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

[Curt Renz]

MarketWatch - 11:42 am ET:
Leased electric vehicles now qualify for $7,500 tax break

 

[ggr]

Yes - not getting much attention by analysts. 10,000 Megapacks is 39GWh of storage. In the past 12 months, Tesla has done 5GWh (and this number includes Powerwalls). Going from 5GWh to 39+ GWh is quite amazing.

Tesla needs another Megafactory (like Lathrop) in central or eastern US for improved logistics. Maybe an announcement we will hear soon as well.

But think of the $$s. Megapacks sell for more than $1M, so that's $10B annual revenue, or more. Still only a fraction of the auto side, but starting to be very significant given that most people ignore the contribution from Tesla Energy.

 

[hobbes]

Lots of happy people on the Benelux FB pages, happy that they can still get their Tesla today or tomorrow, in part because of the free 10000km supercharging. Adding all kinds of rumours and FB messages together, there must be many hundreds of cars still delivered today or tomorrow in Belgium and The Netherlands. All coming from the last two ships that arrived a couple of days ago in Zeebrugge.

Just looked through the German TMC equivalent for delivery reports - pictures of lines of people waiting for their car and one report of 237 cars scheduled to be handed to their owner at one location in a single day. People generally happy with car quality from the posts I read. Really looking forward to the numbers!

 

[Max Plaid]

Now waiting for the day @StealthP3D makes an entire page-long post Atlas Shrugged John Galt style.

Who's John Galt?

 

[Max Plaid]

Just some anecdotal evidence of the end of the year delivery rush. Picked up my MX Plaid today. Aside from some fit and finish issues it's a pretty good build.
Tesla recently leased a very large building in Holzgerlingen (near Stuttgart/DE) to serve as a delivery center. There were half a dozen Plaids ready for delivery plus 100-150 Model 3 & Y's standing inside. My guess is that they will try to deliver them today and tomorrow.

Car carriers were coming and going and there was a steady stream of customers welcomed by a friendly and young group of Tesla employees.

Photo??

Mine was pretty flawless too - had it two weeks already and loving it. Being pedantic I have a small list of things to be addressed, but the build-quality is dramatically improved from previous generation

How are you getting long with the yoke? I really like it, much more than a traditional steering-wheel, but actuating the indicators when turning is a bit tricky - this could be solved by Tesla implementing a "Hey Tesla" Siri type thing, and you could tell it "Hey Tesla, indicate left"

 

[AndrewZ]

Lots of talk about the model Y and will it/will it not entirely fit within the IRA but..

People... What about the cybertruck? Assuming the IRA is law at least through 2023-2024, then a BIG chunk of Tesla's production is likely to be Cybertruck. Thats the one that really matters?
Also, they can adjust the product mix to favor the models that DO suit the IRA. TBH I have long wanted Tesla to take more of an interest in the lower end variants of the model 3. We are still lacking a truly affordable car. Get that model 3 price down with front/rear castings and 4680s and demand for it will (I suspect) be rather good.

Not sure when I’d expect to see large numbers of <$80k Cybertrucks when a Model Y LR is $66k.

Maybe <$80k is doable with single motor variants, but even then it feels like a stretch considering pricing across the lineup. People seem to expect the tri and quad motors to run $100k+.

 

[elasalle]

Photo??

Mine was pretty flawless too - had it two weeks already and loving it. Being pedantic I have a small list of things to be addressed, but the build-quality is dramatically improved from previous generation

How are you getting long with the yoke? I really like it, much more than a traditional steering-wheel, but actuating the indicators when turning is a bit tricky - this could be solved by Tesla implementing a "Hey Tesla" Siri type thing, and you could tell it "Hey Tesla, indicate left"

Indicators is easy peasy- use your sense of touch (like braille) to find the line in center. Indicator on top then is right and below is left.
There is no need to look at all…
Cheers

 

[Ogre]

Tesla should make it clear that they are not going to provide a sandbagged forecast which can be easily exceeded (as many other companies do),

HAH, you got that one completely wrong. GM puts out a sandbagged goal then totally misses it!

 

[StealthP3D]

Is it just me that finds a subsidy being applied because car A is heavier than car B? Should be the opposite, efficiency should be rewarded, base it on form factor/passenger/load capacity, but weight??

Welcome to America, where bigger, heavier and less efficient has been rewarded since American legacy auto manufacturers decided the way to fix the "Japanese invasion" of the auto industry was to lobby government, rather than build a more energy efficient car in a more cost-effective manner. This made big oil companies happy too.

 

[Max Plaid]

Indicators is easy peasy- use your sense of touch (like braille) to find the line in center. Indicator on top then is right and below is left.
There is no need to look at all…
Cheers

To be fair, I only discovered the ridge today, which sure makes it easier, but when turning still not obvious

Tesla has voice commands, why not utilise them?

