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

[vikings123]

I bought a Bolt in 2017 and I still have it. Last year, I got a Model Y to go with it. Obviously, the MY is vastly superior.

But the Bolt is a good car and a great value for those who can't afford a Tesla. The battery problems have scared people off. This is too bad because without the battery issues GM could have scaled up Bolt production and we'd have more EV's on the road.

I view it as positive for GM. I'm guessing their their battery recall campaign is now under control. And after ramping battery pack capacity to do the recall, they must be in a position to really punch out a bunch of new ones. The revised Bolt EV and new slightly bigger EUV fixed a lot of stuff that was annoying in the original. (Interior details, etc.) Its' Archilles' heel remains its 55 kW max DC fast charging for road tripping.

I guess you are saying that the price reduction/demand issues is mostly because of the issues they had with their battery. Unfortunately for GM we are not in 2018/19. There is a lot more competition from other automakers + buyers can avail the tax rebate.

I look at this as a negative for GM. They are struggling to make EVs and now they also have to compete on pricing.

 

[thx1139]

You’re being obtuse and that which you just said was a problem - being an absolutist. Obviously, employees are given a choice of staying at one factory or moving to another or quitting.

People have always had the power to be adults. Look where that’s got us.

You made the point that the engineers need to be close to the problem they are trying to solve. If the engineer is in say Tesla California where he/she has worked on issues in Fremont, but now the issues are no longer in Fremont and now in Texas. Do you make the person move to Texas?

 

[henchman24]

The good thing for GM about Bolts is it shows they are confident in the issues being behind the car and can sell in volume. The obvious downside is they have to undercut the market to get any sales.

 

[StarFoxisDown!]

I guess you are saying that the price reduction/demand issues is mostly because of the issues they had with their battery. Unfortunately for GM we are not in 2018/19. There is a lot more competition from other automakers + buyers can avail the tax rebate.

I look at this as a negative for GM. They are struggling to make EVs and now they also have to compete on pricing.

I guess you could say it's good for EV's since it's a lower entry price point for some consumers. Issue is that GM isn't making enough of the Bolts to really move that needle at all.

As for GM, it's absolutely terrible news. No way to sugarcoat that. And I would predict that GM is intentionally going to limit production of the Bolt to minimize the impacts of earnings/margins. In fact, I'd wager that it's just a public image stunt to say they're committed to EV's and making the effort.

GM - "See we're committed! We have the lowest priced EV on the market!!"

GM Bolt production - maybe 1,000-2,000 per month......if that

The good thing for GM about Bolts is it shows they are confident in the issues being behind the car and can sell in volume. The obvious downside is they have to undercut the market to get any sales.

I think quite the opposite actually. This is just a publicity stunt to say they're making the effort. Their loss per car at these prices would be way too high for them to survive making the Bolt in mass volume.

 

[Accident]

This delivery date update, which shifts everything out by one month, comes about one month after the last delivery date update (May 3rd). So if nothing else, it appears that the US backlog is no longer growing, but nor has it shrunk either. Caveat being that this data is very murky, but is nevertheless pretty much the only visibility we have into Tesla's order book (other than time elapsed from ordering to delivery for customers).

https://twitter.com/x/status/1532030606686801920

I am certain that Tesla (and therefore Elon) have tremendously granular visibility into their order flow, and can likely know whether there have been any repercussions with regard to orders due to Elon's increased political visibility.

So this is not because Tesla is disrupted by their China operation and delays in production and components?

Can someone please explain what a backlog is to Reuters?

Tesla delays deliveries of long-range models in U.S.

Tesla Inc is delaying U.S. deliveries of certain long-range models by up to a month, its website showed on Wednesday, as the electric-car maker tries to steer itself through supply-chain issues and disruptions in China operations.

www.reuters.com

 

[henchman24]

I think quite the opposite actually. This is just a publicity stunt to say they're making the effort. Their loss per car at these prices would be way too high for them to survive making the Bolt in mass volume.

The Bolt name is tainted at this point, they know it will just have to be a loss leader until they can get the other models spun up. Get some people in now to show they can make a 'good' () product to setup for sales of a different model in 23 or 24.

 

[Ogre]

The Bolt name is tainted at this point, they know it will just have to be a loss leader until they can get the other models spun up. Get some people in now to show they can make a 'good' () product to setup for sales of a different model in 23 or 24.

Seems like a weird attempt to rebuild the brand.

Regardless, my daughter needs a car and I'd like to get her in an EV. This is very tempting.

 

[StarFoxisDown!]

