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

[Gigapress]

"Sunken Cost Fallacy" - a little out of touch perhaps? Not everyone on this site can contemplate financial theories or debate the best way to manufacture EV vehicles. Some just want to make a better living for themselves (and perhaps at the same time save the planet) by investing in a once in a generation company at a fortuitous point in time. Many of us on this board have $1 mil plus to "laugh off" days like this and harken back to other worse moments in TSLA history. Some, however, may have taken a leap of faith by investing $10,000, $20,000 or $100,000 when the stock price was $1,000 pre recent split. I don't take their financial pain lightly or point to theories I may have learned in grad school as mere talking points.

Sunk cost fallacy is not some useless academic theory that I brought up as a mere talking point. It is one of the most important things any investor--and even anyone aspiring to make more rational strategic decisions in general--should know to look out for, and even should actively train their brains to think about differently because it is not the default for human psychology.

By the way, we learned about this on literally my first day of economics class in undergrad. It's not an advanced concept; the hard part is actually applying the logic to real-world decisions when your mental heuristics, feelings and social environment want to dictate otherwise.

One of the best ways somebody can sabotage their owns plans to become a millionaire in the first place is to worry about these feelings and rashly act upon them instead of calming down and thinking things through.

Again: How do you specifically define "may not be able to ride out the current environment", and why would that condition be affected by the original purchase price of the investor's TSLA shares?

 

[Dutchie]

Just a warning; I will be critical this time. Just from the start, Tesla has done some amazing work with the launch of the Roadster, Model S/X and Model 3/Y. They executed Elon’s master plan almost flawlessly. I love the progress in battery technology and the building of new Giga factories. The implementation of new techniques like Giga casting and vertical integration is also very admirable. All this with great execution and growth. Love it!

That being said, Tesla has become bloated with ideas with nothing to show for lately:

• FSD. It is a long time coming and still not “finished” it is Beta and will be for the foreseeable future. At the presentation last Friday they showed the things they have done over the last year like the almost 76,000 models trained and the 35 new releases. It looks impressive. In another thread I asked if someone could tell me more about the real progress that has been made in the product; how much better is it than a year ago? Elon mentioned during the presentation that the real measure is the time between safety critical interventions in FSD Beta, however, he kept the data for himself. Why not put all your resources in that, get it out of Beta, get the Robotaxi rolling before starting an endeavour like Optimus?

• Talking about Beta, how many things in the software are still Beta (like the automatic windscreen wipers) why not finish that first?

• A few years back there was a nice presentation on solar roof. I get the idea that one is fizzling out. If that thing is still on the table, why not finish that first?

• Tesla Semi and Cybertruck, years late. Why not finish that before yet another endeavour like Optimus;

• same with new Roadster.

A lot of people are not taking Elon serious anymore (especially on Twitter). Tesla should start finishing products before starting new ones yet again.

 

[Gigapress]

I enjoy your posts. I think you need to revisit your 2023 ASP expectations though. The collapse in global currencies vs the US dollar I think means any large leap in non-US vehicle pricing is unlikely.

The most popular models being churned out of GigaShanghai now are priced under $40K USD.

For example here are the current prices we have down here in New Zealand:

Model Y RWD (SR): $37,768 USD
Model 3 RWD (SR): $37,124 USD

(Model Y: $76,200 NZD incl 15% sales tax. $66,260 NZD less sales tax. US dollar conversion rate 0.57c = $37,768 USD)
(Model 3: $74,900 NZD incl 15% sales tax. $65,130 NZD less sales tax. US dollar conversion rate 0.57c = $37,124 USD)

(note: NZ dollar briefly fell to USD 55c in past week, which meant for a brief moment there was a Model 3 available for ~$35k USD. The prophecy was fulfilled)

Hmm I didn't think of that. Some initial thoughts:

• US sales will likely be 35-40% of global deliveries next year so that helps mitigate this

• I think @unk45 has mentioned something about Tesla having some kind of obscure forex hedging in place, but I don't know the details on that

• I wonder if this will affect how Tesla chooses to allocate deliveries between different countries

• Most Tesla vehicles sold outside the US in 2023 will be made in Shanghai and Berlin with COGS paid for in Yuan and Euros, so USD exchange rates wouldn't impact gross margin much and then the profit will be converted to US$

 

[Silent Ludicrosy]

 

[Tony73]

Elon is entitled to his opinion on geopolitics.I just wish he would keep it off Twitter. What did he think was going to happen ?

