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

[Artful Dodger]

That is 2021, before inflation. Elon’s tweet is about seeing inflation today. COGS will go up with inflation and as long as Tesla honors the old car prices, as a result, margins will have to go down.

Tesla has long-term supply contracts for most raw materials, so their COGS will go up with contract renewals, but not in the near term. We can be highly confident that Telsa's raw materials costs are covered by contracts at least out to the point in time when these retail price increases show up in revenue.

For example, the large contract for Panasonic 2170 cells from Giga Nevada is under a 3 year agreement signed last Spring.

Tesla even has a $400M logistics contract for 2022 for shipping finished cars from Giga Shanghai. That was a good business move on Tesla's part. Obviously, if high prices persist then costs of logistics will go up, but NOT faster than Tesla's planned price increases.

TL;dr increasing COGS is not likely to lower Tesla's margins, because PLANNING.

 

[nativewolf]

Let's just say that to get a driving license in Germany is a little more complex than simply showing up at the DMV and not effing up the multiple choice test....

Spoiler: The ugly

• get a vision test
• complete first-aid course
• complete compulsory hours of professional instruction
• complete compulsory hours of theoretical instruction
• pass multiple-choice exam
• pass driving test
• cost between $1600 - $3000 all-in

A license? Just to drive? Huh..they should try that is Massachusetts maybe it would help.

 

[UncaNed]

There is quite a lot of evidence that the Russians have been targetting Western satellite communications, hence the need for delivering Starlink to the Ukraine (fantastic to see happening)

Viasat outage was ‘Russian electronic warfare’ says satellite industry

Satellite industry sources are suggesting that Viasat’s problems across Europe are the result of electronic warfare by Russia.

www.capacitymedia.com

and of course lots of landside activity from both sides

Viasat, Rosneft hit by cyberattacks

One shows signs of a state-sponsored intrusion, the other potentially not

www.theregister.com

The Windows malware on Ukraine CERT's radar right now

Government agencies impersonated, fake antivirus, another wiper, backdoors

www.theregister.com

So this is why my internet (necessary to access my brokerage account and this TMC forum) has had some odd pauses and hiccups lately here on the US East coast? I was wondering what was going on these last two days or so...

 

[nativewolf]

Tesla has long-term supply contracts for most raw materials, so their COGS will go up with contract renewals, but not in the near term. We can be highly confident that Telsa's raw materials costs are covered by contracts at least out to the point in time when these retail price increases show up in revenue.

For example, the large contract for Panasonic 2170 cells from Giga Nevada is under a 3 year agreement signed last Spring.

Tesla even has a $400M logistics contract for 2022 for shipping finished cars from Giga Shanghai. That was a good business move on Tesla's part. Obviously, if high prices persist then costs of logistics will go up, but NOT faster than Tesla's planned price increases.

TL;dr increasing COGS is not likely to lower Tesla's margins, because PLANNING.

Doesn't mean contracts are fixed price. Often supply contracts have outs or allow price increases in case markets dramatically change. For Tesla the majority of the contracts are to ensure access to production without subjecting one to the vagaries of spot market price and availability. I have no idea how Teslas contracts are written. Just cautionary note.

 

[petit_bateau]

~3 years ago:

fleet & miles driven since then must be bonkers

 

[Krugerrand]

My take on the price increases...

• Material costs are up some
• Demand is through the roof with wait times approaching one year
• Putin helped increase demand, increasing wait times further
• All other cars have increased prices (dealers saw to this)
• Further increases in margin (no way raw materials have increased close to current Tesla hikes)
• Should slow down backlog acceleration (bad for customers to have to wait 12+ months)
• As long as Tesla is making EVs as fast as they can and has a healthy line of customers wanting to buy them, increasing prices only helps Tesla's financials without compromising the mission

Ironically, I chose NOT to order my MY a year ago because buying my M3 taught me that Tesla just lowers prices after the initial novelty wears off a newly introduced model. I witnessed several price reductions after I bought my M3. So, having learned that lesson in 2018/2019, I let the MY marinade. Well, the opposite happened with the MY. So I played this exactly wrong...I bought my M3 early, at the peak and now have watched the MY increase $14K month by month before my very eyes. Each time I finish licking my wounds from the last increase and start to reconsider, they do it again! So, I will now wait to see if Berlin and Austin can help burn down the backlog and possibly get the pricing back down...if not, even as a Tesla investor and fan boy, I feel the MY is significantly over priced for my personal expectations.

