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

[StealthP3D]

what was the case about?

Literally nothing.

Unless you count the lunatic ravings of a madman as something.

 

[Artful Dodger]

I will be tracking base configurations (no upgrades on wheels, paint, etc).

Any way to track the FSD option effect on delivery wait? That's an outsized effect on gross margin because all the development work is done anyway, with addtional FSD sales flowing straight through to gross profit.

Cheers!

 

[jhm]

While the thread is locked, a reminder:
All have been told that requisite to participating in this thread is subscribing to Moderators’ posts.

This occurred not for some (truly bizarre) vainglory. Rather, it was so that no participant could whine “Oh! But I hadn’t seen that directive/admonition/warning…gee, the Mods should have warned me because - well, because I’m special .”

Now, here’s a poorly-kept secret: Mods know very well most participants have not so subscribed. Not having done so, however, means the writer of a deleted post first, has no standing for complaints, and second, has no standing for asking “But what did I do wrong? I don’t even know which post of mine was deleted” (yes, we even get statements like that).

Is there a "subscribe" button somewhere? I can't seem to find it.

 

[wipster]

I'm going to share this on Twitter. Great suggestion.

If that's the case, it's probably against SEC rules...

 

[Artful Dodger]

It also seems like the market finally caught on to Wal Marts laughable valuation too.

You did this.

 

[Fred42]

Most "solar installers" on Facebook are purely marketing firms. They'll propose the job and sign the contract THEN go find an installer.

The entire marketplace is a hot mess. Tesla may very well do standard panel installs(not solar roof) in your area. Throw your address in in the Tesla site and it'll tell you what's up.

Weren't you going to provide an oil inventory 'inflation index' yesterday?

 

[betstarship]

Boring is paying a franchise fee in addition to regular federal, state and local taxes that would apply to any business. The Franchise Agreement can be read here and Section 8 defines payment terms as follows:

"Quarterly Gross Revenue less than or equal to a threshold of $17,500,000: 0.5% of quarterly Gross Revenue to COUNTY​

Quarterly Gross Revenue more than a threshold of $17,500,000: 0.5% of the first $17,500,000 of quarterly Gross Revenue and 5.0% of all quarterly Gross Revenue in excess of $17,500,000 to COUNTY"​

For today, @MP3Mike is correct in saying that Tesla gets paid by Boring Co solely for supplying the car hardware. Technically, this is not an exclusive supply agreement; in theory, competitors could also supply cars if they can present a compelling business case for Boring not going 100% Tesla. The main benefit to Tesla currently is the immense amount of free marketing I’ve been ranting about this week. Instead of paying for ads or luring customers into Tesla showrooms, now we get LVCC Loop going to where the people already are and effortlessly convincing them to ride in Teslas. It almost seems too easy, but as Sun Tzu said in the Art of War:

The supreme art of war is to subdue the enemy without fighting...The greatest victory is that which requires no battle...To foresee a victory which the ordinary man can foresee is not the acme of excellence. Neither is it if you triumph in battle and are universally acclaimed "expert"... In ancient times, the skillful warrior conquered an enemy easily conquered and, therefore, the victories won by a master of war gain him neither reputation for wisdom nor merit for courage. He wins his victories without erring. Without erring he establishes the certainty of his victory; he conquers an enemy already defeated.​

The big unknown, and why I think this is so hugely important for TSLA valuation, is that we do not know yet what the payment structure for FSD licensing would look like and how much of the revenue would be allocated between Tesla for offering the software and Boring for building the enabling infrastructure to make the robotaxis about 2-3x more valuable. FSD licensing and increased demand for robotaxis that can also use the surface roads to go to places not served by Loop stations is where the big money for Tesla will come from.

Speed is a win-win for robotaxis, because the customer is getting a more valuable service and the robotaxi is doing more payload trips per 24 hours with passengers and/or cargo. At the risk of stating the obvious, this is why conventional human taxi drivers are notorious for driving as quickly and aggressively as possible.

