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

[MC3OZ]

Note I didn't say people will not embrace robotaxi. My question is will people embrace it enough and fast enough to generate revenue and positive margins before these companies call it quit?

Air travel solved huge problems such as traveling long distances like across water without taking a few months and risk of dying at sea. People were willing to take the risk. Are people eager to take the risk in a robotaxi so they can relax for 20 minutes beside driving on their own? Sure..oh wait uber already provide this service. So now its matter of price and where the risk and reward cross.

It's an uphill battle and these companies chasing robotaxis like it's the next California gold rush will just accelerate their bankruptcy. The operating cost is currently astronomical!

I factor in Tesla having a low fleet cost, a combination of off-lease Model 3/Y/S/X and a new Robotaxi which is hopefully economic.

Tesla is absorbing all of the costs of the software development now, and installing hardware in cars now, while still being profitable,

There are other issues like cleaning and charging to solve, but I suspect Optimus might be prepared to "work from home" on those tasks.

For other solutions, with high development costs to date, and a high fleet cost, issues with charging, insurance and cleaning to resolve, I tend to agree, not everyone finds gold.

I'm sure many aged over 25 might initially prefer an Uber, but if a Robotaxi is cheaper, many will be prepared to try it.

 

[Big Time]

Just picked up my Model X my wife's model X LR (joining our Y). She's very happy with it.

View attachment 852818

Congrats to the both of you!

 

[Discoducky]

All this hoopla about self driving robotaxis being the nirvana of insane margins and revenue is all a farce.

The main/primary purpose of robotaxi is not and will not ever be to increase margin. It will be solely to fully realize sustainable transportation. Once FSD is solved *enough* to enable fleets of Tesla's to give rides for a low cost, the cost will be lowered so that no one will ever *need* to travel via petroleum.

 

[Discoducky]

Also, 10.69.2 did a u-turn tonight and did it well! Both me and my 9 year old were amazed!

 

[wipster]

Too fudging cool!

 

[Gigapress]

All this hoopla about self driving robotaxis being the nirvana of insane margins and revenue is all a farce. I said it before and I'll say it again. The robotaxi market today is a money loser and will be until the public gains the trust of the system. IMO the only way to do this is for people to have autonomous driving in their car so reliable that they begin to sleep in their own cars while driving. Only until then they will consider not purchasing their next car and just strictly use the robotaxi service.

I still believe only Tesla is doing it right by giving the masses this technology so people can slowly get use to them and gain that trust that's badly needed to generate revenue. This will take years to change people's psychology and many years in a Tesla or Tesla like system once it reaches at least level 3 in which Tesla is comfortable enough to take responsibility for any crash.

Survey shows Americans don't trust self-driving cars. They also don't know you can't buy one.

A study showed 76 percent of Americans feel less safe in a self-driving car, while 73 percent feel less safe knowing other cars may be self-driving.

www.teslarati.com

Do you have math to back this up?

Uber currently runs an approximately breakeven operation. Tesla robotaxis would have many cost benefits relative to Uber such that the operating margin shoots to like 50% or more:

• No driver pay, which is about half of Uber's cost structure. This alone is a game-changer.
• EV operation and maintenance expenses are less than gasoline O&M expenses, enhanced by software being able to optimize for efficiency better than humans can.
• Lower initial hardware cost due to elimination of stuff like steering wheels and pedals and also due to Tesla's dominance at manufacturing.
• LFP battery packs that last for thousands of cycles.
• Lower sales and marketing expenses, which ate up 17% of Uber's revenue in the first half of 2022.
• Better safety, reducing insurance costs. Tesla could even self-insure.

Although Uber does benefit from their drivers underestimating the true total cost of owning and operating their vehicles, the fact remains that simply charging the same price for trips without paying for driver expenses completely changes the model from breakeven to 30-50% gross margin. The only way Tesla robotaxis would not make money would be if they can't get the same fares and vehicle utilization as Uber does today.

https://investor.uber.com/news-even...-Results-for-Second-Quarter-2022/default.aspx

Secondly, it is irrelevant whether robotaxi customers own cars in the early days. What matters is total aggregate demand for robotaxi trips, even if all robotaxi users only ride occasionally. People travel, get drunk and don't want to drive home, etc. Robotaxis would serve the current market for taxis, rideshare, rental cars, and public mass transit. How many people riding the bus or train right now would gladly take a robotaxi if it had a similar price?

