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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Always so entertaining to watch the macros on days like this. It’s like dealing with someone with split personality disorder
Keep quiet, this sort of thing usually ends poorly.
No. Be louder .. i got some -315c open for this week as insurance
ok ok .. i go to the other thread again
Then we can eat some Pi...!
thesmokingman
Active Member
Damn, everything's going green. This is a rare instance when the monotone didn't tank everything.
If I remember right, last time there was a big rally after the announcement and speech, and then a major tank the next day when supposedly the reality of a Fed-induced recession set in. So maybe don't count chickens until tomorrow, though it's hard to imagine anybody who hasn't considered a Fed-induced recession yet.
Knightshade
Well-Known Member
How many times folks gotta debunk this 10% nonsense? There's no such requirement in any of their rules so there's nothing to "vote" on... They kinda sorta unofficially tried to stick to roughly that number, but were never required to, and often hit a bit higher than that in several companies (including Tesla)....
Even the ACTUAL much higher limit they DID have was removed last year.
Disclosures show Ark has removed limits on company ownership
Previously the ETFs could invest only up to 30% of their assets in a single company amounting to no more than 20% of its outstanding shares
www.ft.com
ARKs stuff continues to look like funds that just got really lucky with Tesla being among all their other otherwise terrible picks and otherwise falls right into Warrens theory of managed funds don't beat S&P index funds over any long period of time.
MartinAustin
Active Member
Minor FYI not stock-related (except insofar as the stock has not been hurt )
Base Model S top speed in USA reduced from 155mph to 149mph.
)Base Model S top speed in USA reduced from 155mph to 149mph.
Jay Leno talking about Elon now:
Reminder the episode of Jay Leno’s garage with Elon is tonight.
Don’t think there will be new information but would help correct some people’s perception of Elon.
Don’t think there will be new information but would help correct some people’s perception of Elon.
StealthP3D
Well-Known Member
I just assumed the new tent was going to be an expanded Human Resources Center so production line employees didn't have to wait in long lines to report instances of harassment and everyone could finally get along like they do at non-Musk companies.
/s
TheTalkingMule
Distributed Energy Enthusiast
.75 is perfectly fine, but I'm not in love with this projected path(.75/.50/.25) and potential for it to end up in deflation. BUT I think their current position is valid and articulated very well in this meeting. Nice and balanced while still swinging the hammer very hard.
Economically I think the US is setup a lot better than people realize for the next 12 months. Our legacy energy sector is absolutely spewing money all over our economy. And when they slow....that's stimulative for the demand side of the country.
If we're this safe/stable, and I think we are.......why not pop rates again and try to crush this thing now?
The rest of the world may however be F'ed. Then the question becomes....will that eventually leech right back to us?
Economically I think the US is setup a lot better than people realize for the next 12 months. Our legacy energy sector is absolutely spewing money all over our economy. And when they slow....that's stimulative for the demand side of the country.
If we're this safe/stable, and I think we are.......why not pop rates again and try to crush this thing now?
The rest of the world may however be F'ed. Then the question becomes....will that eventually leech right back to us?
Gigapress
Trying to be less wrong
Stunning CapEx Efficiency
Tesla has spent cumulatively $12.7B on capital expenditures since Q2 2020 when Gigas Berlin and Texas began construction. There has also been investment in Shanghai and Fremont as well as other capital expenditures not related to vehicle capacity expansion, so this is an upper bound for how much the new factories cost.
These initial phases of capacity in Berlin and Austin should be able to yield around 500k cars per year each, or 1M combined. Thus, we can roughly estimate that Tesla can expand production capacity for at most $12.7B / 1M cars/yr = $12.7k per car of annual capacity.
In H1 '22 Tesla earned $9.62B auto gross profit off of 565k deliveries, for a global average of $17k gross profit per car.
Neglecting time-value of money effects to keep this estimation simple, this means Tesla is getting roughly (17-12.7)/12.7 = 30% return on investment just in the first year of factory operation. In other words, the factory pays for itself within less than a year of volume production plus a 30% bonus and then every year thereafter is just gravy.
If we model the factory as lasting 10 years before needing new investment, the cashflows look something approximately like this, and the internal rate of return for the project is a whopping 92%!!
But wait! This was with excessively conservative estimates. Berlin and Austin definitely didn't cost $6.3B each because Tesla also spent a large portion of their CapEx budget on Shanghai, Lathrop, R&D, Berlin/Texas future production, Superchargers, and more. So let's say these factories actually cost closer to $4B each (or $8B combined) for that 1M/year capacity. Now the estimate is $8k investment per car/year.
Also, the new factories are going to earn much more than $17k per car. I think Berlin and Austin will earn closer to $25k per car on average. Now we can estimate that the factories will have paid for themselves 3x over in the first year of volume production, and shockingly the IRR is 169%.
169% compound annualized return on investment. WTF.