 

[tslagreen]

Sunk cost fallacy is not some useless academic theory that I brought up as a mere talking point. It is one of the most important things any investor--and even anyone aspiring to make more rational strategic decisions in general--should know to look out for, and even should actively train their brains to think about differently because it is not the default for human psychology.

By the way, we learned about this on literally my first day of economics class in undergrad. It's not an advanced concept; the hard part is actually applying the logic to real-world decisions when your mental heuristics, feelings and social environment want to dictate otherwise.

One of the best ways somebody can sabotage their owns plans to become a millionaire in the first place is to worry about these feelings and rashly act upon them instead of calming down and thinking things through.

Again: How do you specifically define "may not be able to ride out the current environment", and why would that condition be affected by the original purchase price of the investor's TSLA shares?

Not going to argue with you. I think most people can envision several scenarios where one would not be able to ride out the current environment. Go Tesla!

 

[JRP3]

A lot of people are not taking Elon serious anymore (especially on Twitter).

They're taking him seriously right now...

 

[Xepa777]

Man…I remember the beginning of this day when I thought worst case scenario was happening with the share price and the constant bitching about delivery misunderstandings.

Can we fast forward to tomorrow?

 

[MC3OZ]

And while I agree with you, if the nuclear weapons deploy people will be wishing they could go back in time and make a different decision.

Ultimately it isn't a decision for us, or a Twitter poll, it is a decision for the Ukrainians themselves to make.

They fully understand Russia, the reality of nuclear weapons and the reality of living under Russian occupation. Faced with a choice between several bad alternatives, they have decided to continue liberating their territory.

I have no doubt Elon's intentions where good, but where Elon stays beyond science and engineering into social and political issues, there is a 50/50 chance that he will make his point in a clumsy way that will offend a lot of people, and will be counter-productive.

Actions speak louder than words, the good of providing Starlink to Ukraine far exceeds any damage done by this Twitter post.

 

[JRP3]

Elon getting some facts, maybe he'll read them.

https://twitter.com/x/status/1577013506485850112

 

[Silent Ludicrosy]

Ultimately it isn't a decision for us, or a Twitter poll, it is a decision for the Ukrainians themselves to make.

That was pretty much Elon’s point. Somehow it got twisted into “Elon supports Russia” by toxic Twitter.

 

[Big Dog]

Ultimately it isn't a decision for us, or a Twitter poll, it is a decision for the Ukrainians themselves to make.

Not really. Ukraine is propped up by the rest of the West. If the US & NATO choose to stop supplying arms to Ukraine, they can't hold out too long.

So Elon is trying to sway public opinion against the war to see if our politicians follow.

 

[ZeApelido]

Breaking News:

"The U.K. has declared they would like to poll white anglo-saxon U.S. citizens to determine if they should annex the U.S. back"

"China wants to poll Chinese living in Taiwan if they should be allowed to annex Taiwan"

"VW asks to poll German-speaking workers of Tesla if they can annex the EV leader"

"@ZeApelido asks to poll only TMCers who give him laugh reactions if he should become head TMC moderator"

 

[Ogre]

Tesla should start finishing products before starting new ones yet again.

You don't stop research and development because you have products which are in the middle of ramping to production.

Tesla hasn't announced/ launched a new product since the Cybertruck. They are continuing to develop other products, but that is what you do. One has nothing to do with the other. The resources on Optimus cannot be used to accelerate Cybertruck/ Roadster/ Semi production.

