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

[Fact Checking]

Is there actually a different industry for EVs? I thought it was just one big thing called the car industry.

Like Blackberry and Apple was in this one big market called the "phone industry"? That's wrong, Apple created the new "smartphone industry", which was almost inaccessible to Blackberry - while Apple happily cannibalized Blackberry customers.

Likewise there's now an "ICE market" and a new "EV market", which is a one way street: the overwhelming majority of Tesla customers isn't looking back.

This is the catch-22 situation Blackberry BMW, GM and the other OEMs are finding themselves, trying to compete against Apple Tesla.

 

[shrspeedblade]

Is there actually a different industry for EVs? I thought it was just one big thing called the car industry.

If Tesla dominates the EV market by selling 90% of all EVs, and the EV market is 1% of overall car sales, can Tesla make money?

Do you realize that EV sales in the U.S. by companies not named Tesla were in the neighborhood of 10k for Q1? I guess I'm not as much worried about Tesla as I am EVs in general. The big companies (oil, dealers, traditional car companies) are working hard to beat Tesla and I'm afraid they're being pretty effective. I spent the beginning of the week in Baltimore and talked with several people about their thoughts on Tesla/EVs. Everyone had the same answer - "they catch on fire too often" / "80 miles is not enough range for me" / "who will service my car when Tesla goes bankrupt?".

I wanted to try to educate them all - but I'm starting to feel like I'm in the show Walking Dead and I'm trying to kill all the walkers one at a time!

I think of it in terms of being a war (which it is, to some degree, a war of ideas and beliefs for the future). All a solder can affect is "worry about the front in front of his foxhole" for the most part.

As Napoleon (who knew something about warfare) said: Soldiers generally win battles, generals get the credit for them.

Take care of the front in front of you. Talk to people. Give them rides. Let them drive the car. Hold the stock long if you can. Buy a Tesla! Debunk the FUD on social media. There are more people in this fight every day. Look at how far it has come in 10 years- but the bigger a threat to multiple industries it only follows the harder the fight will be. And that's why, just like in warfare, morale is very important! Discouraged people don't put up much of a fight- especially when lives aren't (immediately) at stake.

I'm probably getting a little too philosohical here, but if we win. Win we win. Elon will get most of the credit/money/fame/hollywood starlets/etc. Generals usually do- but generally, soldiers win the battles.

 

[VValleyEV]

Tesla Got an Early Lead, but Luxury Electric Rivals Are Racing to Catch Up

Here we have the latest anti Tesla FUD from the yellow rag known as the NYT.

Best part is that not only is Tesla DOOMED by all the legacy car manufacturers that are going after Tesla’s market share with the introduction of multiple BEVs (with no mention of what all these new BEVs might do to their ICE business overall) but the NYT hurries to take a swipe at BEVs in general, bringing up this exotic thing called a ‘Level 2 charger’ which costs ‘thousands of dollars’ and how necessary it is to achieve a 20mph charging rate, which is still not enough!

I read this rag to keep the enemy close, but It is a chore I must admit.

Yeah that level 2 charger thing has just got to be more than just a 220v outlet in your garage, doesn’t it?

Ron Traver on Twitter

 

[StarFoxisDown!]

Starfox calls me a troll too. He thinks I photoshop my shares on Robinhood. Someone asked me to post my position because I expressed some doubt in Tesla’s move to close stores >.> this is mostly a superbull echo chamber at this point. Can’t question anything.

Lol ok......people can question plenty here. Valid questions would be model sr margin, production constraints still visible and ongoing, clear s/x demand issues and the effects of the tax credit reduction. If you think its valid to question demand for model 3 when they only just started making the low cost version in only one market out of 3, then yes you're trolling with dumb demand fears.

And yeah anthony, either you're bi polar as an investor or you're deliberately trying to come off as a long investor with "valid" concerns when in reality you're just trying to instill doubts in other investors

 

[KarenRei]

I thought the price action today is because the uptick rule is in effect?
Shorts should know better than anyone about the uptick rule since it affects them.

No shortage of upticks today

I thought all the produced-but-not-yet-delivered cars were on their way to customers.

