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

[WattsHappening]

I haven't paid attention to the price increases since we took delivery of our Model Y last fall. But I just compared this morning. Same config of our Model Y that we ordered in July of last year is now $63,990, exactly $10K higher. Wow. That is some serious pricing power.

 

[kbM3]

1. that ratio is ignoring the pack, that is 4680 in the abstract vs 2170 in the abstract. wasted space in a pack could hurt one side or the other more depending on specific pack designs.

2. 20% more power isn't an insane 3x charging speed increase. If someone had started this conversation about 20% faster charging I would have yawned and not replied.

i meant a pack of equivalent energy capacity could take 20% more power because of the implied 1.2X power density improvement in 4680, but I can see how my statement of same size pack led you to think I meant equivalent volume. Sorry I was not more clear.

 

[StarFoxisDown!]

I haven't paid attention to the price increases since we took delivery of our Model Y last fall. But I just compared this morning. Same config of our Model Y that we ordered in July of last year is now $63,990, exactly $10K higher. Wow. That is some serious pricing power.

Definitely means the stock should go down another 5%

 

[AudubonB]

Good "hyperinflationary" answers, all!

When I lived in Brazil, the story was that one always should take a taxi, because the cheap fare you used to board the bus was worth more than the many times nominally larger fare you used to pay the taxi driver at the end of the same journey.

 

[M|S|M MYP]

Definitely means the stock should go down another 5%

Minimum...im guessing more like 10%+

 

[SOULPEDL]

If prices go up 5% on 30% unit Margin, the Margin is now 35% (assuming no inflation). I bet they are front running inflation while sales are on fire which could further improve margins short term. I believe Tesla locked in on prices a bit longer term.

 

[advocate8]

What’s going on in the after hours? Looks like we’re up 1.35% $777.77 AT

i meant a pack of equivalent energy capacity could take 20% more power because of the implied 1.2X power density improvement in 4680, but I can see how my statement of same size pack led you to think I meant equivalent volume. Sorry I was not more clear.

What happens if the more powerful/longer range MYLR’s and P’s long expected here and on the internet hype machine out of Austin..... turn out to be just that new 280-range MY dual-motor?
There is mounting evidence that 280-range model tested by the EPA IS the structural pack Austin car for the foreseeable future, and no other has been submitted to EPA for certification... the later submission people have assumed was a longer range car was apparently a RE-submission of the 280 car due to some minor change needed in the paperwork.
That would support some of the stories that the 4680 isn’t quite as ready to go as we’ve all assumed.

 

[StarFoxisDown!]

If prices go up 5% on 30% unit Margin, the Margin is now 35% (assuming no inflation). I bet they are front running inflation while sales are on fire which could further improve margins short term. I believe Tesla locked in on prices a bit longer term.

Common misconception I'm seeing all over the place with these price hikes. The price hikes are all about Tesla guessing where costs are going to be 6-8 months from now because that's the dynamic Tesla has to factor for since their order backlog stretches all the way to the end of the year. They know a price hike today won't actually work its way through to their earnings for a long time.

Thus they're predicting certain dynamics. If commodity prices and inflation temper off in the 2nd half of the year but Tesla's demand stays strong, the effects of the price hikes on margins would be very big.

What happens if the more powerful/longer range MYLR’s and P’s long expected here and on the internet hype machine out of Austin..... turn out to be just that new 280-range MY dual-motor?
There is mounting evidence that 280-range model tested by the EPA IS the structural pack Austin car for the foreseeable future, and no other has been submitted to EPA for certification... the later submission people have assumed was a longer range car was apparently a RE-submission of the 280 car due to some minor change needed in the paperwork.
That would support some of the stories that the 4680 isn’t quite as ready to go as we’ve all assumed.

I don't think you understand the purpose of 4680's and what's best for Tesla's finances in the process of ramping a factory. Tesla has always been clear that the overall purpose of 4680's is to increase production output overall.

So no......the 4680's "isn't quite ready to go". It's obnoxious that people claim Tesla is behind on 4680 development and ignore the entire purpose of the cells. Equally as obnoxious that anyone tries to claim Tesla is ahead or behind like anyone knows the internal roadmap goals that have been in place for months now

 

[advocate8]

Common misconception I'm seeing all over the place with these price hikes. The price hikes are all about Tesla guessing where costs are going to be 6-8 months from now because that's the dynamic Tesla has to factor for since their order backlog stretches all the way to the end of the year. They know a price hike today won't actually work its way through to their earnings for a long time.

