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

[Rarity]

If we are going into a prolonged recession I would get even more bullish on Tesla. Here is why:

Recession -> fewer people buy new cars -> less profit for legacy OEM -> can't support their negative margin EV manufacturing -> reduced volume -> Tesla get's more of the exponentially growing EV market to itself -> pricing power.

Every one else scaling down -> labor and raw materials get cheaper -> higher profit margin for Tesla.

One question mark is if EV adoption in absolute volume would be faster than the collapse of the overall car market, to have a net EV growth. Personally I think we have reached the tipping point where then answer to the question is yes.

The car business is especially sensitive to utilization rate, which is a complicated factor that you should add as an element in your post. If your factories are underutilized, you bleed out fast. If your factories are fully utilized, you print money. As you can see, there are self-reinforcing feedback loops.

 

[MP3Mike]

Latest blog post on the Tesla site: Model 3 Scores 5-Star Green NCAP Rating

Interesting portion:

In Green NCAP’s efficiency test, Model 3 scored a near-perfect 9.6/10, performing well in both warm and cold laboratory tests as well as highway tests. In the highway test, Model 3 received the highest score of all vehicles tested to date. By comparison, the average ICE vehicle tested in 2022 received 4.2/10, and the average hybrid vehicle scored 5.1/10.

I think that shows how little hybrids are actually better than ICE vehicles.

 

[StealthP3D]

I've never owned this much TSLA before.

Just bought a few hundred more using a market order and I saw something I've never seen before on a large cap stock. After I place a market order, the next click is on "Order Status". Never, in all my years, have I seen that the order didn't execute immediately (within the 2-3 seconds it takes me to click "Order Status"). I've even tried to beat it before by clicking "Order Status" ASAP (under 1 second) a few times and have still never seen a market order of a large cap stock not filled (apparently) immediately. This market order for 400 plus shares didn't even do a partial fill after approx. 2-3 seconds. It was not an "all or nothing" order and Schwab eventually reported that the buy order cleared BELOW the bid/ask spread at the time of the order. It's my belief that market makers have been consistently and heavily hammering on the share price for weeks as FUD builds to maximum crescendo.

By ignoring a market order buy for a few seconds (times hundreds of thousands of orders) they can suppress the share price. Making a market in a stock is all about being the arbiter or referee of the order flow. By playing games with order flow, they can consistently emphasize the supply of a stock over demand. This market manipulation is like a tax on all of us and it distorts valuations. but the SEC looks the other way.

 

[Olle]

The car business is especially sensitive to utilization rate, which is a complicated factor that you should add as an element in your post. If your factories are underutilized, you bleed out fast. If your factories are fully utilized, you print money. As you can see, there are self-reinforcing feedback loops.

Excellent point, thanks. I added it.

 

[Rarity]

A few days ago I watched the Netflix documentary Fugitive: The Curious Case of Carlos Ghosn, which details at a high level how Ghosn completely turned around the fortunes of Nissan. Recommended, as it is a great story throughout and thought-provoking.

While the show focused on cost cutting a bit too much at the expense of a focus on utilization, Ghosn is existence proof that a legacy automaker can turn things around. I believe that it is difficult and unlikely overall going forward, considering that the technology is evolving at a rapid clip.

 

[kbM3]

Latest blog post on the Tesla site: Model 3 Scores 5-Star Green NCAP Rating

Interesting portion:


I think that shows how little hybrids are actually better than ICE vehicles.

To be fair, hybrids primary efficiency advantage is in the city, so not that surprising to see less superiority to ICE on the highway test.

 

[mongo]

European Model S Plaid:
300 kph 186 MPH top speed (200 MPH with carbon ceramic brakes)
Trailer hitch with 1600kg tow rating.
Tesla Model S Plaid CoC for Europe lists 186 mph top speed, tow hitch: report

 

[elasalle]

Tesla might produce 100 Semi trailer trucks this year. .... 1st deliveries next month.
100 Semi's for Q4 ??? ....

 

[dhanson865]

Latest blog post on the Tesla site: Model 3 Scores 5-Star Green NCAP Rating

Interesting portion:


I think that shows how little hybrids are actually better than ICE vehicles.

I think that shows how a low value outlier just ruins an average.

Take a Yukon/Tahoe/GMC aka Yukahoe and turn it into a mild hybrid (Stop/Start only) or a true hybrid with too small a pack and it ruins the average for all.

Even averaging something like the old school Prius with the old school Camry hybrid would give a low average and hide how superior the Prius was vs the Camry in the days before EVs were common.

 

[StealthP3D]

A few days ago I watched the Netflix documentary Fugitive: The Curious Case of Carlos Ghosn, which details at a high level how Ghosn completely turned around the fortunes of Nissan. Recommended, as it is a great story throughout and thought-provoking.

While the show focused on cost cutting a bit too much at the expense of a focus on utilization, Ghosn is existence proof that a legacy automaker can turn things around. I believe that it is difficult and unlikely overall, considering that the technology is changing at a rapid clip.

There is no doubt that legacy automakers can (and have) turned themselves around in the past. But it is a long slow project because big ships take time to change course. And that is not to say they cannot turn themselves around in the future, just don't under-estimate how long it takes. Especially considering that Tesla is (mostly) single-handedly creating a new era in the auto industry. It's a lot harder to turn things around when there is a new kid on the block eroding your sales and creating a new standard in terms of what efficient manufacturing means.

