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

[mongo]

On 300,000 deliveries profits were about $3 billion last qtr.

On 3 million deliveries in the near future, profits may reach $30 billion.

That makes it a forward P/E of 22ish within 2 years .

3 million deliveries is a small number when aspiration is 20 million deliveries.

That may be pessimistic; OpEx doesn't scale linearly with production and it also offsets the first X amount of production.
10x production could yield much more than 10x net profit (depends on ASP and gross margin, of course)

Fake numbers:
$10 profit a car
2,000 in opex
Sell 300 cars, net $1,000

Double prod, 50% opex increase
3,000 in opex
Sell 600 cars, net $3,000

 

[SunCatcher]

In for 44 at $660....i am on a mission to prove to my wife i am not dumb!!!

Maybe best to not tell her until you have the pudding.

 

[Everett Ruess]

So.....you holding Tesla for the last 5-6 years has probably made you a significant amount of $$$ and now that it has taken a downturn, you are questioning your 'investment'

Yes more money then I can ever spend. Will hand off my shares to my two sons. With the current tax laws my sons will pay zero tax on millions in capital gains. Congress needs to change the step up tax laws. Where did I say I was questioning my investment? What I said was the Elon is the face of Tesla and everything he does reflects on the company.

 

[TheTalkingMule]

So this is one of the two new Gigafactory locations we expected to be announced this year? The other one being perhaps......in Brazil?

 

[petit_bateau]

Everything will now decentralize, and with that goes the ability to consolidate effectively. That was the key to fossil wealth, and it doesn't exist in the new dynamic.

Certainly abundance by it's very nature will bring wealth, but that's just one universe crashing into the next. Elon being the wealthiest person in the world for instance. That's just because the future is so much better, not because Elon is hoarding or consolidating.

Now it is hard to be a competitive car factory at 100k cars/yr when the normal size is 220-400k and the largest are 1-1.5m cars/yr. But since there are about 200 car factories in the world there is room for everyone to have one, or a few dozen.

In the future it will be hard to be a competitive car factory at 400k cars/yr when the normal size will be 1m-2m and the largest will be 4m cars/yr. In that world there will maybe only 50 car factories. That's not enough room for everyone.

Decentralization will happen in some areas, more centralization in other areas. Much like there are a lot more airliners in the world these days, but effectively only two competitive top-end airframers (Airbus & Boeing, and there is a lot of doubt about the latter).

===

On the wealth side of your answer, yes total wealth may increase but the distribution may become more unequal. The effect of that can be quite savage - but go read Piketty before saying it ain't so.

===

Personally I have no dry powder. Access to buying opportunities like these are skewed towards those with greater wealth. The average inhabitant of (say) Yemen right now is unable to take the opportunity at all as they cannot bear the risk. Ditto for myself.

These (low) prices are crazy.

 

[ZachF]

Indonesia is really the ideal spot. Fantastic for resources, cheap labor, and RHD country that can easily feed Japan, NZ, and Australia in the area... and will likely feed the UK as well (and if expansion actually happens to other RHD countries). This will stop Shanghai from having to swap from LHD to RHD every quarter.

Giga Indonesia could take over as the export hub and retire a lot of political risk, IMHO. Shanghai can focus on the giant Chinese domestic market, and Indonesia will probably have a lower cost basis anyway as Shanghai GDP per capita is only slightly lower than Japan/Korea/Taiwan these days, and its also situated well within the resource supply chain.

 

[M|S|M MYP]

Yes more money then I can ever spend. Will hand off my shares to my two sons. With the current tax laws my sons will pay zero tax on millions in capital gains. Congress needs to change the step up tax laws. Where did I say I was questioning my investment? What I said was the Elon is the face of Tesla and everything he does reflects on the company.

You ended your last post with "And I thought it would be a great investment."

Thought you were questioning your investment with that statement.

 

[ZachF]

So this is one of the two new Gigafactory locations we expected to be announced this year? The other one being perhaps......in Brazil?

Giga Jakarta
Giga Rio
Giga Barcelona
Giga Nashville


Watch…

 

[Richard007]

Can’t resist a sale. In for 50 more 668.69. Asked for 669 but Fidelity got a “better” price. Drats!

 

[henchman24]

So this is one of the two new Gigafactory locations we expected to be announced this year? The other one being perhaps......in Brazil?

Brazil would make the most sense to me.

 

[StealthP3D]

60 at $660. You guys better be right about this coiled spring thingy.

Definitely a coiled spring thingy. It's the timing that is difficult. It could be on the verge of letting go or it could take months.

 

[henchman24]

Giga Indonesia could take over the export hub and retire a lot of political risk, IMHO. Shanghai can focus on the giant Chinese domestic market, and Indonesia will probably have a lower cost basis anyway as Shanghai GDP per capita is only slightly lower than Japan/Korea/Taiwan these days, and its also situated well within the resource supply chain.

Until Berlin can produce the 3 (sadly likely 2-3 years out from that), I'd expect Shanghai to produce all European 3s. But not having to worry about Ys and RHD vehicles will improve their processes.