Energy efficiency is a less obvious benefit for the speed and utility per robotaxi, and by extension Tesla's mission success and profitability. Energy usage costs money and battery supply, plus charging takes a significant amount of time during which the robotaxi is useless. The fact that Tesla worked so hard to reduce power consumption on the FSD computer is a sign of how important this is. According to calculations done by me and some others on Reddit in r/BoringCompany, energy efficiency in a Loop will be significantly better than any form of motorized transport possibly could be, except the likes of electric scooters/bikes/skateboards, especially when evaluated on average across a year on a per-passenger basis. Here's why:

Spoiler

• The vehicle will not be frequently accelerating, decelerating and turning sharply
• The capacity factor (average percentage of seats actually filled with a passenger when the vehicle is moving) will be much higher than for a bus or train or typical 5-passenger personal car that's 80% empty most of the time
• Most of the fleet can be smaller vehicles around the size of a Smart ForTwo to serve the roughly 90+% of trips with one or two people who want to leave immediately and go directly to their destination without stopping
• The routes will be flatter in general than the aboveground surface topology in hilly locales
• Airflow in the tunnel moves with vehicle stream due to the piston effect (link) because the tunnel is basically just a big smooth pipe, reducing airflow velocity relative to the car, essentially like flying an aircraft with a strong tailwind. Especially, vehicles in a platoon formation (basically a train but with cars linked dynamically with software instead of static metal hitches) will have a long, relatively uninterrupted slipstream. Vehicles ride for free in the low pressure wake behind the vehicle in front of them.
• Drivetrain efficiency will be very good for the upcoming Tesla Battery Day powertrains which will be in mass production by 2023.
• Rolling resistance will be minimized by the properly maintained tires and road surface as well as the mild temperatures, and also they can probably use smaller diameter wheels.
• Aerodynamics of dedicated robotaxis actually can significantly improve on Model Y's coefficient of drag, because with a robotaxi we can eliminate the side mirrors, add fairings over the rear wheels, add side skirts like commercial trucks have, and add a tail fairing on the back side of the vehicle. (These are not aerodynamic features suitable for the traditional consumer vehicle marketplace.) We might even be able to tweak the general shape of the vehicle since exterior styling is less of a concern. Finally, we may be able to have a lower ground clearance for a tunnel-only taxi.
• The road is smooth because it's not being continually stressed by weight from big trucks, ice wedging, temperature variation causing thermal expansion and contraction, UV radiation, tree roots, and shifting soil
• The road isn't covered with rainwater, snow, slush, or hail from the pesky atmosphere and it will be clear of all debris

A large portion of this benefit is offset by the high speeds, but without knowing the exact operational plan and without doing computational fluid dynamics simulations it's futile to try to guess.

@MP3Mike is also correct in saying that LVCC Loop does not have any app, but that's because it's a simple system that only serves the LVCC. If you're in the center station, you indicate which way you want to go simply by walking to the left side or the right side after getting off the escalator. To my knowledge (and I believe I've consumed every morsel of publicly available Boring Co information released since 2017) we have not heard anything yet about how the app for the larger Vegas Loop would actually work or whether it would be just the Tesla app or a separate Loop/Boring app.

57k passengers per hour is the nominal peak capacity for the 29-mile first phase. However, 57k is massively sandbagging in my opinion, possibly by more than an order of magnitude in the long run. And last year Steve Davis formally went on record in the public Clark County hearing saying they will probably beat 57k. If the robotaxis for busy routes seat up to 8 people and they hit a 1-second headway like Elon claimed in 2019, that'd be up to 29k passengers per hour in just one lane. Safely maintaining 1-second headway is likely not feasible outside an enclosed, tightly controlled environment that is present in the tunnels. Yet another reason Loop will be a huge boost for Tesla robotaxis.

View attachment 806170

I have posted this before but here is my Boring Co spreadsheet. At this point I've spent hundred of hours researching the content and I think it's highly relevant for understanding the future of Tesla's robotaxis, Elon's wealth and credibility with the public and macroeconomic efficiency. Please DM me if you are interested in helping out with further development.