Previous examples of legacy automakers that successfully turned themselves around only involved competing against other legacy manufacturers. The landscape has changed and, thanks to Tesla's relentless innovation in terms of finding ways to make better cars for less money, the landscape has changed in a way that will favor auto buyers and the disrupter(s), not legacy automakers. Consumers will be winning in a big way, and they don't even know it yet. Legacy auto's grip on the industry is waning more quickly than most of them are able to turn things around. What will kill them is how cheap cars become for the consumer. The most nimble will get in before the door closes, but the remaining carnage will be epic.

 

[Captkerosene]

Munger invested in BYD, and last quarter they divested a large portion of their stakes.
So ya he must be surprised by the Tesla Miracle ... not sure why they are waiting to invest in Tesla ... one day Tesla insurance might also eat into Geico profits ...

(+ ego's and honor must be kept aside, when there is $$ to be made, if waiting for dividends ... it might be too late )

Tesla's success is not why Buffett and Munger sold some BYD ... it was BYD's high price (and maybe the tough competitive environment) that made them uneasy. As it was, BYD was way outside their usual investment styles ... but they had a lot of confidence in the guy who brought the investment idea to them and the CEO of BYD.

 

[Nocturnal]

View attachment 874849

Tesla might produce 100 Semi trailer trucks this year. .... 1st deliveries next month.
100 Semi's for Q4 ??? ....

If anyone wants proof that the media is scummy just look at that. "Tesla shareholder" = guy who owned 9 shares.

 

[keydiver]

To be fair, hybrids primary efficiency advantage is in the city, so not that surprising to see less superiority to ICE on the highway test.

Maybe true, but the thing I disliked the most about my Prius was that even if I was only moving the car a short distance, it insisted on starting the ICE engine to warm up the catalytic converter. That warmup cycle always pulled down my mpg and probably spewed the worst emissions.

 

[Speedr117]

I've never owned this much TSLA before.

Just bought a few hundred more using a market order and I saw something I've never seen before on a large cap stock. After I place a market order, the next click is on "Order Status". Never, in all my years, have I seen that the order didn't execute immediately (within the 2-3 seconds it takes me to click "Order Status"). I've even tried to beat it before by clicking "Order Status" ASAP (under 1 second) a few times and have still never seen a market order of a large cap stock not filled (apparently) immediately. This market order for 400 plus shares didn't even do a partial fill after approx. 2-3 seconds. It was not an "all or nothing" order and Schwab eventually reported that the buy order cleared BELOW the bid/ask spread at the time of the order. It's my belief that market makers have been consistently and heavily hammering on the share price for weeks as FUD builds to maximum crescendo.

By ignoring a market order buy for a few seconds (times hundreds of thousands of orders) they can suppress the share price. Making a market in a stock is all about being the arbiter or referee of the order flow. By playing games with order flow, they can consistently emphasize the supply of a stock over demand. This market manipulation is like a tax on all of us and it distorts valuations. but the SEC looks the other way.

Easy answer. Interweb was clogged with all the teenagers trying to buy Taylor Swift concert tickets!

 

[jerry33]

Maybe true, but the thing I disliked the most about my Prius was that even if I was only moving the car a short distance, it insisted on starting the ICE engine to warm up the catalytic converter. That warmup cycle always pulled down my mpg and probably spewed the worst emissions.

Correct. Prius works best with a 25+ mile commute.

 

[JRP3]

If anyone wants proof that the media is scummy just look at that. "Tesla shareholder" = guy who owned 9 shares.

At least it was accurate reporting.

 

[larmor]

View attachment 874849

Tesla might produce 100 Semi trailer trucks this year. .... 1st deliveries next month.
100 Semi's for Q4 ??? ....

More important than impact on Q4 will be real world data on cost of operation. This will be the news to watch for and will make the Semi (fully) lucrative...

 

[MP3Mike]

To be fair, hybrids primary efficiency advantage is in the city, so not that surprising to see less superiority to ICE on the highway test.

The scores are overall scores, not scores for the highway test.

 

[MABMAB]

I've never owned this much TSLA before.

Just bought a few hundred more using a market order and I saw something I've never seen before on a large cap stock. After I place a market order, the next click is on "Order Status". Never, in all my years, have I seen that the order didn't execute immediately (within the 2-3 seconds it takes me to click "Order Status"). I've even tried to beat it before by clicking "Order Status" ASAP (under 1 second) a few times and have still never seen a market order of a large cap stock not filled (apparently) immediately. This market order for 400 plus shares didn't even do a partial fill after approx. 2-3 seconds. It was not an "all or nothing" order and Schwab eventually reported that the buy order cleared BELOW the bid/ask spread at the time of the order. It's my belief that market makers have been consistently and heavily hammering on the share price for weeks as FUD builds to maximum crescendo.

By ignoring a market order buy for a few seconds (times hundreds of thousands of orders) they can suppress the share price. Making a market in a stock is all about being the arbiter or referee of the order flow. By playing games with order flow, they can consistently emphasize the supply of a stock over demand. This market manipulation is like a tax on all of us and it distorts valuations. but the SEC looks the other way.

Does EVERYONE have to be on some kind of a conspiracy bandwagon these days?
Could it not be that your cache needed clearing, your service was slow, or any number of things.
It happens once and you jump to MM?

It used to happen to me all the time, in many different investment vehicles.

 

[Artful Dodger]

More evidence that energy supply concerns are easing in Europe:

Tesla adjusts European Supercharger rates and shrinks peak hours

We use the word adjust because fees have increased in some countries, decreased in others, and increased and decreased in others.

driveteslacanada.ca

Tesla noticed a drop in traffic and shrunk the peak period to 4:00 pm to 8:00 pm.

Agile FTW.