How many times have people come here to say, I wish I’d bought the car instead of waiting? For more reasons than just the cost of it. You got greedy.

Prices will come back down at some point, but it might take a couple of years. But then I wonder if even a couple of years will be long enough when I imagine what everything looks like then with FSD and OEMs in serious trouble and more new factories announced -

Maybe you got to buy used now to get the price break to meet your personal expectations? Not today, but in a couple years when those prices adjust. Of course, I’m not even sure used Tesla prices adjust to reasonably good deals when we consider what’s happening now and what might happen -

Yeah, it’s a pickle, huh? Wait and see might no longer work well for Tesla and eventually TSLA.

 

[ThisStockGood]

What a drop in pre market. MM waking up?

 

[bkp_duke]

What a drop in pre market. MM waking up?

Opening cross. Pre-scheduled trades beginning 2min before open.

Edit - could be MMs, could be hedgies. Could be nothing.

 

[ZachF]

Unbelievable how some can’t get the basic concept that as long as Tesla is running production as fast as they can, they’re 100% fulfilling their mission and can get as much profit as they want in the process.

Literally nothing changes in the numbers except Tesla makes more profit. The world isn’t any more or less saved because the number Tesla produces and sells this year, next year, or the year after that is entirely different than Tesla’s profits

…and it should be noted that profits are what fund production expansion

 

[Nocturnal]

You can bet that Russia's hacker legions are doing everything they can to destroy Starlink, Tesla, and SpaceX from the inside out.

This is a bizarro trial in fire for Musk company InfoSec. The fact that Tesla.com, Tesla OTA updates, SpaceX, etc etc are all still online is a testament to good security practices and top notch infrastructure design.

Step 1: Piss off a nation state with a well know, robust hacker legion.
Step 2: ????
Step 3: Profit?

Those guys have thousands of targets to deal with. Musk may be needling Putin, but something like the shutdown of McDonald's in all of Russia is probably more painful for Putin politically.

 

[Mengy]

Well at least the market is trending upward for a change. This is nice.

 

[Artful Dodger]

What a drop in pre market. MM waking up?

Not MMs (max pain is 835 so no reason to push down on SP at the Opening Cross):

That sudden drop was more likely wedgies 'closing the gap' to yesterday's trading range:

'cuz that's how wedgies roll...

Heading to the Mid-BB now... let's see what happens then.

Cheers!

 

[StealthP3D]

Ironically, I chose NOT to order my MY a year ago because buying my M3 taught me that Tesla just lowers prices after the initial novelty wears off a newly introduced model. I witnessed several price reductions after I bought my M3. So, having learned that lesson in 2018/2019, I let the MY marinade. Well, the opposite happened with the MY. So I played this exactly wrong...I bought my M3 early, at the peak and now have watched the MY increase $14K month by month before my very eyes. Each time I finish licking my wounds from the last increase and start to reconsider, they do it again! So, I will now wait to see if Berlin and Austin can help burn down the backlog and possibly get the pricing back down...if not, even as a Tesla investor and fan boy, I feel the MY is significantly over priced for my personal expectations.

Even though I've only been a long-term investor in TSLA since 2019, I'm finding the exact price Tesla choses to sell their products at rather insignificant in the big picture. It's more a matter of where I would park all the cars I would like to own, not whether they changed the price $10 or $20K.