The Bolt name is tainted at this point, they know it will just have to be a loss leader until they can get the other models spun up. Get some people in now to show they can make a 'good' () product to setup for sales of a different model in 23 or 24.

But again, even if that is the strategy.............Try to show people they Bolt is good in an effort to drive 2023/2024 sales, they're still going to greatly limit how much production they actually can make at those prices.

It's simple numbers/math. They're taking a substantial lose per vehicle at those prices. They can't afford to make that many of them at those prices.

 

[thesmokingman]

Seems like a weird attempt to rebuild the brand.

Regardless, my daughter needs a car and I'd like to get her in an EV. This is very tempting.

What else can they do when you can't even park one inside?

 

[bkp_duke]

You made the point that the engineers need to be close to the problem they are trying to solve. If the engineer is in say Tesla California where he/she has worked on issues in Fremont, but now the issues are no longer in Fremont and now in Texas. Do you make the person move to Texas?

WHO CARES?

Seriously, if the employee has to move and doesn't want to . . . they can find another job. It's not exactly a slow job market right now. And even if it was, too bad.

What is with all the mamby pamby hand holding and coddling (in general)? The employer sets the conditions for the job (within legal limits) and if the employee doesn't like it, they can take a hike.


No wonder Elon made the comment he did about the Chinese work ethic being so much higher than that in America.

 

[henchman24]

Seems like a weird attempt to rebuild the brand.

Regardless, my daughter needs a car and I'd like to get her in an EV. This is very tempting.

It allows them to recover some of the costs and hopefully get some people to stick with GM.

But again, even if that is the strategy.............Try to show people they Bolt is good in an effort to drive 2023/2024 sales, they're still going to greatly limit how much production they actually can make at those prices.

It's simple numbers/math. They're taking a substantial lose per vehicle at those prices. They can't afford to make that many of them at those prices.

GM can lose plenty of money on the Bolts they actually sell and still survive. They could sell 200k a year and lose 10k per... still only burn through 2b. And we can be pretty sure that they aren't losing 10k per even with the price cut. They have 30b cash on hand, 7b FCF (though this year will probably be closer to 6b) and other models to cover up the loss. Plenty of time and if they can get 50k of those to be conquests down the line, that will be the best 2b marketing they could spend on their EVs. Right now they just have to allow the Bolt to be a loss leader and try to gain some conquests before they can introduce a new model.

 

[thx1139]

WHO CARES?

Seriously, if the employee has to move and don't want to . . . they can find another job. It's not exactly a slow job market right now. And even if it was, too bad.

What is with all the mamby pamby hand holding and coddling (in general)? The employer sets the conditions for the job (within legal limits) and if the employee doesn't like it, they can take a hike.


No wonder Elon made the comment he did about the Chinese work ethic being so much higher than that in America.

Law of unintended consequences. You really dont mind if Sam leaves and you make a rules change that causes a star like Suzy to leave. If you want to trim off the lower performing workers then you trim off the lower performing workers. Once was in a national meeting and our lawyer said something to "What is it with these workers (Software Engineers) they should be happy to have jobs." Needless to say us people that had to hire and keep good quality software engineers thought he was nuts. I treated my engineers really well in Chicago and I had the lowest attrition rate of any GM in the country. Yeah I babied them more, but I believed you squeeze pennies and quarters slip through your fingers. Basically I listened and cared about my people.

 

[bkp_duke]

Law of unintended consequences. You really dont mind if Sam leaves and you make a rules change that causes a star like Suzy to leave. If you want to trim off the lower performing workers then you trim off the lower performing workers. Once was in a national meeting and our lawyer said something to "What is it with these workers (Software Engineers) they should be happy to have jobs." Needless to say us people that had to hire and keep good quality software engineers thought he was nuts.

Have you SEEN the college surveys? Tesla and SpaceX literally get their pick of the litter over everyone, EVERYONE else. If a few top engineers don't want to drive into work, they can go work elsewhere, and Elon knowns that. Good for him. There is nothing illegal about what he's doing.

I run a business that needs software engineers and system administrators, and WFH is an absolutely killer for productivity. KILLER. I have to employee a dedicated person just to keep tabs on people's productivity. I've fired people so many times for trying to repeatedly sneak out and go do X, Y, or Z without giving proper notice.

 

[AndrewZ]

I wouldn't be surprised to see more manufacturers pump out vehicles at a loss to undercut Tesla and each other

Rivian's R1T and R1S were massively underpriced early on for what they were. GM now with the Bolt and the F-150 Pro starting price seems impossibly low in terms of turning a profit. Competitors will look to saturate the market as much as possible.