 

[Beltsbear]

Nice try at oversimplification. You and I both know that free speech, when used SPECIFICALLY to attack someone, does have legal limitations.

Elon has always said that he supports free speech WITHIN THE CONFINES OF THE LAW.

Can you tell me what BI said that would have legal implications? The article is carefully written with things like "documents say" , "according to papers filed" etc. Again, in the USA at least, libel is VERY HARD to prove. You need what you said to be false. And then you need to prove it was done with spite not just incompetence. And a single insulting or wrong thing usually does not even qualify in America for libel. To this point, very few cases of libel stick, let alone have payouts that matter. And don't bother citing the Gawker case, publishing an XXX sex tape made illegally is very different then reporting on papers filed in courts.

Put another way, BI could have a weekly Elon take down article, specifically attacking Elon each week, so long as it was done in the style of the latest article, there would not even be a slight chance of winning that case.

 

[gene]

I’ve said this before and I’ll say it again now. Since 2012, I’ve lived through about 3 dips bigger than this per year. So 3 x 10 years makes for at least 30 dips. In those earlier days it was scary because fundamentals were at risk. Not no more. And here we are with 2012 $25 shares at over $3000 pre split for all of us who just held the ups and downs, we have done very well. I suggest buying more shares as I have been doing or just don’t look at the stock for a few days. Take a break.

 

[betstarship]

Sure, but he still hasn't solved world hunger.

...yet

 

[Drax7]

That mar be pessimistic; OpEx doesn't scale linearly with production and it also offsets the first X amount of production.
10x production could yield much more than 10x net profit (depends on ASP and gross margin, of course)

Fake numbers:
$10 profit a car
2,000 in opex
Sell 300 cars, net $1,000

Double prod, 50% opex increase
3,000 in opex
Sell 600 cars, net $3,000

Of course the growth in profits is not linear,
as economies of scale kick in,
the point being is that the forward p/e
is approaching very reasonable levels
looking forward 2 years.

 

[StealthP3D]

Everything will now decentralize, and with that goes the ability to consolidate effectively. That was the key to fossil wealth, and it doesn't exist in the new dynamic.

Certainly abundance by it's very nature will bring wealth, but that's just one universe crashing into the next. Elon being the wealthiest person in the world for instance. That's just because the future is so much better, not because Elon is hoarding or consolidating.

Elon is hoarding but it's not money he's hoarding. He's hoarding the best engineers. Way better than money!

 

[Chunky Jr.]

The market seems to be pricing in that Tesla will deliver about 16 cars in Q2. I'll take the over.

 

[Big Time]

Not mad, disappointed, upset. It’s the usual TSLA move.
My good thoughts:
2nd line at Shanghai seems good
Austin deliveries seem good.
Semi production on track

Meh thoughts:
Twitter: what a dumb, dumb, dumb, dumb turn of events
Elons political ramblings thoughts: Indonesia, Brazil, China….mb next Elon will call up the Taliban next to support more freedom of speech and human rights governments? He is doing good but somewhere along the way something gets sidetracked in the big picture. I’m not an Indonesia expert by any means but last time I checked they had a few wacky rules regarding freedom of speech and religion. But hey money is money am I right….? Yes, S&P removal grounds was a laughingstock but isn’t it a little……hypocritical to be so outspoken about being how Exxon is awful and TSLA is Green, meanwhile Brazil’s destroying the rainforest, so outspoken about freedom of speach meanwhile China, Brazil, & Indonesia silencing people in opposition of the government. Than directly supporting these places with your tech and products. Pardon my French, but #%!* that entirely.

Watch out for those leftists though Elon! AKA many people who are buying your vehicles. Attaching yourself to the GOP is about the worst idea possible. Proper Fiscal republicans don’t exist anymore in the GOP it seems.
End rant.
Told my GF to pick up another share

 

[thx1139]

The nature of a ramp in a new factory is that it's more important to get all the ducks lined up before pressing the "high speed" button than it is to force as many cars out the door ASAP. It will start in fits and spurts with more emphasis on testing and tuning before the emphasis turns to volume. The cost per car goes way down when the production line is properly setup and tuned. All of this needs to happen in coordination with the supply chain. Until then it's not desirable to make a lot of cars and the pressure is focused on continuing to improve the line. At some point soon we will likely see production rates take a big leap forward and then the focus will be on keeping production high while continuing to fine tune and improve the line (the optimization and fine-tuning never stops).

Of course, the sooner we get to that step-change in volumes, the better. I can see how the German engineering culture, when compared to the Chinese "get 'er done culture", would likely have a longer time to hitting the "high speed switch" but have a faster ramp from that point and it makes sense that the China ramp would be smoother, with more early production that grows more gradually (but still very impressively). The German production will have a higher degree of automation which takes longer to setup but that will likely be able to hit higher rates eventually.

Understood, Just saying from what I have watched and I do watch them daily, it seems that maybe Texas has done less then 1K total. I hope that carriers are coming in and the lots are simply getting filled when drones arent flying. Makes me worry more about 4680 production then cars.