I've considered getting rid of my Model 3P for a new Model S Plaid but my 3 is one of the earliest Performance Model 3's and, truth be told, I'm quite attached to it. it still looks and drives almost like a brand new car, even after having it parked outside under the trees most of the time, running it in rally mode on snow covered mountain roads and using it regularly for trail access on long and rugged Forest Service roads in the North Cascades that are generally only driven by 4x4 trucks and SUV's. Other than irreparably damaging one of the fiber under-fairings (Tesla replaced it for free for some unknown reason) and having one of my front-quarter panels pushed out by fender wells full of slush that repeatedly froze and thawed during a week of winter storms, arctic blasts and driving through deep slush created by road de-icers (also repaired by Tesla for free by loosening a panel mounting bolt, pushing the panel back in and re-tightening the bolt), the rough usage has caused no problems, aesthetic or operationally. It will be four years old this fall and, I can't help it, I am more attached to my car now than when it was brand new! I think I'm supposed to get brake and coolant service but last time I asked Tesla about it they said to just keep driving it!

I imagine as a forum member since 2016, your Tesla stock has appreciated a ton, if you want a new one, don't be shy about throwing $14K more Tesla's way. By my reckoning, that's only 3.4 pre-split shares! The cars are worth it if you want a new one and resale value is insanely high.

 

[SunCatcher]

Those guys have thousands of targets to deal with. Musk may be needling Putin, but something like the shutdown of McDonald's in all of Russia is probably more painful for Putin politically.

I doubt if Putin is reacting to Elon's tweet with anything but a chuckle. A nervous chuckle, but nonetheless.

Can't we just skip ahead and get this over with?

 

[15Peter20]

Even though I've only been a long-term investor in TSLA since 2019, I'm finding the exact price Tesla choses to sell their products at rather insignificant in the big picture. It's more a matter of where I would park all the cars I would like to own, not whether they changed the price $10 or $20K.

I've considered getting rid of my Model 3P for a new Model S Plaid but my 3 is one of the earliest Performance Model 3's and, truth be told, I'm quite attached to it. it still looks and drives almost like a brand new car, even after having it parked outside under the trees most of the time, running it in rally mode on snow covered mountain roads and using it regularly for trail access on long and rugged Forest Service roads in the North Cascades that are generally only driven by 4x4 trucks and SUV's. Other than irreparably damaging one of the fiber under-fairings (Tesla replaced it for free for some unknown reason) and having one of my front-quarter panels pushed out by fender wells full of slush that repeatedly froze and thawed during a week of winter storms, arctic blasts and driving through deep slush created by road de-icers (also repaired by Tesla for free by loosening a panel mounting bolt, pushing the panel back in and re-tightening the bolt), the rough usage has caused no problems, aesthetic or operationally. It will be four years old this fall and, I can't help it, I am more attached to my car now than when it was brand new! I think I'm supposed to get brake and coolant service but last time I asked Tesla about it they said to just keep driving it!

I imagine as a forum member since 2016, your Tesla stock has appreciated a ton, if you want a new one, don't be shy about throwing $14K more Tesla's way. By my reckoning, that's only 3.4 pre-split shares! The cars are worth it if you want a new one and resale value is insanely high.

Model 3 will be a collector’s item in the near future. I’m HODLing my TSLA and my Tesla.

 

[bkp_duke]

Not MMs (max pain is 835 so no reason to push down on SP at the Opening Cross):

View attachment 781602

That sudden drop was more likely wedgies 'closing the gap' to yesterday's trading range:

View attachment 781603

'cuz that's how wedgies roll...

Heading to the Mid-BB now... let's see what happens then.

Cheers!

FYI, Max Pain was 820 this AM.

 

[lafrisbee]

True, but they applied for the parking permit 27 mths ago.

I vote this for "POST OF MERIT"!

 

[Silent Ludicrosy]

I doubt if Putin is reacting to Elon's tweet with anything but a chuckle. A nervous chuckle, but nonetheless.

Can't we just skip ahead and get this over with?

 

[SunCatcher]

View attachment 781618

Right on. Elon does seem to have a penchant for taking on bullies, and he has the scars to prove it.

 

[MartinAustin]

I wonder when we will see First Stage MECO?