I apologize for not including any politics in this post, since that's clearly what's most important today.

I read through some of your spreadsheet was pretty inspired by the Prufrock calculations, it reminded me of something I read recently:

L.A. Metro’s East San Fernando Valley Transit Corridor accepted into FTA’s expedited delivery program

The 6.7-mile light-rail project becomes the second to enter the pilot program intended to speed delivery of certain transit capital projects.

www.masstransitmag.com

Kiewit-led Joint Venture Secures $235M BART Silicon Valley Extension

The Kiewit Shea Traylor (KST) joint venture wins the progressive-design build contract that will link the VTA and BART rail systems via a tunnel under downtown San Jose.

www.enr.com

The US federal government is enacting an "Expedited Project Delivery (EPD) Pilot Program" that minimizes costs of transit project and speeds up their funding. I've read about a number of California related transit projects that got jumpstarted very quickly once Tesla moved to Austin at the end of 2021.

Further, I found this as well from 2019....right in the backyard of Tesla's previous HQ.

https://www.sanjoseca.gov/home/showpublisheddocument/45827/637114866861730000

San Jose: Mayor in talks with Elon Musk’s Boring Company for airport tunnel

Mayor Sam Liccardo wants to connect Diridon Station to Mineta San Jose International Airport.

www.mercurynews.com

Is it possible that Boring Company could sell Prufrock as a product or service, at the least and not Tesla cars for the full realized vision, for transit projects that have a tunneling component?

 

[elasalle]

https://twitter.com/x/status/1527397380001234944

 

[TheTalkingMule]

Weren't you going to provide an oil inventory 'inflation index' yesterday?

It was 7.2

 

[Artful Dodger]

Drove the Icefields Parkway between Banff and Jasper on Sunday in my new Model Y. Gorgeous scenery; fabulous motor. Put 1,500 km on the odo over the weekend, more to come soon (bought an Annual Pass to the Nat'l Parks). To the Moon!

Cheers!

 

[TN Mtn Man]

I've seen this counter argument to a stock buy back many times but it's always been a flawed counter argument and doesn't really hold any weight to me

The reality is that a Robotaxi service is at least 1.5-2 years away. I think we can all agree on that. With each Gigafactory, we have an idea of just how much one can add to FCF once it's at volume production. We have two new factories going through that process right now. And Shanghai has a further expansion ahead of it. By the time a Robotaxi fleet needs to be built, and remember a lot of 3/Y's will be coming off lease by then that will be inducted into the fleet, Tesla will likely have 5-6 Gigafactories at volume production. You're talking 5-6 billion in FCF every quarter.

A robotaxi fleet isn't going to need 500,000 vehicles right at the start. It will grow over time. Let's say Tesla wants 150,000 Model 3's to act as a Robotaxi for the first year in the US. That's roughly 5.2 billion for Tesla to build those 150,000 Model's ($50k ASP minus gross margin - 35K cost to Tesla to build).

So just one quarters FCF will cover the start of the Robotaxi service.

But wait........you're forgetting another important aspect. If a Robotaxi fleet needs to be made, well then that means FSD has been solved and FSD is already in wide release, unlocking billions in additional profits and cash. I don't know why people don't get this. If Robotaxi is a thing.....then FSD was completed, unlocking huge levels of profits and cash. You can't have one without the other.

And lastly, it completely ignores the point of the post that I made. In that, it's better for Tesla to use the extra 2 billion in FCF per quarter for stock buy backs, especially when the stock has been cut in half by 50%.

Say Tesla succeeds with FSD, and then needs capital for Robotaxi, then they can do a offering......ya know I think Tesla's market cap just might be a bit above where it is today in a scenario where FSD is achieved


Tesla has 2022 already mostly sold out. The only trims that aren't are the high end 3/Y's. Tesla's order log is about recession proof as possible. Tesla has no debt and 18 billion in cash. Tesla is already prepared for a recession. In fact, I'd say they're overprepared. But that's never a bad thing.

