempt to match Rivian’s ramp-up rate."

Bloomberg - Are you a robot?

These companies are having supply chain issues when their goal is to make around 1k cars by year end 2021. Lucid guided for 700+ cars by end of 2021 and yet we have heard nothing about achieving this goal. Rivian we know failed to meet their goal.

Thanks. @ggr pointed me to the appropriate thread. Love Rivian as a company, hope they succeed.

 

[Accident]

FYI: BMW has this feature some years ago, perhaps even a decade ago.

It was a hot item in BMW marketing . . . that quietly disappeared after a few years.

The reviews from professionals were not great, and while it looked like a good idea on paper, in the real world it wasn't a good driving experience. On the contrary, IIRC, the greatest issue was any changes in the car's speed while in a curve. Doing so would end up changing the steering angle, this while the steering wheel remained fixed in the driver's hands. It did not instill confidence or pleasure and BMW dropped the option a few years later; it did not return.

Perhaps someone on this thread may have owned a BMW with this feature?

New BMWs still come with active steering including their new BEVs. It quickens the steering only during parking or at low speed. It won’t make changes when the wheel is at a fixed position.

I know that even some VW and Lexus implemented similar systems. Mercedes Benz has a cool system that changes the steering ratio based on the turning angle.

One thing that they all have in common is that they all use mechanical systems like multiple planetary gear systems. Infiniti is the only manufacturer that had a steer by wire system. I never tried it, but it wasn’t well received. The feedback was supposed to be lacking, had dead spots, and even some lag. I really don’t think I would like a performance car with steer by wire. Even if lag and dead spots are non-existent, it would be impossible to replicate all the feedback from the road and tires.

 

[samppa]

I think that anyone who hasn't driven for a day with the yoke doesn't deserve to have an opinion. Just like the people who wanted creep mode, or braking only on the brake pedal. And we have two newly installed roundabouts of optimally bad size on the road out of our home, yoke is just fine.

Mod: good idea. --ggr

Agreed.
I installed a yoke on my model Y, and it's just amazing.

 

[Maarten]

Hint: before you hit "Send" ask yourself "Do I feel lucky today?"

I feel so lucky today!
With TSLA above USD 800 no financial troubles for me.
But also a bit frustrated.
I cannot find a "Send"- button.

 

[TSLA Pilot]

And we all know that BMW is better than Tesla at software.

/S

Just FYI: BMW's variable steering system was augmented with software, but purely mechanical in operation, IIRC, using some clever engineering. For all their faults, they DO know something about driving over there at BMW . . . it wasn't all just marketing after all.

Details below (and I was off by a full decade--we're talking 2003 for BMW Active Steer). BTW, this tech has far more history among other brands than I was aware of. It makes we wonder if Tesla might pursue this a bit more with the Model S and X, and what the IP limitations were that precluded installing variable steering tech in these two flagship models at the same time as the yoke:

AutoZine Technical School

AutoZine Technical School

www.autozine.org

And:

"Worse were the mechanical changes. This was the 5 Series that brought you Active Front Steering, a confusing and feel-robbing setup. At least it was an option."

Source:

Driving every generation of the BMW 5 Series

www.topgear.com

My point: the yoke in its current iteration may be suboptimal, BUT if it eventually incorporates some better tech, perhaps it will boost MS and MX sales to new heights, and these are the highest margin products sold at Tesla, most likely.*

*Didn't Elon let it slip that the new MS actually costs LESS to manufacture than the old MS? I can't remember when or where he said this; does anyone have a source?

 

[Atomsla]

*Didn't Elon let it slip that the new MS actually costs LESS to manufacture than the old MS? I can't remember when or where he said this; does anyone have a source?

Elon quote from Q1 2021 Earnings call: "So it's just a matter of time and then we'll be doing well over 2,000 S/X per week. It's a great car. It actually costs us less to produce, a little bit less to produce, but it is a superior product. So in conclusion is there's a lot to be excited about in 2021 and '22."

 

[Runarbt]

Elon quote from Q1 2021 Earnings call: "So it's just a matter of time and then we'll be doing well over 2,000 S/X per week. It's a great car. It actually costs us less to produce, a little bit less to produce, but it is a superior product. So in conclusion is there's a lot to be excited about in 2021 and '22."

Just watch Sandys ongoing tear-down of the Plaid. They have made a lot of very smart design changes - it is smooth.. !

 

[jerry33]

Is this really a "thing," with actual, ahem, DATA and STATS, or is this just conjecture?

The TSLA investor's angle is that the yoke may have implications for future sales of Tesla's highest margin vehicles, the MS and the MX.

I'm not trying to be a pill here, but it seems like there are a remarkably large number of "yoke" MS's on the used car market, to include Tesla's own used cars. As an owner of two new "yoke" MS's, but with very limited miles on them so far, let us just say the jury is still out on Elon's answer to a question absolutely NO ONE was asking . . . .

Thanks for any safety data or experiences you might be able to provide re: broken bones from airbag deployments.

It's enough of a "thing" that they now teach keeping your hands down in driver's ed. Also check out Sandy Munro's Plaid videos.

 

[Dangerous Fish]

BMW patents their own take on the yoke...