Thus they're predicting certain dynamics. If commodity prices and inflation temper off in the 2nd half of the year but Tesla's demand stays strong, the effects of the price hikes on margins would be very big.

I don't think you understand the purpose of 4680's and what's best for Tesla's finances in the process of ramping a factory. Tesla has always been clear that the overall purpose of 4680's is to increase production output overall.

So no......the 4680's "isn't quite ready to go". It's obnoxious that people claim Tesla is behind on 4680 development and ignore the entire purpose of the cells. Equally as obnoxious that anyone tries to claim Tesla is ahead or behind like anyone knows the internal roadmap goals that have been in place for months now

I do fully understand the purpose of the 4680 was to lower costs, improve ease of manufacture, control supply chain better and generally improve the cars. Do you understand how the hype machine that has been touting it as something else will react?

 

[StarFoxisDown!]

I do fully understand the purpose of the 4680 was to lower costs, improve ease of manufacture, control supply chain better and generally improve the cars. Do you understand how the hype machine that has been touting it as something else will react?

As an investor, I don't care what a bunch of Twitter accounts hype themselves up about. I care about what's best business-wise and financially for Tesla. At the end of the day, earnings and growth are what's going to provide support for the stock and move it higher. Not what a bunch of twitter accounts say or think.

 

[DFibRL8R]

According to this Forbes article, Tesla insurance has filed to start selling insurance in Virginia and Oregon, and will be first time the policies will be underwritten by Tesla General Insurance as opposed to partner companies in other states.

Tesla Prepares To Start Selling Auto Insurance In Florida

Tesla, led by high-profile billionaire Elon Musk, not only wants to manufacture your electric vehicle but it also wants to sell you the insurance for it. Austin, Texas-based Tesla is offering auto insurance in Arizona, California, Colorado, Illinois, Maryland, Nevada, Ohio, Oregon, Texas, Utah an

www.forbes.com

 

[jbcarioca]

You have no idea what the term hyperinflation means, when you write like that. In hyperinflationary times, it is cheaper to take a taxi than it is a street bus. 99 TeslaPoints for the first to explain why, but @jbcarioca cannot play.

Aw, that's not fair. I wanna play too! Anyway bonus points awarded for person who can name the last five Brazilian currencies in order?
In hyper inflationary times, a $500,000 equivalent fixed rate 30 year mortgage could be paid off in full for US$ equivalent 5.50.
In hyper inflationary times a wheelbarrow full of banknotes was used to buy a single breakfast.
In hyper inflationary times several countries ahem eliminated their own currency entirely and adopted a Currency Board instead or just used a foreign currency.
Yje US has never even hinted at hyperinflation. The Confederate States of America did.

 

[StealthP3D]

Common misconception I'm seeing all over the place with these price hikes. The price hikes are all about Tesla guessing where costs are going to be 6-8 months from now because that's the dynamic Tesla has to factor for since their order backlog stretches all the way to the end of the year. They know a price hike today won't actually work its way through to their earnings for a long time.

Thus they're predicting certain dynamics. If commodity prices and inflation temper off in the 2nd half of the year but Tesla's demand stays strong, the effects of the price hikes on margins would be very big.

Capitalism says you should price your products to maximize total profit, when all is said and done. When a company is not production constrained, as is the usual case, pricing is a fine balance of volume and profit margins. Typically, higher volumes reduces your cost to produce so small errors in the projected demand at different price points can have large impacts on profitability. In the auto industry, manufacturers typically make these projections and price the car to hit the sweet spot of profitability. If they over-estimate demand at a certain price point they discount the cars at the end of the year so they can avoid making fewer cars than anticipated because that would hurt profits more than selling the final cars at a steep discount.

Tesla is in a totally different situation. They know the sweet spot of profitability is at volumes they know are too large to manufacture. Lowering the price does not increase sales by even one car. That changes the pricing strategy to charging as much as they can with a good safety margin for ensuring they do not run out of buyers for their ever increasing production.

In other words, now that Tesla has strong positive margins and doesn't have to worry about running out of money if they sell them for less than the cost to produce, pricing has nothing to do with how much the product costs to manufacture because pricing them lower is not going to speed the mission as long as they continue to sell as many as they can make. The price is 100% determined by anticipated demand for their growing production numbers without regard for materials costs.