Great for consumers and great for the quest to reduce emissions, the beauty of competition

 

[StarFoxisDown!]

It allows them to recover some of the costs and hopefully get some people to stick with GM.



GM can lose plenty of money on the Bolts they actually sell and still survive. They could sell 200k a year and lose 10k per... still only burn through 2b. And we can be pretty sure that they aren't losing 10k per even with the price cut. They have 30b cash on hand, 7b FCF (though this year will probably be closer to 6b) and other models to cover up the loss. Plenty of time and if they can get 50k of those to be conquests down the line, that will be the best 2b marketing they could spend on their EVs. Right now they just have to allow the Bolt to be a loss leader and try to gain some conquests before they can introduce a new model.

GM, along with every other legacy auto maker is living in a bubble right now and surviving off of high ASP. As long term high gas prices set it, you're talking permanent demand destruction and that bubble bursting. Maybe by end of 2022, likely be mid 2023. Tesla is getting ready for another step in production along with Cybertruck coming into the spotlight.

Material demand destruction on all ICE vehicles will happen in 2023 which will rug being pulled out from legacy auto. GM cannot afford to take a 2 billion loss on Bolt's just to sell 200,000 of them. And yes, at these prices, GM is definitely losing in the neighborhood of $8,000-10,000 on each vehicle sold.

I wouldn't be surprised to see more manufacturers pump out vehicles at a loss to undercut Tesla and each other

Rivian's R1T and R1S were massively underpriced early on for what they were. GM now with the Bolt and the F-150 Pro starting price seems impossibly low in terms of turning a profit. Competitors will look to saturate the market as much as possible.


Great for consumers and great for the quest to reduce emissions, the beauty of competition

Big issue with this thought process and the reason why it won't happen. Undercutting competition works if you have the higher production capacity, or at least on par with your competition AND you have the margin buffer to take it on.

Legacy auto and newbie EV makers have neither of these things. Tesla has both of them. Legacy auto is burdened by their legacy business which will exponentially hurt their profitability as the ICE market starts collapsing. Legacy auto and EV startups will not be undercutting Tesla on anything that is in mass production volume.

 

[bkp_duke]

Oh lookey what the hedgies have managed to do . . . manufacture a drop in TSLA when the market is now flat, despite us opening up when the market was up.

 

[MP3Mike]

GM can lose plenty of money on the Bolts they actually sell and still survive. They could sell 200k a year and lose 10k per... still only burn through 2b. And we can be pretty sure that they aren't losing 10k per even with the price cut.

Material demand destruction on all ICE vehicles will happen in 2023 which will rug being pulled out from legacy auto. GM cannot afford to take a 2 billion loss on Bolt's just to sell 200,000 of them. And yes, at these prices, GM is definitely losing in the neighborhood of $8,000-10,000 on each vehicle sold.

Weren't the ZEV mandates/fuel economy standards upheld/raised recently? Every EV an ICE OEM sells is fewer ZEV credits that they need to buy from someone else, i.e. Tesla. So while they might lose $10k on the vehicle sale, they gain, I think, $10k worth of credits so they can continue to sell gas guzzling ICE vehicles.

 

[Usain]

What else can they do when you can't even park one inside?

I drove my Bolt for 4 years and 110,000 miles. Then GM gave me a new battery for free. Also, my Bolt now has a range of 259 miles instead of the original 238.

The inconvenience of parking outside the garage for a few months was worth it!

 

[bballshinobi]

Don't exclude accountants. One time I took a break from my desk and went for a stroll onto the factory floor and noticed something. That walk led to an innovative mfg process which one year later saved the company $12m. No joke. . . .true story. If I had not had the opportunity that day to interact with the production workers on the line . . .I am not sure if we would ever have found that $12m savings.

You fired all the workers who tried to unionize and replaced them with robots?

 

[Krugerrand]

You made the point that the engineers need to be close to the problem they are trying to solve. If the engineer is in say Tesla California where he/she has worked on issues in Fremont, but now the issues are no longer in Fremont and now in Texas. Do you make the person move to Texas?

Gosh, I might first start by flying someone to Austin to fix the problem and teach the workers there. Additionally, I might send out a company wide email asking employees broadly if any of them would like to move temporarily or permanently to Austin to get that factory up and running.

Honestly, I don’t understand your narrow focus. Can you not see there are a lot of options available? Don’t get caught up in what seems a limitation for employees on the surface. Everyone has a choice and if Elon sees a mass exodus because of this request, he’ll reevaluate the importance of it.