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

[betstarship]

Still no. Look at some of the details they provide:



So while they have a capacity of 4,500/hour, they are only expecting 32,000/day. So they are only expecting an overall ~30% utilization. That might be higher in Las Vegas, or it might be lower because they build out for a higher peak capacity.

Got it, thank you for the insight and ... better detailed reading ... har har har

If we're using the ~30% utilization rate, then its about a 1/3 of $5B, only $1.5B from Las Vegas? I'm wondering because that city runs 24/7 and whether the utilization rate might be higher...

 

[bballshinobi]

So what's up with the accelerated delivery of MY Tesla offers for waiting buyers?

279 miles of range vs 330 LR
0-60 in 5.0 seconds vs 4.7 LR

Is this the new form factor with front and rear gigacastings and new batteries?
Why would anybody go for lower range and acceleration?

Probably because they can take delivery right away instead of waiting 6-9 months.

 

[MP3Mike]

Are you sure? Which company are riders going to interface with in terms of a mobile app to hail a ride...? Would these Tesla vehicles strictly be sold to Boring company and be used in the tunnels or, as mentioned by Elon in various talks, have ways to get surface-side and go via roads outside of the tunnels?

(not asking leading questions, I really don't know)

Yes, I am pretty sure. They are already operating in Las Vegas, with the LVCC Loop, and Tesla isn't involved with an app. I don't think you hail a ride, you just show up at a station and take the next one. (I don't know how they handle payment.)

Also, look at their page, they show ride rates from $5-$10: Vegas Loop — The Boring Company

But again, the only revenue Tesla is likely to see is for ~500 vehicles. Right now it is fully operated by drivers... (Maybe they buy FSD in the future, or maybe they contract with Tesla for custom code to operate in the loop. I guess it is possible they enter into a revenue sharing agreement if Tesla provided code to allow driverless operation, but that isn't currently what is happening.)

If we're using the ~30% utilization rate, then its about a 1/3 of $5B, only $1.5B from Las Vegas? I'm wondering because that city runs 24/7 and whether the utilization rate might be higher...

Again, cut your fare down to $7.5 or something to account for a lower average fare, and while utilization might be higher in Las Vegas because they are 24x7, it is also likely to be lower as it has to be built out to handle a higher peak capacity.

 

[henchman24]

As of now, it looks like Tesla's 100 week EMA/MA is providing support.

 

[StarFoxisDown!]

If Tesla is battery constrained, they can stretch the number of cars they sell by offering the lower mileage variant. Not positive that's the reason, but may be.

No it’s better for Tesla to have as high of production out of Texas as possible, as soon as possible. Btw this isn’t a new plan. This plan for the Austin made Y would have needed to be set in place at least 4-6 months ago, if not longer.

So this was always the plan. Since Tesla is still ramping 4680 cells, for operating efficiency and thus operating margins out of Texas, it’s exponentially better to produce more Y’s with a smaller battery pack than fewer Y’s with a larger pack. Big difference there in terms of operating margins. Given that they’re charging 60k for the Austin made Y, gross margins will probably be good as well

 

[ZachF]

That's no surprise, the majority of people buy products they like no matter what political affiliation the CEO is, nor however the CEO conducts his personal life. There is a vocal minority who conduct crusades against this or that based on feelings and emotions, but most people don't really care about that kind of stuff, they simply buy what they want and enjoy their lives. Steve Jobs was a terrible person yet iPhones have always sold incredibly well. Bill Gates ain't no angel yet Microsoft and Windows are giants to this day.

Great products sell themselves, and the truth is no amount of effort by any vocal minority will change that.

USA is about 1/3rd even split between D, R, and I. The slight D bias towards the buyers probably has more to do with Tesla’s current lineup than anything else. (No truck yet… Rs love their trucks)

The best way to sell the Cybertruck IMHO (and solar) is the self sufficiency angle. This is an important factor to more rural customers. Solar + Cybertruck is like the ultimate in self sufficiency.

This is what I am working for one day, honestly. I’d love to have a ranch/farm with massive amounts of solar & batteries and a quad motor Cybertruck plus an electric surplus to sell back. 2030+ American dream right there.

 

[ZachF]

You know, I was sort of hoping we'd go through a Roaring '20s, and then we all could have tried to sneak out the back door in mid-2028, but right now it feels like we missed the memo that changed things to Roaring '21.

The original roaring 20s didn’t start off that great BTW. Spanish flu, an economic depression, and lots of countries (like Germany) had their currencies totally collapse.

 

[Nocturnal]

What’s worse is that if you go back to webush’s earlier notes from the last 6 months, their base case PT of 1400 (with a bull case of 1800) is predicated on Tesla achieving a 2 million annual run rate by the end of 2022. Absolutely nothing has changed there.