The current price increases have nothing to do with higher costs except for the desire of Tesla to avoid the appearance of profiteering from unprecedented demand by justifying the price increases with higher material costs. Tesla can use the rising costs of materials to ward off the narrative that Tesla is a greedy, price-gouging company. In other words, Tesla could have frozen the prices and still been profitable even with higher material costs. They don't do that because they don't have to. They will still sell everyone they can make at higher prices. That said, the price increases must be conservative enough that they don't run out of demand if the economy falters. Since no one can predict the future, the prices will fluctuate up and down to balance supply and demand as the economy (and therefore latent demand) fluctuates.

None of this has anything to do with material cost increases.

 

[jbcarioca]

Good "hyperinflationary" answers, all!

When I lived in Brazil, the story was that one always should take a taxi, because the cheap fare you used to board the bus was worth more than the many times nominally larger fare you used to pay the taxi driver at the end of the same journey.

Sure but the taxi was a VW Beetle. More space on the bus, especially the White Rabbit, air conditioned too.

 

[Curt Renz]

Good "hyperinflationary" answers, all!

When I lived in Brazil, the story was that one always should take a taxi, because the cheap fare you used to board the bus was worth more than the many times nominally larger fare you used to pay the taxi driver at the end of the same journey.

1923 German 20-million mark currency note:

 

[15Peter20]

Capitalism says you should price your products to maximize total profit when all is said and done. When a company is not production constrained, as is the usual case, pricing is a fine balance of volume and profit margins. Typically, higher volumes reduces your cost to produce so small errors in the projected demand at different price points can have large impacts on profitability. In the auto industry, manufacturers typically make these projections and price the car to hit the sweet spot of profitability. If they over-estimate demand at a certain price point they discount the cars at the end of the year so they can avoid making fewer cars than anticipated because that would hurt profits more than selling the final cars at a steep discount.

Tesla is in a totally different situation. They know the sweet spot of profitability is at volumes they know are too large to manufacture. Lowering the price does not increase sales by even one car. That changes the pricing strategy to charging as much as they can with a good safety margin for ensuring they do not run out of buyers for their ever increasing production.

In other words, now that Tesla has strong positive margins and doesn't have to worry about running out of money if they sell them for less than the cost to produce, pricing has nothing to do with how much the product costs to manufacture because pricing them lower is not going to speed the mission as long as they continue to sell as many as they can make. The price is 100% determined by anticipated demand for their growing production numbers without regard for materials costs.

The current price increases have nothing to do with higher costs except for the desire of Tesla to avoid the appearance of profiteering from unprecedented demand by justifying the price increases with higher material costs. Tesla can use the rising costs of materials to ward off the narrative that Tesla is a greedy, price-gouging company. In other words, Tesla could have frozen the prices and still been profitable even with higher material costs. They don't do that because they don't have to. They will still sell everyone they can make at higher prices. That said, the price increases must be conservative enough that they don't run out of demand if the economy falters. Since no one can predict the future, the prices will fluctuate up and down to balance supply and demand as the economy (and therefore latent demand) fluctuates.

None of this has anything to do with material cost increases.

So Elon’s “inflation “ tweet was a) completely true but also b) a nifty bit of deflection.

 

[navguy12]

T3SLA SO COOL (image of the day)

View attachment 781225

LA WRAP... nice reminder of how EVs are critical to fight climate change.

Cheers!

Looks like his right front wheel rim has seen a little curb rash over the years…

 

[Singuy]

Very good deep dive on why a reversal is coming.

Wage spiral was not the case in Feb
Core CPI came in at 0.5%
Core PPI today came in at only 0.2%(vs 0.6% expected)

 

[elasalle]

Very good deep dive on why a reversal is coming.

Wage spiral was not the case in Feb
Core CPI came in at 0.5%
Core PPI today came in at only 0.2%(vs 0.6% expected)

Is this the u tube guy who sold like $20M and is back in the market ?
some1 like him but with pink ..green hair ...?

 

[15Peter20]

Very good deep dive on why a reversal is coming.

Wage spiral was not the case in Feb
Core CPI came in at 0.5%
Core PPI today came in at only 0.2%(vs 0.6% expected)

Does anyone know why I see ads for Tesla accessories, rather than whatever it is you’re trying to link?

Edit: the link works fine when I quote you, just not when viewed in the OP.