 

[generalenthu]

Not sure when I’d expect to see large numbers of <$80k Cybertrucks when a Model Y LR is $66k.

Maybe <$80k is doable with single motor variants, but even then it feels like a stretch considering pricing across the lineup. People seem to expect the tri and quad motors to run $100k+.

Dual motor likely to come under 80k assuming a decent upward adjustment from release day prices. Someone correct me, but that was originally ~50K

 

[mongo]

General question: it’s reported that around 285k teslas is the take rate for FSD/have FSD.

Elon stated that by 12/31/2022, over 1 million teslas would have FSD beta active.

Is the reporting wrong or is someones math off?

Elon was referring to FSD capable cars on the road, not purchases of FSD.

 

[Chunky Jr.]

If they needed to make pricing adjustments to qualify for subsidies, I could see Tesla lowering price by, say, $5K if the buyer signs up for 3 years of FSD monthly subscription, like the cell phone model of subsidizing hardware with services.

 

[Ogre]

Dual motor likely to come under 80k assuming a decent upward adjustment from release day prices. Someone correct me, but that was originally ~50K

Was originally $50k.

I seriously doubt they are raising the base price of the dual motor Cybertruck more than 60%. Misses the whole “Affordability” piece of the Cybertruck which was arguably the big sell.

 

[Curt Renz]

Tax loss harvesting remains a factor today for many stocks including TSLA, as does end of quarter window dressing by money managers.

 

[SageBrush]

but generally the market expects guidance, especially guidance the company explicitly repeats on every earnings call all year- to be fairly accurate-

The market should have enough brain cells to realize that unforeseen Covid shut-downs are not boiled into future looking guidance statements. And if they do lack those 3 brain cells, that is not a problem with TSLA guidance.

Now, explain to me why you do not get into a huff when guidance is exceeded.

What an amazingly inane discussion, born out of the whining of day traders.

 

[InTheMiddle]

Mostly execution and growth :-

• Doing a good job of all product ramps.
• Introducing new products.
• Continuing to gain market share in automotive and energy.
• Good progress on FSD.
• New factories, including energy storage battery factories.

Continuing to add to the pile of cash when possible during a recession. paying a dividend or doing a share buyback once they are certain any risk of a recession has definitely passed.

I don't mind increasing the size of the board and/or adding more diversity,

For the CEO role, I expect Elon to make the final call, and he may be willing to step back into a lower profile.

Elon is absolutely necessary for new product development/product improvement, and the more time he can spend working on that the better.

If there is a recession, I rate earnings in a recession way higher than earnings at any other time. So all I want is profit and continuing to grow the cash pile, rather than a loss and eating into the pile of cash. That profit and cash improvement can be very small.

This would make for a great year indeed, @MC3OZ !

Execution-wise, product volume ramping is the most important. In fact, for each of the below, product volume ramping should be the most important goal by far, even if volume ramping requires significant margin reduction (not that I think it necessarily will, it could even be accreditive to margins in some ways, but should the two ever be in conflict, volume should win out).

• While both Austin and Berlin have ramped volume significantly slower than expected (by myself or by many of those opining here), there's cause for optimism that both have turned the needed corners. Another example of Tesla setting incredibly ambitious goals for itself (new factories with new 4680-based structural batteries and mega-castings) and even having 'missed it' by pivoting back to 2170 cells (other than a small number of Texas vehicles) and still-huge rear castings, the end result is still something Tesla should be very proud of. Hopefully both Austin and Berlin will continue to ramp production of existing products to meet their potential production rates this year, while Tesla continues to reach for the stars on ever-larger castings and 4680 usage in vehicles as an important-but-secondary goal.
• On that 4680 front, a clearer understanding of where / how / volume for Tesla's production of these would be greatly appreciated. Sort of a follow-on to Battery Day. Tell us Tesla's current view of what from Battery Day has been achieved, what seems close but not there yet, and what (if anything) they'd hoped for but doesn't seem to be panning out, and maybe even throw in some information on what of those learnings Tesla has been able to share with their various battery suppliers to apply to 18650s and/or 2170s. Then, show us Tesla producing more of their own batteries and a roadmap for growing their in-house battery production vs reliance on 3rd parties, and show us those Tesla-produced 4680s in EPA-listed retail-sale-availability vehicles.
• Residential solar, both solar panels and solar roof, are long overdue for some real execution. It may just be a matter of Tesla not considering themselves cost-competitive vs cheap (in both meanings) solar panels and finding the actual solar panels more challenging / expensive to manufacture leading to the price increases some here have noted. Or, perhaps it's just a matter of Tesla not wanting to expand an area that is lower-margins of a business unit where every deployment is a one-off to some degree (vs their manufacturing strength of mass producing identical vehicles). For the solar panels side, they may be correct, but anecdotally those people I know personally who have installed solar panels from Tesla / SolarCity have been uniformly very happy with them (myself included), and those who have installed solar panels from other companies have been uniformly underwhelmed, so perhaps Tesla can / should ramp that business up to some semblance of its size / scope back when SolarCity was acquired. If nothing else, expanding that would likely help rebuild the installation network / knowledge base to feed into solar roof expansion, where Tesla clearly has a differentiated product offering that warrants high enough prices to keep a decent margin. Ideally, the best way outcome would be significant announcements with new-home builders, so Tesla has less one-off work to do designing / manufacturing for each existing house and Tesla has more to do with "Here's a design for each of the designs you're going to build 500 or more of, and here's how we think you should modify the roof designs going forward to make solar roofs even better."
• Semi production would be great to see moved from hand-built to something which could truly support the 50k-or-more annual volume needed. Very happy Tesla was able to officially deliver these this month! Now on to seeing them produced at at least S/X rates.