It is bad to just have cash sitting there while you generate 2 billion more in cash each quarter in high inflation environment.

I don't know if that's possible. Assuming we do have a recession (another topic), most companies, especially ones with significant debt, will be forced to curtail spending. Spending on new production equipment, on new factories and on R&D/product development. In addition-companies that make production equipment and tooling, as well as raw material suppliers, will be down on orders, and be much more inclined to facilitate deliveries and offer better prices. And material suppliers will be more willing to lock into long-term contracts at a lower rate. If Tesla is in a position to move ahead while others are retreating, it simply means they come out stronger than ever. And the future for legacy looks worse and worse. Tesla has the cash reserves to charge ahead, in spite of a (potential) looming recession. I don't believe any other auto manufacturers are.

The other issue-personally I think Tesla is going to be forced to get into the materials production industry for raw battery materials. Lithium, cobalt, copper (perhaps) and nickel. Some of the companies in those industries will be less solid in a recession, offering opportunities to Tesla. Most companies in those industries-and companies that build extraction and processing equipment have limited resources. If Tesla does get involved in one or more of these materials industries and puts their engineering and development resources into it-there is a chance to change that entire industry, not just secure a source of supply for Tesla.

 

[Gigapress]

Is it possible that Boring Company could sell Prufrock as a product or service, at the least and not Tesla cars for the full realized vision, for transit projects that have a tunneling component?

That’s kind of already in the plans, but it’s for selling completed tunnels, although it won’t work for train or bus projects because the diameter is too small.

Right now the product menu includes:

• Loop (and “Hyperloop tomorrow”)
• Pedestrian
• Utility
• Freight
• Bare

If you need a cheap 12-ft underground tube with concrete walls, TBC’s got you covered.

The more tunnels they make, the cheaper it’ll get per mile, probably following a Wright’s Law cost curve like almost all new tech. So the existence of these other market needs besides Loop is good for us because the cumulative overall tunnel demand will drive economies of scale and innovation that end up reducing the price of Loops.

Loop right-of-way fees will be one of the primary elements of the cost structure of Tesla Network, so these scale benefits from Boring Co having such a large total addressable market will have positive knock-on effects for robotaxi profitability.

Lower robotaxi cost structure also enables expansion on the margin further out into lower density areas with previously unfavorable economics which further improves overall Tesla Network profit potential.

 

[betstarship]

That’s kind of already in the plans, but it’s for selling completed tunnels, although it won’t work for train or bus projects because the diameter is too small.

Right now the product menu includes:

• Loop (and “Hyperloop tomorrow”)
• Pedestrian
• Utility
• Freight
• Bare

If you need a cheap 12-ft underground tube with concrete walls, TBC’s got you covered.

The more tunnels they make, the cheaper it’ll get per mile, probably following a Wright’s Law cost learning curve like almost all new tech. So the existence of these other market needs besides Loop is good for us because the cumulative overall tunnel demand will drive economies of scale and innovation that end up reducing the price of Loops.

Loop prices being lower will in turn reduce the cost structure of Tesla Network while also enabling further expansion into lower density areas with previously unfavorable economics.

Three cheers to that!

 

[Zero CO2]

I think there needs to be a master plan on how to make robotaxies profitable because it's not

1. Build robotaxies
2. Profit

I think it's more like this if FSD is considered solved

1. Have Tesla owners buy FSD to become comfortable with FSD <--profit
2. Have additional tesla cars sold to customers to multiple millions <--profit
3. Have these millions of new people getting comfortable with FSD
4. People start sleeping or watching TVs in cars
5. Start public ran ride hailing <--- money losing
6. Build robotaxies <--- money losing
7. Robotaxies become mainstream <--- profit

i am at 3 waiting for 4

 

[TN Mtn Man]

California Q1 2022 Registrations

Tesla passes Honda Group( Honda brand + Acura) to become #2 CA automaker!!!