He also mentions 6 months ago, his PT was based on Tesla expanding margins…..which they did. While Q2 margins might take a hit, they will continue to expand margins in Q3/Q4.

Dan Ives is a story/narrative driven analyst who really uses top line numbers without doing any of the actual work.

Can we attribute this to the multiple compression?

The best way to sell the Cybertruck IMHO (and solar) is the self sufficiency angle. This is an important factor to more rural customers. Solar + Cybertruck is like the ultimate in self sufficiency.

Relevant. I follow this guy for basic prepping tips (don't worry, the only cult I'm in is Tesla) and because I find hard core preppers fascinating. He pushes hard for the solar/EV self sufficiency angle in the event of disasters or strife. He LOVES the Cybertruck.

 

[Darkfox021]

No it’s better for Tesla to have as high of production out of Texas as possible, as soon as possible. Btw this isn’t a new plan. This plan for the Austin made Y would have needed to be set in place at least 4-6 months ago, if not longer.

So this was always the plan. Since Tesla is still ramping 4680 cells, for operating efficiency and thus operating margins out of Texas, it’s exponentially better to produce more Y’s with a smaller battery pack than fewer Y’s with a larger pack. Big difference there in terms of operating margins. Given that they’re charging 60k for the Austin made Y, gross margins will probably be good as well

Add product differentiation to not Osborne Fremont built MY with 2170 cells.

 

[scubastevo80]

Converted another 100 shares to 3 Jun 24 850 Leaps (~ 220 each) ... at $702 price
each time seems like it will be a good day .... but end the day in the red ... got a few more tranches I can manage

How do you guys do the math on this ~$70k worth of risk? I am doing this correctly? Not sure whether I should be taking option value or assuming taking delivery of shares...

100 shares going from $700 to $1200 = $50k profit. To $1400 = $60k profit.
3 LEAPs in June'24 are worth $45k at $1200 and $100k at $1400 (based on OptionProfitCalculator)
300 shares going from $850 strike to $1200 = $83k profit (($1200*300shs)-($850x300shs)-$22k option cost). At $1400 its a $143k profit.

 

[Krugerrand]

Unfortunately, fund managers don't see things the way you AND I see things. Fund managers think Cruise and Waymo are ahead of Tesla and Tesla's FSD is dangerous and could be outlawed. They want to see Tesla focus on the automotive business and grow out more consumer options because if they don't, other manufacturers will catch up by offering variety verses Tesla's two models that aren't really that different from each other.

News flash - that’s not how fund managers see things or how they think or what they want.

#1 They want to make money
#2 They don’t actually care how they make it
#3 They say whatever, do whatever is necessary to make money; including but not exclusive to lying, fabricating, regurgitating worn out talking points, making up bs, instilling base emotions like fear in others.
#4 Did I mention they are habitual liars?

Think of Wall Street et al like another version of a politician and you’ll have a better grasp of who these people are.

 

[Paul_SF]

Waiting for Elon to start tweeting….


JK!!!

 

[betstarship]

News flash - that’s not how fund managers see things or how they think or what they want.

#1 They want to make money
#2 They don’t actually care how they make it
#3 They say whatever, do whatever is necessary to make money; including but not exclusive to lying, fabricating, regurgitating worn out talking points, making up bs, instilling base emotions like fear in others.
#4 Did I mention they are habitual liars?

Think of Wall Street et al like another version of a politician and you’ll have a better grasp of who these people are.

That's IF they're paid on performance, no?

 

[UncaNed]

USA is about 1/3rd even split between D, R, and I. The slight D bias towards the buyers probably has more to do with Tesla’s current lineup than anything else. (No truck yet… Rs love their trucks)

The best way to sell the Cybertruck IMHO (and solar) is the self sufficiency angle. This is an important factor to more rural customers. Solar + Cybertruck is like the ultimate in self sufficiency.

This is what I am working for one day, honestly. I’d love to have a ranch/farm with massive amounts of solar & batteries and a quad motor Cybertruck plus an electric surplus to sell back. 2030+ American dream right there.

I hope you're right, but Isn't there strong conservative bias against selling extra solar power? They seem strongly anti-solar, stopping otherwise win-win solar farms everywhere, no??

 

[Olle]

Elon does what fits his needs at that moment in time. Not rekindling the Texas/CA Dem/GOP debate, just saying Tesla likely doesn't exist without CA's support. Elon's cold execution is perfectly delightful for me. CA is now a hindrance, so off he goes to TX with no feelings or hesitation.

Is that fair to CA? Who cares. It's what's needed right now for the Master Plan, end of story. We're seeing a lot of Elon's less than perfect human side these days.....and personally I like it. Was getting worried I might be in a cult or something since NOTHING this dude was doing seemed to be "wrong" before the pandemic.