Also, investors need to be looking to the youth.

• Even in the United States, the most car-centric major country on the planet with the worst mass transit options, the percentage of young people who own cars or even have driver licenses has been dropping for decades. The majority still drive, but the minority of those who don't includes millions of people and this demographic is more than big enough to start an American robotaxi network consumer base. The majority of American kids who are under 18 don't have licenses. Teenagers generally they feel embarrassed to be around their parents in public, and don't want to have to ask for a ride to go out and socialize, plus the kids under 16 aren't even eligible to drive if they wanted to.

• Parents are tired (literally) of driving their kids all around town to activities, and robotaxis would be a major relief of time and stress.

• Affordability of car ownership is a major barrier for young people because they tend not to have much money and they have to pay very high insurance rates. College students especially tend to have difficulty because they aren't earning income from full-time work and have student loans accumulating, yet they tend to spend most of their time within walking or biking distance of where they sleep. I think they will love robotaxis, just as we loved Uber coming onto the scene around 2013 when I was in school. At my school it took only one year for everyone to abandon taxis in favor of Uber and Lyft.

• Young people also have radically different psychology when it comes to taking perceived risks and trying new things. During this life stage before the brain has fully matured around age 25 (particularly the prefrontal cortex), people are more motivated by being cool and accepted amongst their peers than by fear of danger or new technology. I anticipate that riding in robotaxis will be considered cool.

Infographic: Americans Get Driver's Licenses Later in Life

This chart shows the percentage of the U.S. population holding a driver's license, by age group (1983, 2008, 2018).

www.statista.com

 

[pitabun]

Do you have math to back this up?

Uber currently runs an approximately breakeven operation with about half of their cost structure being driver pay. Uber does benefit from their drivers underestimating the true total cost of owning and operating their vehicles, but the fact remains that simply charging the same price for trips without paying for driver expenses completely changes the model from breakeven to 30-50% gross margin. Tesla robotaxis will also have lower long-term average hardware cost and energy cost than Ubers, because it'll be an EV powertrain, with less complexity for stuff like steering wheels and pedals, and they'll have LFP battery packs that last for thousands of cycles. The only way Tesla robotaxis would not make money would be if they can't get the same fares and vehicle utilization as Uber does today.

Secondly, it is irrelevant whether robotaxi customers own cars in the early days. What matters is total aggregate demand for robotaxi trips, even if all robotaxi users only ride occasionally. People travel, get drunk and don't want to drive home, etc. Robotaxis would serve the current market for taxis, rideshare, rental cars, and public mass transit. How many people riding the bus or train right now would gladly take a robotaxi if it had a similar price?

Also, investors need to be looking to the youth. Even in the United States, the most car-centric major country on the planet with the worst mass transit options, the percentage of young people who own cars or even have driver licenses has been dropping for decades. The majority still drive, but the minority of those who don't includes millions of people and this demographic is more than big enough to start an American robotaxi network consumer base. Young drivers also tend to have trouble affording a car because they don't have much money and they have to pay very high insurance rates. College students especially tend to have difficulty because they aren't earning income from full-time work and have student loans accumulating, yet they tend to spend most of their time within walking or biking distance of where they sleep. I think they will love robotaxis, just as we loved Uber coming onto the scene around 2013 when I was in school. Young people also have radically different psychology when it comes to taking perceived risks and trying new things. During this life stage before the brain has fully matured around age 25, people are more motivated by being cool and accepted amongst their peers than by fear of danger or new technology. I anticipate that riding in robotaxis will be considered cool.

View attachment 853008

Infographic: Americans Get Driver's Licenses Later in Life

This chart shows the percentage of the U.S. population holding a driver's license, by age group (1983, 2008, 2018).

www.statista.com

Am I drunk, or does this graph not make any sense? None of the values add up to 100%.