Brand..................CA 2021 YTD.................................... % Share

1. Toyota........73,941 ...........,..........................17.4
2. Tesla.........48,038......................................11.3
3. Honda........38,706.........................................9.1
4. Ford...........37,106..........................................8.7
5. Chevrolet...23,469..........................................5.5
6. Nissan........20,156..........................................4.7
7. KIA.............18,893............................................4.4
8. Subaru......17,302............................................4.1
9. Merc Benz..16,521..........................................3.9
10. BMW..........16,168............................................3.8
11. Hyundai......13,368...........................................3.2
12. Jeep............13,161..........................................3.1
13. Lexus..........12,228..........................................2.9
14. RAM...........10,889...........................................2.6
15. Mazda..........10,095.........................................2.4
16. Volkswagen..8,388........................................2.0
17. GMC.............7,717..........................................1.8
18. Audi..............7,042.........................................1,7
19. Dodge..........4,412.........................................1.0
20. Porsche........3,463...........................................0.8
21. Acura ...........3,155.........................................0.7
22. Land Rover ..2,936.........................................0.7
23. Volvo.............2,913..........................................0.7
24. Cadillac.........2,619..........................................0.6
25. Chrysler........2,204..........................................0.5
26. Mitsubishi.....1,515..........................................0.4
27. Genesis.........1,490.........................................0.4
28. Mini...............1,446.........................................0.3
29. Infiniti............1,301..........................................0.3
30. Lincoln..........969............................................0.2
31. Buick...............958................,,..........................0.2
32. Alfa Romeo....590..........................................0.1
33. Jaguar...........436.............................................0.1
34. Other..............984.........................................0.2
    
    
    Total...........................452,216................................100

Fiat no longer generates enough sales to be ranked instead included in "Others."

https://www.cncda.org/wp-content/uploads/Cal-Covering-1Q-22-002.pdf

Wow! In terms of revenue they must be stomping everyone given the average sale price of their vehicles. To say nothing of earnings, with ~30% margins in auto.

 

[Discoducky]

Bill Gates doing an AMA on Reddit.

View attachment 806268

I asked the question, you should upvote it

https://www.reddit.com/r/IAmA/comments/ut7yj0/_/i98r0q8

Upvoted and as I used to work for him (Microsoft/XBOX) and know a person at the foundation who went there to help sustainability, I applaud anyone who helps get to the bottom of why he is doing this. Out of all the things that he could do to make money, why this?

 

[TN Mtn Man]

Another thought concerning FSD vs "the world". Companies like Cruise or Waymo that have crude version of "self driving" on the streets, are not incorporating this technology into high-volume, cost sensitive vehicles. They have very expensive, low volume, "prototype-like" systems added to existing, production vehicles (and of course only operate in limited, geofenced areas). Legacy auto doesn't seem to be that focused on full, point-to-point FSD like automation, rather focusing more on highway driver assist systems. Tesla has all the technology (plus AI) of Cruise or Waymo, integrated in every single production vehicle-at a cost they can't touch. I think this advantage is drastically understated.

Over the last years most have heard about Tesla's FSD, seen some youtube videos and heard about accidents with autopilot (often not differentiation from 2016 AP and current FSD). They have heard the FUD from the luddites and the competition. Those that haven't really been following closely, and watching the fantastic level of improvement in just the last 12 months, don't appreciate just how close this is or how powerful it is. Once FSD is actually released "for the masses" and people see other drivers napping on their daily commute or (legally and safely) playing on their phones-it's a game changer.

 

[MikeC]

Elon: “Tesla is on my mind 24/7”

https://twitter.com/x/status/1527418023069503511

 

[Prunesquallor]

I think any recovery of expenses from Mr. Greenspan would be highly unlikely. People that have hated Tesla and Elon Musk for this long and with so much spite have generally lost a lot of money betting against him. Ideally, people like this sue before they have lost everything but that's not normally the way the ball bounces.

One by one these hateful, despicable people fall by the wayside and that is more rewarding than any cash recovery could ever be.

Shlabooshka

 

[Cherry Wine]

“Tesla is on my mind 24/7”

https://twitter.com/x/status/1527418023069503511

Can't wait for this shitstorm to be behind us.