"In transit" is not a synonym for "on a truck". There are not >10k vehicles moving around on trucks right now.

It's a standard distribution problem - you move things in bulk to hubs, from there to smaller hubs, and from there to customers.

When you order something from Amazon, do you think that from the second you order it to the second it's at your doorstep, it's on a truck?

Sorry, but bears were right and we were wrong about much of Q1.

My memory is bears insisting that China would have <5k deliveries, Europe lucky to break 10k, etc. And that it was due to a demand problem rather than a delivery problem, e.g. half of Tesla's entire quarterly deliveries right at the end of the quarter.

 

[VValleyEV]

Here is what I posted on our local group's Facebook page.

Good morning Tesla friends! Just got back from a short drive to try out the new 8.5 Nav on Autopilot update. Short response...this seems to be a fully function complete FSD for highway use. Very impressed. That said, some very interesting observations.

First some background. I was on the highway in moderate traffic with light rain (but with the spray from the traffic I am sure the system thought it was much heavier). I had the driver acknowledge turn lane turned off and the turn lane notification set to both wheel vibration and chime. In the future I will probably turn off the chime but each to his/her own. I also set it to automatically default to "no acknowledgement on each trip' so any time I put in a destination it will automatically go to these settings. There are other options.

First off, it seems the system would not engage without first acknowledging the driver presence, aka torque on the wheel. It wouldn't engage for me the first time I tried for this reason and gave me a red prompt to put my hands on the wheel. Very smart I think.

Next, the on ramp performance seems MUCH more confident. My exit is a two lane on ramp and it smoothly accelerated and moved over one lane then did the same to enter the highway flow of traffic. MUCH BETTER!

Next thing I noticed was that it seems to require the same "driver presence" verification before performing any lane changes. In other words, it would signal but would not move over until my hands were on the wheel. Again, I think this is very smart on Tesla's part. Keeps people from abusing the system I think.

Next thing I noticed was that it appears to be more sensitive to poor weather. It went from Nav on Autopilot to regular Autopilot three times during my trip for this reason. Each time it would re-engage when the rain let up or when traffic cleared out and there wasn't as much spray. Lane changes were all smooth and confident. It would wait for an opening and then smoothly accelerate into the new lane. It would then return to the right lane to get out of the passing lane much more readily I think than before.

Overall, on this short trip, I was blown away. Can't wait to try it on dry roads and a longer trip. Sorry for the lenghy post but thought some of you might be interested. Of course, everyone will have different opinions, but I think this is a BIG step forward for the system. Can't wait to see what Hardware v.3 has to offer when the time comes.

Hope that helps.

Good news. I recall you said this wads 2019.8.5. What was the previous software release you are comparing it with?

 

[shrspeedblade]

Didn't view the tweet, but as a point of reference, my buddy who live in Raleigh, NC saw a bunch of 3s parked in a lot near him around the end of Jan. A few weeks later the lots were empty. My educated guess is Tesla builds a bunch of 3s for US consumption at the end of the quarter (and maybe a bit into the next), parks them on lots that they lease (no space at most service centers), and then switches over to international builds.

It would be interesting to visit those same lots in a month or so.

I did just this at the big lot in Richmond, CA a couple of weeks ago. It was empty (I posted a picture in this thread, too)

Something to consider is that when I took the video last June and it was stuffed with cars, it turned out to be probably just less than a 1000. To see it, both in pictures and in person it looked like thousands upon thousands in ranks stuffed together in a space larger than a football field. These shorts posting videos and pictures on Twitter are to a certain degree suffering from that most common of human tendencies confirmation bias.

Good debate and honest misgivings should be brought up in this thread, lest we longs fall into the same trap.

 

[Remus]

Confession:

Yesterday I liquidated my TSLA position at open (my broker doesn't do pre-market trades). In hindsight I think it was a huge mistake and I'm buying it all back this morning. It hurt my cost basis by about $8/share. I was expecting a drop to continue throughout the morning and wasn't sure if there would be negative SEC repurcussions but neither happened.