 

[Gigapress]

Am I drunk, or does this graph not make any sense? None of the values add up to 100%.

The values are showing the percentage of people in each age demographic who have driver's licenses. Per this data, only a quarter of 16-year-old Americans had licenses in 2018, 61% of 18-year-olds, etc. What this shows is that over time, more and more Americans are holding off until later in life to start driving a car.

 

[MC3OZ]

The values are showing the percentage of people in each age demographic who have driver's licenses. Per this data, only a quarter of 16-year-old Americans had licenses in 2018, 61% of 18-year-olds, etc. What this shows is that over time, more and more Americans are holding off until later in life to start driving a car.

Potential Robotaxi customers also include those too young to have a license, those unable to obtain a licence for reasons of medical history, or driving history, and those with a disability that prevents them from driving, etc,

I certainly see customers starting to use Robotaxis around age 14, I would not be surprised if age 12 or even age 10 use the service, anyone old enough to catch a bus, can use a Robotaxi.

And in many cases I think many parents will prefer their kids use a Robotaxi, especially when travelling at night.

 

[Singuy]

Do you have math to back this up?

Uber currently runs an approximately breakeven operation. Tesla robotaxis would have many cost benefits relative to Uber such that the operating margin shoots to like 50% or more:

• No driver pay, which is about half of Uber's cost structure. This alone is a game-changer.
• EV operation and maintenance expenses are less than gasoline O&M expenses, enhanced by software being able to optimize for efficiency better than humans can.
• Lower initial hardware cost due to elimination of stuff like steering wheels and pedals and also due to Tesla's dominance at manufacturing.
• LFP battery packs that last for thousands of cycles.
• Lower sales and marketing expenses, which ate up 17% of Uber's revenue in the first half of 2022.
• Better safety, reducing insurance costs. Tesla could even self-insure.

Although Uber does benefit from their drivers underestimating the true total cost of owning and operating their vehicles, the fact remains that simply charging the same price for trips without paying for driver expenses completely changes the model from breakeven to 30-50% gross margin. The only way Tesla robotaxis would not make money would be if they can't get the same fares and vehicle utilization as Uber does today.

https://investor.uber.com/news-even...-Results-for-Second-Quarter-2022/default.aspx

Secondly, it is irrelevant whether robotaxi customers own cars in the early days. What matters is total aggregate demand for robotaxi trips, even if all robotaxi users only ride occasionally. People travel, get drunk and don't want to drive home, etc. Robotaxis would serve the current market for taxis, rideshare, rental cars, and public mass transit. How many people riding the bus or train right now would gladly take a robotaxi if it had a similar price?

Also, investors need to be looking to the youth.

• Even in the United States, the most car-centric major country on the planet with the worst mass transit options, the percentage of young people who own cars or even have driver licenses has been dropping for decades. The majority still drive, but the minority of those who don't includes millions of people and this demographic is more than big enough to start an American robotaxi network consumer base.

• Young drivers also tend to have trouble affording a car because they don't have much money and they have to pay very high insurance rates. College students especially tend to have difficulty because they aren't earning income from full-time work and have student loans accumulating, yet they tend to spend most of their time within walking or biking distance of where they sleep. I think they will love robotaxis, just as we loved Uber coming onto the scene around 2013 when I was in school. And what about high schoolers? Generally they feel embarrassed to be around their parents in public, and don't want to have to ask for a ride. The kids under 16 aren't even eligible to drive yet, but they want to go out. The majority of American kids who are under 18 don't have licenses.

• Young people also have radically different psychology when it comes to taking perceived risks and trying new things. During this life stage before the brain has fully matured around age 25 (particularly the prefrontal cortex), people are more motivated by being cool and accepted amongst their peers than by fear of danger or new technology. I anticipate that riding in robotaxis will be considered cool.

View attachment 853008

Infographic: Americans Get Driver's Licenses Later in Life

This chart shows the percentage of the U.S. population holding a driver's license, by age group (1983, 2008, 2018).

www.statista.com

Yes I did the math and currently Cruise and Waymo are nothing but money pits for their parent companies.