As for "new" products, the previously announced products all entering production and delivery in 2023 would be an unexpected surprise. CyberTruck should be delivered in 2023, but it's been too quiet on the Roadster front. I'd settle for clear visibility that this will be something they execute on in 2024 at this point. Truly "new" products in 2023 should merely be Tesla merchandising; new models / bots / etc should be low priority compared with executing well on their existing offerings.

100% agreed r.e. market share in automotive and energy. Massively increasing volume should drive this, and again, market share gains should take priority over maintaining margin (if the two should come into conflict instead of the market share gains growing margin).

"Good progress on FSD" is absolutely the correct phrasing. Tesla doesn't need Robotaxi to be released this year, and unless there are multiple step-change gains to its performance, Tesla should not be in a rush to take on legal liability for FSD. Instead, keep making it better and collecting the $ from both sales and subscriptions of FSD based on what it does do very well, and know that 2023's "good progress" sets Tesla up well for years down the road when Robotaxi or attention-free driving can become profit centers for Tesla.

 

[AndrewZ]

Was originally $50k.

I seriously doubt they are raising the base price of the dual motor Cybertruck more than 60%. Misses the whole “Affordability” piece of the Cybertruck which was arguably the big sell.

I’d expect a dual motor Cybertruck to cost a good chunk more than a dual motor Model Y but who knows, and who knows when we’d see significant numbers of them rather than the more expensive tri and quad motor variants they will lead production with

 

[SageBrush]

I’d expect a dual motor Cybertruck to cost a good chunk more than a dual motor Model Y

I think that makes sense in. the beginning, but the promise of CT is to reduce its production cost to not much more than a cheap battery pack. I don't presume to know if that will ever come to pass, but it is why I don't go out on a limb when it comes to CT retail pricing. The attempt by Tesla at a paradigm shift is too uncertain and novel.

 

[Knightshade]

The market should have enough brain cells to realize that unforeseen Covid shut-downs are not boiled into future looking guidance statements. And if they do lack those 3 brain cells, that is not a problem with TSLA guidance.

There's multiple problems with your argument here, but the two most obvious are:

Markets are notoriously not rational about this stuff- so one needs to stop pretending they live in a 100% rational universe and instead come around to the reality they actually live in- and consider how that reality is impacted by things like this instead of continually dismissing them because they "shouldn't" matter even though they always, always, always end up doing so in real life.


and

Tesla reiterated their 50% or better guidance.... twice... after the covid shutdown early in 2022 (and it's hard to buy "unforseen" after that either). So again you appear to be fabricating excuses in contrast to Elon and Zachs own words. Maybe you should take a moment to reflect on why you keep doing that instead of going by what they actually said, and when they said it?

Now, explain to me why you do not get into a huff when guidance is exceeded.

Explain to me what you keep imagining I said but didn't--- or didn't but should have-- about this? In what way would that be at all relevant to debunking the original story that tried to ignore actual company guidance and instead make up a story counter to it to deny that <50% would be a miss of that guidance?

What an amazingly inane discussion

On that at least we agree. Denial of facts is always inane.

If they needed to make pricing adjustments to qualify for subsidies, I could see Tesla lowering price by, say, $5K if the buyer signs up for 3 years of FSD monthly subscription, like the cell phone model of subsidizing hardware with services.

I don't think that's possible under the current laws? MSRP has to be under 55k (or 80k for some), and includes all factory options that come with the car. So it'd have to be possible to drive off the lot for the lower price without anything else required/tied in AFAIK.