I am a long (or have been traditionally) and have been pretty much all-in since not long after the IPO. I held when we dropped from $380 to the $250-280 range multiple times, when I could have been "smarter" and played the volatility. But the drop in S/X deliveries really spooked me as I know that's where a good portion of GMs come from currently.

With the easing pressure of the SEC debaucle and some reflection, I realized there are lots of good things to come, so I'm all in again this morning.

The mistake cost me a few thousand bucks in the short term, but I'm still confident that long-term I'll be in really good shape. (Stock would have to drop a lot for me to come out with a loss overall due to TSLA, so I'm luckier than most).

Moral of the story: Don't sell at a bottom. (Smacks forehead aggressively).

I also sold my trading share (15% of all my shares) at the absolute bottom, converting paper loss to real loss. I was hoping to get back in at a lower price, looks very very unlikely now.

 

[Fact Checking]

In the past even with the uptick rule in place shorts have capped the price so that it doesn't go up... That isn't happening. (Or if this is the capping, what would happen without it.)

There was a weird 2.5M shares spike/trade at around 10:40 earlier today.

Speculation: big short might have been posting very large sell limit orders to cap the price - without any true intent to sell. Algos will generally recognize a 2.5 million shares barrier in the book and will not trade against it - few algos will trade 600 million positions in a single stock - way too risky and way too illiquid. In fact algos will interpret this as a sign to sell.

But, if the spike is real then someone called that bluff and picked up 2.5 million shares ...

Super bullish if true.

 

[Right_Said_Fred]

Hindsight is 20/20 but making the same mistake repeatedly is avoidable failure.
If one strategy is not working, changing strategies is the smart thing to do.
The purpose of investing is to make money. If the world is saved, then that's a happy by-product of all these shenanigans. But in the end, I am depending on myself for my retirement. Elon isn't sharing his wealth with me so I would be a fool to give him money with no expectations of a return on my investment.

Taking money off the table at a certain level and putting it back on the table at a lower level, and then repeating that several times, is not investing. It’s speculating.

 

[UnknownSoldier]

Taking money off the table at a certain level and putting it back on the table at a lower level, and then repeating that several times, is not investing. It’s speculating.

How is it speculating when short term trading is an integral part of investing?
Just because you don't like something doesn't mean you get to rename it with the pejorative term of your choice. Plenty of people buy and sell daily, weekly, or monthly. It's still investing, just on a shorter time horizon than the buy and hold for years people.

 

[Lessmog]

I thought the same thing when I saw video of Enhanced Summons in a nearly empty parking lot. It was moving pretty slow and cautiously.
Not a bad idea but in the very common environment you describe, I would expect it would move even slower with multiple stops. In a busy mall parking lot how many would want to be trapped behind a vehicle driving itself that way? So there are possible downsides to ES use. I expect the engineers are working hard to balance safety versus some degree of human driver nimbleness.

Can't you still honk the horn from the app?
(OK, not quite like sharks with lazers ... )
Still, well within view.

 

[MarcusMaximus]

All this talk about the SEC and the judge. Does all that REALLY matter if there is not enough demand to sustain Tesla short or long term?

I don't know why we're even talking about the SEC case when Tesla's deliveries were down 31%.

Yes, I'm scared. Now I know why Tesla was cutting prices and playing games with the announcement of the $35k car (looks like another attempt to bring people in and then hope they'd just go ahead and buy a more expensive model), and cut prices by thousands of dollars on inventory cars. I was hoping the Model S price cut was due to a new model coming out (whether a refresh or longer range), but in reality it was a desperate attempt to sell cars and get the deliveries up.

With all the games, Tesla could only muster up 63,000 deliveries. And even if you add the 10k in transit, that's a pitiful 73,000. Why will this get better next quarter? Or the next?

Someone tell me something to make me feel better. I'm a ball of gloom right now.

S/X sales were, in fact, massively down. But S/X production was also massively down. They produced ~2000 more than they sold, with somewhere between 0 and all of the remaining in transit(imo, this is likely much closer to 0, but bears keeping in mind, regardless).

And, of course, that “pitiful” 63,000 was more than double that of the same period last year. Q1 is, and always has been, seasonally weak. You don’t get many people buying cars in devastating blizzards.