They will both continue to be money pits for their parent companies because

1. There are no demand for robotaxies today even in cities with robotaxies

2. They are not useful due to low numbers and limited routes/time of operation

3. As they expand to other cities, they will continue to lose massive amounts of money because the city they were in prior were not even close to being profitable.

4. I am not even talking about Tesla. I was saying how Tesla is working on trust and scalability while being profitable with their autonomous program without any L4s on the road. Other companies may go under BEFORE people find robotaxies acceptable as a useful tool in their lives. It only took uber over a decade and good saturation to be cash flow positive. Will GM allow Cruise to continue to suck their profits away for another decade in order to hit profitability?

I was making a point that all of these (NON TESLA) companies thinking robotaxis are the new gold rush is hitting nothing but a big bear trap.

 

[Gigapress]

Yes I did the math and currently Cruise and Waymo are nothing but money pits for their parent companies.

They will both continue to be money pits for their parent companies because

1. There are no demand for robotaxies today even in cities with robotaxies

2. They are not useful due to low numbers and limited routes/time of operation

3. As they expand to other cities, they will continue to lose massive amounts of money because the city they were in prior were not even close to being profitable.

4. I am not even talking about Tesla. I was saying how Tesla is working on trust and scalability while being profitable with their autonomous program without any L4s on the road. Other companies may go under BEFORE people find robotaxies acceptable as a useful tool in their lives. It only took uber over a decade and good saturation to be cash flow positive. Will GM allow Cruise to continue to suck their profits away for another decade in order to hit profitability?

I was making a point that all of these (NON TESLA) companies thinking robotaxis are the new gold rush is hitting nothing but a big bear trap.

Ah, this makes more sense. I misunderstood. Yeah these other companies have serious challenges with their approaches to the market even if they somehow solve the technical aspects.

 

[Bet TSLA]

Well that’s just a load of hogwash. People have been saying for YEARS how much effort it saves them on road trips. How they arrive at their destinations far less tired and stressed.

And so you don’t think I’m simply repeating secondhand information, I’ve got over 85,000 miles on my car. The majority of those are long distance trip miles. AP has been an absolute godsend when doing mile after mile and hour after hour of traveling.

No, it can’t always navigate 12 lane road rage rush hour or a hairpin turn or a confusing construction zone with multiple temporary painted road markings no longer clearly defining the path forward. And sometimes it does get into the wrong lane or doesn’t drive as aggressively or defensively as I would in situations. It can’t read the minds of distracted drivers anymore than I can and sometimes it makes mistakes like everyone else does. And sometimes it even sees dead people, but I understand some humans claim that too. It also has occasionally appeared intuitive and saved my bacon or filled in when I wasn’t on top of my driving game.

Like so many times before, Tesla is held to some impossible standard that nobody else ever is. Nobody’s ever run an obscured stop sign before, huh? Or Chuck’s turn, where I imagine there’s been human accidents galore because it’s a stupid, dangerous, poorly thought out, engineered road situation. And you’ll definitely never see tire rubber on curbs in parking lots.

What a blessing it is to have such an immaculate driver as yourself testing this useless system that’s never driven a guy having a heart attack to emerg. Until it’s a perfect system, there’s not an ounce of good that can come of it.

‍ I’ve used it successfully on city streets at times as have others. I acknowledge that others have had issues, but so do a lot human drivers.

You seem to have gotten your tail in a twist over a bunch of things I never wrote. I was commenting on a post by a self-described "idiot" who was saying how amazingly wonderful FSD Beta had suddenly become for him. Not autopilot, not divided highways on long road trips: FSD Beta 10.69.2. And that it is now worth the ridiculous price Tesla is now charging, or even more, because wow!

And yeah, it's gotten a bit better, on the whole. Sadly it isn't anywhere close to autonomous, which means it isn't much use for all the use cases that would make it particularly valuable. That's undisputed. Sure, it's getting closer. And if you are willing to bet on the come, then maybe it's worth real money now. But so far, progress has been asymptomatically approaching better but not nearly good enough for autonomy, so I think not.