The ROI is so absurdly high I don't actually even need to model for 10 years of cashflows, because almost all of the IRR is coming from the first two years of volume production. If you could invest $1k in a security at this rate of ROI, then after 10 years you'd have $20 million. Wow.
I can't estimate this precisely, but with such an extreme result it doesn't even matter for practical purposes. I don't know of any other business in any industry that can generate returns like this, let alone with investments carrying such low risk. It's not like this is some speculative venture that we hope will work, like we might see in biotech or pharmaceuticals. This is just for building out more Model Y production facilities.
Tesla has spent cumulatively $12.7B on capital expenditures since Q2 2020 when Gigas Berlin and Texas began construction. There has also been investment in Shanghai and Fremont as well as other capital expenditures not related to vehicle capacity expansion, so this is an upper bound for how much the new factories cost.
| Q2 2020 | $ 546 |
| Q3 2020 | $ 1,005 |
| Q4 2020 | $ 1,151 |
| Q1 2021 | $ 1,348 |
| Q2 2021 | $ 1,505 |
| Q3 2021 | $ 1,819 |
| Q4 2021 | $ 1,810 |
| Q1 2022 | $ 1,767 |
| Q2 2022 | $ 1,730 |
These initial phases of capacity in Berlin and Austin should be able to yield around 500k cars per year each, or 1M combined. Thus, we can roughly estimate that Tesla can expand production capacity for at most $12.7B / 1M cars/yr = $12.7k per car of annual capacity.
In H1 '22 Tesla earned $9.62B auto gross profit off of 565k deliveries, for a global average of $17k gross profit per car.
Neglecting time-value of money effects to keep this estimation simple, this means Tesla is getting roughly (17-12.7)/12.7 = 30% return on investment just in the first year of factory operation. In other words, the factory pays for itself within less than a year of volume production plus a 30% bonus and then every year thereafter is just gravy.
If we model the factory as lasting 10 years before needing new investment, the cashflows look something approximately like this, and the internal rate of return for the project is a whopping 92%!!
| Year | Cash Flow | IRR |
| 1 | -6.35 | 92% |
| 2 | -6.35 | |
| 3 | 17 | |
| 4 | 17 | |
| 5 | 17 | |
| 6 | 17 | |
| 7 | 17 | |
| 8 | 17 | |
| 9 | 17 | |
| 10 | 17 | |
| 11 | 17 | |
| 12 | 17 |
But wait! This was with excessively conservative estimates. Berlin and Austin definitely didn't cost $6.3B each because Tesla also spent a large portion of their CapEx budget on Shanghai, Lathrop, R&D, Berlin/Texas future production, Superchargers, and more. So let's say these factories actually cost closer to $4B each (or $8B combined) for that 1M/year capacity. Now the estimate is $8k investment per car/year.
Also, the new factories are going to earn much more than $17k per car. I think Berlin and Austin will earn closer to $25k per car on average. Now we can estimate that the factories will have paid for themselves 3x over in the first year of volume production, and shockingly the IRR is 169%.
| Year | Cash Flow | IRR |
| 1 | -4 | 169% |
| 2 | -4 | |
| 3 | 25 | |
| 4 | 25 | |
| 5 | 25 | |
| 6 | 25 | |
| 7 | 25 | |
| 8 | 25 | |
| 9 | 25 | |
| 10 | 25 | |
| 11 | 25 | |
| 12 | 25 |
169% compound annualized return on investment. WTF.
The ROI is so absurdly high I don't actually even need to model for 10 years of cashflows, because almost all of the IRR is coming from the first two years of volume production. If you could invest $1k in a security at this rate of ROI, then after 10 years you'd have $20 million. Wow.
I can't estimate this precisely, but with such an extreme result it doesn't even matter for practical purposes. I don't know of any other business in any industry that can generate returns like this, let alone with investments carrying such low risk. It's not like this is some speculative venture that we hope will work, like we might see in biotech or pharmaceuticals. This is just for building out more Model Y production facilities.
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Yep, the future financials for Tesla look incredibly positive. I think it has the potential to be the strongest business financially in the S&P a few years from now.
He is a SCUMBAG.The original Tweet ended with:
“Self-made billionaires” are a myth.
That was said by Robert Reich to reinforce the idea that Elon had his wealth given to him due to some amazing asset owned by his father. The insinuation and how the Tweet ended couldn't have been clearer. So this is misleading and part of it is flat out incorrect, so I agree that Robert Reich is an idiot and a liar.
@Gigapress Another great analysis! I wish your postings were required reading for WS analysts... the SP would be over Mars by now and rightly so.
Basically this guy wants to close his eyes to all the plain facts that are in front of everyone, but instead focus on a point that is tangential exaggeration and obfuscation, and somehow reiterate that is the truth and the only truth. I ahve seen these types. They achieve nothing in life, except keep throwing stones and accusations at others who actually do get things done.
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Yikes. That’s just sad.
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