I’m not saying this quarter was good(it wasn’t), or even that it hit expectations(it didn’t). Just that I see nothing in these results that look in any way bad for future results. Model 3 looks to be doing just fine to me(I expect somewhere near 100% of those 10,600 cars were 3’s). S/X will need a substantial refresh ASAP to keep up sales(right now unless you absolutely need the bigger size, I can’t understand why anyone would buy either over the 3), but I think we all knew that time was coming.

 

[sparcs]

Is the feeling here that the Q1 Earnings is already baked into the share price? Seems like Tesla is going to post a fairly sizeable loss and yet share price is spiking upwards.

 

[Creekstalker]

I also sold my trading share (15% of all my shares) at the absolute bottom, converting paper loss to real loss. I was hoping to get back in at a lower price, looks very very unlikely now.

I was tempted but held off. I've got a core position in an IRA that I've always said I was going to hold until Tesla started paying for television advertising (which I've noticed more TMCers demanding, btw). I added a few shares in a regular account that I plan on swing trading but cost basis is $308 on those. Kinda need a runup before I start trading those (I should've sold in January in the $340's- oh well).

Good luck and at least you've got a loss for tax season.

 

[kbM3]

OT but relevant I think.

The new 8.5 update for Nav on Autopilot is a HUGE step forward in the system. At least that was my first impression this morning when I tried it for the first time. VERY impressed. This stuff is happening folks...and people are going to want it.

Dan

As far from off topic as it gets in my opinion. On Reddit this morning many were raving about the improvements in NOA. To be fair a few still have problems. It definitely seems to have problems when the maps,are off.

I should have been trading the last 2 years yes. Sell when it goes over $300, buy when it goes back to $260. I would have a made a mint now. Holding long on a stock that trades heavily on sentiment is a sucker's game and I've been a sucker. I intend to sell most of my stake and trade in and out instead of letting it just sit there doing nothing while the market keeps going up.

So many people have lost out by swing trading Apple, or Amazon or even Tesla way back when, because they were out of the stock when it made a huge jump up into the next trading range.

Firstly, Tesla isn't telling much about this - and they shouldn't, they are the industry leader who has various proprietary secrets to protect.

But I got the impression that they have two main methods of data collection: on Autopilot disengagements, and also they have filter conditions they are sending out to the fleet. So if say Andrej Karpathy is interested in disengagement events about "tunnels", they might have the methods to get only such events from the 100 cars a day that disengage around tunnels, not millions of disengagement events per day.



I believe Tesla's labeled image database must be in the millions - perhaps hundreds of millions of images, and I wouldn't be surprised if it was above a billion images.

They are not doing stereoscopic vision the usual way, instead their networks recognize 3D perspective patterns in 2D frames and to turn them into distance and perhaps object attitude (object movement vector) attributes. So their networks can, in essence, do things like:

Note that these are actually processed 2D images of cars, which the neural network recognized as 3D cars and the output is rotated by the neural network itself. I.e. after training the network you can input "144°" rotation as an input parameter, and you'll get a rotated car generated by the neural network.

So the GIFs above are not real photos of cars, they are the generated output of the trained neural network and a camera/view position parameter.

See this:

"HoloGAN: Unsupervised learning of 3D representations from natural images"

Thu Nguyen Phuoc - Work​

This is pretty close to how the visual cortex in the human brain is working I believe. This is how we can see in 3D just fine even with a single eye.

Did you see this tweet by greentheonly (aka verygreen the one with hacked Autopilot) explaining how Autopilot collects data?

green on Twitter

Oh please. Don't talk to me about "demand problems" when many of us on this forum, including me, can't buy any model at all. And nearly half of the people on this forum are at best only allowed to buy the highest-end models.

If you want to confuse delivery problems with "demand problems", don't do it in front of people who aren't allowed to give Tesla their money.