And while I'm sure you have "used it successfully on city streets at times", that doesn't mean it's anything but a novelty at this point. Successfully pretty much just means no interventions, not that you could pay no attention. You still had to remain attentive and you were responsible for any problems. So, it's fun if you like that sort of thing. But it's hardly worth real money.

What is worth something at this point is Navigate on Autopilot on highways. It consistently leads to less stress and better drives. This is (for me) mostly because I can pay much less detailed attention to what's going on, just monitor the big picture for unusual threats.

 

[jeewee3000]

You seem to have gotten your tail in a twist over a bunch of things I never wrote. I was commenting on a post by a self-described "idiot" who was saying how amazingly wonderful FSD Beta had suddenly become for him. Not autopilot, not divided highways on long road trips: FSD Beta 10.69.2. And that it is now worth the ridiculous price Tesla is now charging, or even more, because wow!

And yeah, it's gotten a bit better, on the whole. Sadly it isn't anywhere close to autonomous, which means it isn't much use for all the use cases that would make it particularly valuable. That's undisputed. Sure, it's getting closer. And if you are willing to bet on the come, then maybe it's worth real money now. But so far, progress has been asymptomatically approaching better but not nearly good enough for autonomy, so I think not.

And while I'm sure you have "used it successfully on city streets at times", that doesn't mean it's anything but a novelty at this point. Successfully pretty much just means no interventions, not that you could pay no attention. You still had to remain attentive and you were responsible for any problems. So, it's fun if you like that sort of thing. But it's hardly worth real money.

What is worth something at this point is Navigate on Autopilot on highways. It consistently leads to less stress and better drives. This is (for me) mostly because I can pay much less detailed attention to what's going on, just monitor the big picture for unusual threats.

@Krugerrand did not react to things you never wrote.

In your view FSD Beta 10.69.2 has little to no value ("it's hardly worth real money" - you).

The cat argues it does have value, first of all due to the driving experience becoming less tiring and second due to the future value of the (currently in the US) $15k option.
Your view of value is too narrow in my opinion. Nobody pays Tesla for 'only' 10.69.2 when purchasing FSD. They pay for current FSD and all the future updates.

If FSD becomes autonomous, then the right economic "value" is easily $200k, more like $500k.

Absurd calculation, you say?

The average annual rate of a private chauffeur is $52k:

Multiply that by the life span of the car (let's say 10 years to be conservative, it's more like 20 years from first owner to scrapping).
$52k x 10 years = $520k.

Your standards require autonomy or near close to autonomy for FSD being worth anything to a paying customer, which is quite a high bar. By then Tesla will charge closer to $50k-$100k for it, or provide only subscriptions. (Which will also increase in price, as Elon has hinted)

The current FSD deal is a major discount for what's coming, that's why the $15k is definitely warranted.

True, it puts some risk in the hands of the purchaser, since if Tesla can't solve autonomy then you only have the greatest driver assist system on the planet. But if it can, you lucked out on the purchase and could in theory just milk your FSD car with Tesla Network and buy a new Tesla vehicle (and more) with the proceeds. It's an aleatory contract so to speak, a contract where the outcome depends on a certain thing happening or not happening. (In this case Tesla solving autonomy) Of course it only makes sense to purchase FSD if you believe Tesla is on the right path and will get there soon-ish.

I get your point that you as an individual are not willing to spend $15k on the current tech, but your definition of value is way too narrow and only makes sense if you assume Tesla were never to update 10.69.2 again.

 

[Artful Dodger]

Side Note: I like that you have a sell order that is a fixed dollar amount (don't think you adjusted it after the split) which means it will never trigger

on Monday, February 4, 2030.​

FTFY. Paging @Unpilot

Cheers!

 

[Bet TSLA]

@Krugerrand did not react to things you never wrote.

In your view FSD Beta 10.69.2 has little to no value ("it's hardly worth real money" - you).

The cat argues it does have value, first of all due to the driving experience becoming less tiring and second due to the future value of the (currently in the US) $15k option.
Your view of value is too narrow in my opinion. Nobody pays Tesla for 'only' 10.69.2 when purchasing FSD. They pay for current FSD and all the future updates.