BMW patents reveal yoke steering wheel for self-driving models | Auto Express

Patents indicate that BMW is creating a radical yoke-style ‘steering handle’, which folds away when not in use, for its future autonomous cars

www.autoexpress.co.uk

 

[Todesbuckler]

Annual report (10-K) is online:

https://www.sec.gov/Archives/edgar/data/1318605/000095017022000796/tsla-20211231.htm

 

[TheTalkingMule]

First 10k related news I noticed was Reuters pointing out Tesla's Bitcoin whent from $1.5B to $2B as of December.

 

[Todesbuckler]

First 10k related news I noticed was Reuters pointing out Tesla's Bitcoin whent from $1.5B to $2B as of December.

In the balance sheet Tesla lists digital assets (lower of purchasing price or lowest price reached after the purchase as explained by @The Accountant ).
The value of this balance sheet position at the year-end 2021 was 1,260 and the value of at the end of Q3 was also 1,260. Hence, Tesla did not buy any new bitcoin in Q4 (and there was also no impairment).

Reuters probably took this information from the 10-K:
"In the first quarter of 2021, we invested an aggregate $1.50 billion in bitcoin. The fair market value of our bitcoin holdings as of December 31, 2021 was $1.99 billion"

-> It is just voluntary reporting about the market price at the end of the year.

 

[mongo]

Annual report (10-K) is online:

https://www.sec.gov/Archives/edgar/data/1318605/000095017022000796/tsla-20211231.htm

Ceo plan statuses:
2012: (Indicates to me that Q3 and Q4 count, but Q1 and/ or Q2 gross margin are expected to be lower than 30%)

As of December 31, 2021, the performance milestone of gross margin of 30% or more for four consecutive quarters was considered not probable of achievement for which the unrecognized stock-based compensation is immaterial.

2018: (Nearly a billion dollar GAAP hit last year, only 65 million left which will hit early 2022)

As of December 31, 2021, we had $65 million of total unrecognized stock-based compensation expense remaining, which will be recognized over a weighted-average period of 0.6 years. For the years ended December 31, 2021, 2020 and 2019, we recorded stock-based compensation expense of $910 million, $838 million and $296 million, respectively, related to the 2018 CEO Performance Award.

Expectations of performance : (double revenue, 40% EBITDA gain)

 

[mongo]

Deferred tax situation.
Pages 86-88
Key points:
Lots of overhanging deductions, including $23MMM for the 2012 CEO plan exercise. Laws changed, so the 2018 plan will not have this impact.

As of December 31, 2021, we had $31.2 billion of federal and $21.6 billion of state net operating loss carry-forwards available to offset future taxable income, some of which, if not utilized, will begin to expire in 2022 for federal and state purposes. A portion of these losses were generated by SolarCity and some of the companies we acquired, and therefore are subject to change of control provisions, which limit the amount of acquired tax attributes that can be utilized in a given tax year. We do not expect the change of control limitations to significantly impact our ability to utilize these attributes.

Our 2021 net operating loss included corporate income tax deductions related to our CEO’s exercise of the remaining stock options from the 2012 CEO Performance Award, which resulted in a $23.45 billion tax deduction. Such increase in net operating loss is included in our deferred income tax assets, offset by a valuation allowance. Section 162(m) of the Internal Revenue Code was amended for deductibility of executive compensation for stock grants after 2017. Therefore, we are not expecting substantial corporate income tax deductions from our CEO's subsequent option exercises.

As of December 31, 2021, we had research and development tax credits of $738 million and $584 million for federal and state income tax purposes, respectively. If not utilized, the federal research and development tax credits will expire in various amounts beginning in 2024. However, the state of California research and development tax credits can be carried forward indefinitely. In addition, we have other general business tax credits of $186 million for federal income tax purposes, which will not begin to significantly expire until 2033.

Resulting in no federal taxes to offset at this point

So they are tracking it for now:

As of December 31, 2021, we recorded a valuation allowance of $9.07 billion for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred taxes increased by $6.14 billion, $974 million, and $150 million during the years ended December 31, 2021, 2020 and 2019, respectively. The changes in valuation allowance are primarily due to additional U.S. deferred tax assets and liabilities incurred in the respective year. We have $417 million of deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-not to be fully realized given the expectation of future earnings in these jurisdictions. We did not have any material releases of valuation allowance for the years ended December 31, 2021, 2020 and 2019. We continue to monitor the realizability of the U.S. deferred tax assets taking into account multiple factors. In completing this assessment, we considered both objective and subjective factors. These factors included, but were not limited to, a history of losses in prior years, excess tax benefits related to stock-based compensation, future reversal of existing temporary differences and tax planning strategies. After evaluating all available evidence, we intend to continue maintaining a full valuation allowance on our U.S. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Given the improvement in our operating results and depending on the amount of stock-based compensation tax deductions available in the future, we may release the valuation allowance associated with the U.S. deferred tax assets in the next few years. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

 

[jeewee3000]

I lost it at this part of the 10-K:

We are highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer.

We are highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer. Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla. Mr. Musk also currently serves as Chief Executive Officer and Chief Technical Officer of Space Exploration Technologies Corp., a developer and manufacturer of space launch vehicles, and is involved in other emerging technology ventures.

The title of Technoking makes this risk assessment read like a joke.