Yeah, Tesla screwed up. Deliveries got started way later in Europe than they thought they were going to have to. Causing them to have to suddenly switch gears to domestic late (too late) in the quarter - after having gutted their domestic delivery infrastructure they didn't think they were going to need in order to save money. That doesn't suddenly transform into a "demand problem" when demand in W. Europe + Scandinavia, and probably China (although it's a black box, so who the heck knows) didn't even come close to being saturated in Q1 just for the highest-end models alone. Here we are only five days in April and Norway is already up to half its all-time record April deliveries, just on residual inventory without the "delivery volunteers", of only AWD and P - vehicles with tens of thousands of dollars in profit on them at average sales prices. But oh no, "demand problem"!

Demand problem my arse. Sorry. #ShutUpAndTakeMyMoney

Thanks for explaining this so well. It definitely helps allay any demand fears for Model 3.

 

[Dan Detweiler]

Good news. I recall you said this wads 2019.8.5. What was the previous software release you are comparing it with?

8.3

Dan

 

[Drax7]

Take into consideration that Tesla decided to discontinue the 75d version of the S and X model.
That probably had the most significant impact on the sales volume for those models
This last quarter as opposed to loss of sales due to the lack of a refreshed S version.

 

[bdy0627]

Lol ok......people can question plenty here. Valid questions would be model sr margin, production constraints still visible and ongoing, clear s/x demand issues and the effects of the tax credit reduction. If you think its valid to question demand for model 3 when they only just started making the low cost version in only one market out of 3, then yes you're trolling with dumb demand fears.

And yeah anthony, either you're bi polar as an investor or you're deliberately trying to come off as a long investor with "valid" concerns when in reality you're just trying to instill doubts in other investors

I think it's perfectly fine to question just about everything that happened in Q1. I think taking the stance that everyone should assume this or that because it seems obvious isn't helpful. We should constantly question everything to some extent. As far as I can tell, Tesla did not anticipate the huge drop in demand for models S/X in Q1 unless there is some super secret developing happening that was worth losing about $1B in S/X revenue for the quarter. They indicated they would decrease production and have slightly lower deliveries (which was way wrong) but then they also massively cut prices in an effort to stimulate demand. On top of that they dropped the shorter range versions. That's all just plain confusing. They have not offered explanations for many of the actions taken in Q1. It's a very confusing quarter. The financials are going to be awful for Q1. This was poor execution in lots of ways, including communication of strategy.

Back to the demand question, we do not know the sustainable demand at this point for any of the vehicles now that the 3 is out in higher volume, particularly with the Y on the horizon as well. It seems very clear that U.S. market demand for the higher margin vehicles has dropped way off, which is understandable given the number of people that were waiting for 3s, plus the drop in the tax write off. No one thought it would be this big of a demand drop so quickly though. Until Tesla can provide the lower margin vehicles at a profit, that's potentially a problem. Maybe they can make a profit on the SR at this point, but it appears questionable. Production did not ramp significantly in Q1. Was that intentional or not? We really don't know and they aren't telling us why. Tesla has said they are going to produce as many 3s as they can. If they intentionally did not produce as many as they could in Q1 to conserve cash, that goes against their earlier statement/guidance and they have not provided any communication otherwise. All we can do is speculate. Some people have worked it out in their minds not to question these things further but many of us are not so certain about it. I for one don't have a huge amount of confidence in Tesla's execution strategy right now even though I love the vehicles. It looks like Tesla's cash level is roughly similar to the brutal Q2 last year and it's not clear at this point that Q2 this year is going to be a great quarter. If execution is poor this quarter then a capital raise Tesla has been desperately trying to avoid is probably needed. I think we need more balanced discussions about these things rather than bullish skewed ones. I'm not talking about shorts that come to fan the fire. That's different.

 

[larmor]

Is the feeling here that the Q1 Earnings is already baked into the share price? Seems like Tesla is going to post a fairly sizeable loss and yet share price is spiking upwards.

Spiking upwards because transportation paradigm going to shift. Uber and Lyft changed the paradigm but are flooding the market with rates so low to capture customers, but what then, when they have the market will rates rise so they can make a profit?

The most material tweet which got basically little attention is the comparison of FSD feature as a competitor to uber/lyft. Previously, FSD was meant for a family to share, but from what i remember there was no acknowledgement or direction for out right ride delivery network....