 

[Gigapress]

That being said, Tesla has become bloated with ideas with nothing to show for lately:

• FSD. It is a long time coming and still not “finished” it is Beta and will be for the foreseeable future. At the presentation last Friday they showed the things they have done over the last year like the almost 76,000 models trained and the 35 new releases. It looks impressive. In another thread I asked if someone could tell me more about the real progress that has been made in the product; how much better is it than a year ago? Elon mentioned during the presentation that the real measure is the time between safety critical interventions in FSD Beta, however, he kept the data for himself. Why not put all your resources in that, get it out of Beta, get the Robotaxi rolling before starting an endeavour like Optimus?

Musk companies have never waited until one thing is done and working before starting the next thing. That's a big reason why they progress so quickly.

Also we don't know what the limiting factor is on FSD progress. It's not necessarily the case that putting more resources on it will make the project go any faster, and as outsiders it's hard for us to assess what resource allocation tradeoffs there might be between FSD and Optimus. I trust Tesla is making good decisions in this area.

Talking about Beta, how many things in the software are still Beta (like the automatic windscreen wipers) why not finish that first?

1) it depends on the vision perception to work well, so it probably is riding the FSD improvement curve
2) it matters much less to accelerating the advent of road safety and sustainable energy than getting FSD working.

A few years back there was a nice presentation on solar roof. I get the idea that one is fizzling out. If that thing is still on the table, why not finish that first?

It's not fizzling out; it's incubating. Drew Baglino talked about this at the Stanford Fireside Chat earlier this year. Tesla learned that they messed up by underestimating the difficulty of dealing with the non-solar parts of the roof installation like flashings and working around obstructions like vents. The plan is to work on fixing those problems and keep improving the unit economics before scaling more. Also there's been huge increases in the price of a lot of raw materials going into solar cells in the last two years so now's not really the best time to try scaling this business segment.

Tesla is also now partnering with homebuilders like Brookfield to put Solar Roof on new homes, which is a lot easier and more cost-effective than retrofits.

Tesla partners with Brookfield, Dacra to establish first all-solar neighborhood in Austin

SunHouse at Easton Park is located in Southeast Austin.

communityimpact.com

Tesla Semi and Cybertruck, years late. Why not finish that before yet another endeavour like Optimus;

Late because:

1) Model 3 Production Hell
2) Demand for 3 & Y far exceeded expectations
3) Chips shortage and dodging COVID and logistics problems dominated concerns for the last two and a half years
4) Demand for Cybertruck far exceeded expectations and they probably needed to rethink the design and manufacturing engineering to make it suitable for higher production volumes

 

[GOVA]

Stalin. Lithuania, Estonia. Parts of Finland, Hungary...
For the brand Tesla in Europe, Musk need to be very very careful. A lot of these countries have fresh history being suppressed by the russians for decades until late 80ies, in the same way they try in Ukraine.
Musk's seemingly lack of historical understanding of what is going on is sad. A brand associated with pro russian politics is a disaster.

Well, hate to say it, but Gazprom has done quite well in all of the countries you mentioned and many more.

 

[Captkerosene]

Elon is entitled to his opinion on geopolitics.I just wish he would keep it off Twitter. What did he think was going to happen ?

He is hoping to stop a nuclear war by sacrificing his personal reputation in expressing a correct but unpopular opinion.

Elon is the leader the world needs. I have an even higher opinion of him now … and I did not think that was possible.

 

[Electroman]

He is hoping to stop a nuclear war by sacrificing his personal reputation in expressing a correct but unpopular opinion.

Elon is the leader the world needs. I have an even higher opinion of him now … and I did not think that was possible.

Spot On. Musk is laying out the bitter truth. It is up to the Americans and the west to realize this sooner than later and stop the bloodshed.

There is NO way Russia is giving up Crimea, Donbas or Donetsk regions, unless this turns into a WW3 scenario. Russia cannot defeat and annexe Ukraine. Ukraine even with the help of west cannot take back Crimea, Donbas and Donetsk, unless we are prepared for a largescale war in which China will also be pulled in. Are we ready for that?

 

[Singuy]

View attachment 859708

I will S my pants if Elon brings the two countries to the table and actually accomplish something. The result may even be a Nobel peace prize.

 

[Curt Renz]

Today Cathie Wood's ARKK bought 108,380 TSLA shares, while her ARKW bought 23,833 TSLA shares.