If FSD becomes autonomous, then the right economic "value" is easily $200k, more like $500k.

Absurd calculation, you say?

The average annual rate of a private chauffeur is $52k:

View attachment 853037

Multiply that by the life span of the car (let's say 10 years to be conservative, it's more like 20 years from first owner to scrapping).
$52k x 10 years = $520k.

Your standards require autonomy or near close to autonomy for FSD being worth anything to a paying customer, which is quite a high bar. By then Tesla will charge closer to $50k-$100k for it, or provide only subscriptions. (Which will also increase in price, as Elon has hinted)

The current FSD deal is a major discount for what's coming, that's why the $15k is definitely warranted.

True, it puts some risk in the hands of the purchaser, since if Tesla can't solve autonomy then you only have the greatest driver assist system on the planet. But if it can, you lucked out on the purchase and could in theory just milk your FSD car with Tesla Network and buy a new Tesla vehicle (and more) with the proceeds. It's an aleatory contract so to speak, a contract where the outcome depends on a certain thing happening or not happening. (In this case Tesla solving autonomy) Of course it only makes sense to purchase FSD if you believe Tesla is on the right path and will get there soon-ish.

I get your point that you as an individual are not willing to spend $15k on the current tech, but your definition of value is way too narrow and only makes sense if you assume Tesla were never to update 10.69.2 again.

I explicitly exclude betting on the come, which is pretty much all you are talking about. I've bet on the come three times now. On two of those bets I've had the cars for 4.7 years and gotten no return on my bet. The other is less than a year old. I have gotten a fair amount of entertainment from my bets, but little value. Certainly the value that I was hoping for, and that Elon keeps touting as coming real soon now, has not materialized.

I expect I'll buy FSD again, on the Cybertruck I have on order. If they honor the original price as they said they would. But no way will I pay the current FSD price for anything like what it is now.

As I said, autopilot on highways is definitely nice, but it has nothing to do with FSD Beta. And the safety is superb, but again...

 

[Artful Dodger]

Pretty good so far considering September is usually a crappy month.

When looking at historical monthly returns, September is not a very good month for the market as a whole.
But for Tesla, on average, September has been its best month.
Of course, past performance does not guarantee future results blah blah blah.

View attachment 848222

Crappy for the Market; not crappy for TSLA.

 

[lascavarian]

I suspect FedEx is going to be a topic of discussion Friday. This warning surfacing on a big options day. Then the suggestion that Tesla’s China sales approach is in need of a tuneup might be a good topic for contemplation.

Me, I just exercised some LEAPs and I’m glad to hear 69.2.1 is coming. Keep your hands on the wheel

 

[jw934]

But no way will I pay the current FSD price for anything like what it is now.

To avoid paying the "current price”, I ordered two MY LRs with FSD (CAN$12,800) just prior to the FSD price increase (to CAN$19,500) - one for my wife and one for my daughter.

Knowing that FSD will “one day” be capable of driving itself with no-one on board, and the possibility that Tesla may one day go with a pay-as-you-use model (like SuperCharging and Premium Connectivity) I would still buy it even at the current price, which works out to $90/month for 18 years which is how long I used my previous car.

But I gave your post an agree because if FSD remains like what it is now, I would not have bought FSD as both my wife and daughter refuse to turn on FSD when they drive my car.

 

[Thekiwi]

China wait times down to starting with “1 week” for the 3 & Y. Eg “1-4 weeks” for 3 & “1-8 weeks” for Y.

I would guess that is more about Tesla prioritizing new orders in or near Shanghai that can be delivered by quarter end (instead of delivering to older orders located too far away to be reached within 2 weeks).

But you can bet this will be reported as “demand drop” in China, Rather than the reality of end of quarter delivery optimization and large increase in production capacity.

 

[DragonWatch]

Forward Observing

Re: Robotaxis

No matter how you paint it, robotaxis will be the smartest advertising tool of any auto manufacturing company on the face of the world, bar none.

Ride one and order on line while you drive ride. Or, before you arrive at your destination.

Cheers