We're in such crap shape in the US right now, there's really no point in arguing who's "best". Everyone is tied for worst.

Therefore this MUST be the bottom! ($702.29 @ 2:35 Eastern 18May2022)

This!
I would go as far as saying that Elon's ability to focus on one goal only is the main reason for his success. His Aspbergers might actually help him to treat all other factors, including politics, like pawns in the game. Cold, calculating and devoid of emotion.

In this Kara Swisher interview he articulated how he thinks about the environment and Tesla's role relative the rest of the world:

Elon Musk: The Recode interview

Musk talks about his "excruciating" 2018, fighting with journalists on Twitter, why Tesla won’t build an electric scooter and much more.

www.vox.com

Elon quoted from the interview: "It’s very important for the future of the world. It’s very important for all life on Earth. This supersedes political parties, race, creed, religion, it doesn’t matter. If we do not solve the environment, we’re all damned."

 

[Drax7]

To be clear, I'm only discussing, not advocating for the buy back position, i.e. I have no 'want'.

Using future free cash flow to purchsse TSLA would not reduce the cash on hand from present levels. They could even only allocate a portion of FCF to purchases so their cash would still grow. If they hold the shares instead of removing them from circulation they can always sell them for cash later.
If the most recent cap raise ends up being made superfluous by company performance, then a share reducing buyback reverses that action (potentially at a profit).

How do you get to producing 20 million cars per year if not through extensive
capital investment, that’s the best use of free cash flow. Until Tesla
nears that goal it seems unlikely share buy backs are a priority,
Especially and purely for the purpose of sustaining the stock price.

 

[ZachF]

I hope you're right, but Isn't there strong conservative bias against selling extra solar power? They seem strongly anti-solar, stopping otherwise win-win solar farms everywhere, no??

Just deciding to make enough power for themselves and their trucks is a massive win and a huge step in the right direction.

 

[MontyFloyd]

I hope you're right, but Isn't there strong conservative bias against selling extra solar power? They seem strongly anti-solar, stopping otherwise win-win solar farms everywhere, no??

Texas (hard Republican) has the biggest wind generating plants in the US, and a growing number of PV installations, and it was mostly funded by Republicans in state (despite the lies of Republicans being against "green new deal", it actually the opposite).
Texas has 5x the wind generation than California (shocking, I know).

Thoughts on that, @ZachF ?

 

[bkp_duke]

I hope you're right, but Isn't there strong conservative bias against selling extra solar power? They seem strongly anti-solar, stopping otherwise win-win solar farms everywhere, no??

This is a fallacy promoted by people that . . . have never actually talked to these people.

They have zero beef with solar in particular, and love the self-reliant aspect of it.

What they do have a beef with is:
1) Made in China Solar (they WILL bring this up)
2) What happens when the sun goes down? They have to be better educated on this, the concept of batteries that last all night is not intuitive to them.
3) Cost - time to payback is important (and it's VERY long in the southeast USA, where power is super cheap at about 10c/kwh).

You get past those three things, you make a sale to them easy.

You might ask how I know these things? I've got a lot of family in this area, and the topic of conversation always comes up at family gatherings and they see my Tesla (which they don't have a problem with, btw - - they just want a more "traditional" looking truck to schlep around in).

 

[elasalle]

How do you guys do the math on this ~$70k worth of risk? I am doing this correctly? Not sure whether I should be taking option value or assuming taking delivery of shares...

100 shares going from $700 to $1200 = $50k profit. To $1400 = $60k profit.
3 LEAPs in June'24 are worth $45k at $1200 and $100k at $1400 (based on OptionProfitCalculator)
300 shares going from $850 strike to $1200 = $83k profit (($1200*300shs)-($850x300shs)-$22k option cost). At $1400 its a $143k profit.

Conversion to 3 Calls got me a Delta of 186 vs 100 for 100 shares. (so for every $1 increase/decrease in SP, value of calls increases/decrease by $186)
These 850 calls are OTM as they go into the money, the delta's will increase from .3-.4 to more like .5 and above
If IV spikes, or price spikes, I will be selling these calls to get back the shares. If i get 120-130 shares based on it I would be satisfied, but market will drive the decisions.

I could also start selling 3 CCs agains the 3 Calls instead of being able to sell just 1 call. Also I will not be waiting till Jun 24 to finalize my decisions.

(+leverage works both ways, more gains/losses are possible ... 2016 times I too more risk, now I am more risk averse and doing these only against shares I have scalped in past by selling CC and buying shares with this strategy)
(++ trade based on own risk profile/portfolio....)

cheers!!