-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
cliff harris
Member
I really dont think that as investors we should be salivating so much about more and more things being removed from the cars. As a recent UK model Y buyer, I can assure you that the removal of ultrasonic sensors is MASSIVELY unpopular outside of the US< where we cannot even get access to FSD beta. The new model Y is objectively an inferior product to a 1 year older model, until Teslavision can 100% reliably replace that functionality.
The idea of removing turn signal stalks before even fixing the reputational damage associated with USS is madness.
I was angry enough to get a car that suddenly had no auto-park or summon, let alone FSD, despite paying for all 3. Finding out there was no way to manually initiate a screen wipe (Teslavision still sucks as a rain sensor), or even indicate would have made me reject the vehicle and cancel my order entirely.
Tesla make a decent profit on every vehicle. Its eagerness to take away features considered standard on way cheaper cars is one of the worst aspects of the company. Why hand ammunition to critics? indicator stalks are not made out of gold, they can afford to install them.
Good idea! They already pushed out auto cancelling turn signals to 3/Y with the holiday update.
EDIT: Agree with Cliff’s point above though. These capabilities need to be fully functional first, unlike the idiotic move to remove the ultrasonic sensors before the cameras can be relied on for the same features.
Last edited:
StealthP3D
Well-Known Member
I believe the high TSLA trading volumes at the current low prices are the natural result of market makers unwinding the shares they had to buy to hedge all the bullish call options they wrote due to unprecedented demand, and that these bullish TSLA positions are either expiring worthless or being unwound with huge losses?
When speculators thought Tesla calls were the ticket to wealth, they bought them in unprecedented volumes through 2021 and even into 2022 as TSLA market price softened. Many would have expirations in 2022 and through 2023/4. When purchased, such calls options have a positive impact on share price as the market makers must hedge them by buying actual shares. But as they expire, and as it becomes increasingly apparent that they are close to worthless, they have to constantly sell off the hedged shares to continue to maintain neutral position.
I haven't done the math on the number of options sold over time, and I wouldn't bother doing the math because I don't trust that the published data provides an accurate representation of the true size of the options market. But I would assume it's at least as large as the numbers indicated. And I would think this could explain the huge unwinding we are seeing in TSLA share price.
Blame the bulk of this unprecedented unwinding on all the failed speculative call positions. The speculative options market should never be allowed to become so large relative to the underlying shares of any company because then the situation develops whereby the options market is what is controlling the share price. It's supposed to be the other way around, but this creates much risk-free profit for Wall Street. For that reason, I don't think anyone here has the unrealistic hope that the SEC will actually do their job by establishing reasonable and sensible limits on the number of options sold relative to the underlying shares.
Making this situation worse is that speculators put too much meaning into high and low share prices. For example, as the price climbs higher, dumb speculators think it must mean the price will keep climbing higher, so they buy calls. And when prices are low, as they are now, speculators think it must mean TSLA is not worth much, that there must be problems they can't see, so they buy puts. All this options activity impacts the share price. Never use the current share price, high or low, to value a company. Wall Street loves the way an outsized options market can swing the prices of the underlying securities around, they love that the tail can wag the dog, because they have the best visibility into the aggregate bets speculators have made and this turns the options market into free money for them. I would say they laugh all the way to the bank except for the fact that they are the bank!
And never be fooled by thinking if you write the contracts that you become the house! The market makers will take the other side of that trade if it helps them hedge their risk at a favorable price. You are never the "house".
These are only some of the reasons I try to dissuade Tesla bulls from giving the market makers all the tools they need to manipulate the share price in their favor by making the options markets bigger. It would be OK if all the bulls won on net average, but they don't. The market makers always win on net average. And many of the same options players then complain that the share price is not acting rationally! That's right. It's because the tail (options market) is waging the dog (share price).
I tend to agree with you, as I also capitulated and dropped a few hundred shares during premarket. I'm still 90% in, but was starting to feel rattled by the market.
Captkerosene
Member
Do you feel comfortable using current 2024 pricing to predict what packs being delivered in 2023 were sold for? (I wouldn't) If Tesla wanted 30% margins two years ago and then lithium prices went up 500% might that not have wiped out our profits for this year?First of all, how can I take seriously a video of a dog cuddling with a stuffy?
Absolutely some of the assumption of that twitter account are over the top. The margins and current production rate are way overestimated. He misinterprets Elecktrek's "25 a day" as current rate, not capacity. We have no idea what the current rate is. Our best guess is to listen to what Tesla says, which is energy growth of > 100% YoY. So let's say 15-20 GWh in 2023.
Margin of 70%+ seem absurd I agree. But James quotes Tesla 18 months ago saying they want Energy to have similar margins to Automotive.
That's before the IRA bill came. IRA bill easily can move margins from an original target of 30% to 50% because of the massive credits purchasers gets.
Plus some are trying to build a bottoms up model of COGS. Do you think CATL LiFePo cells would cost more than $100 / kWh?
4000 kWh = $400k for the cells worst case. That's going to be the most expensive part by far. I don't do this sort of modeling, but my hunch is COGs are definitely under $1 million per pack. Tesla is selling them for 2 million. It is the selling price (known) that is crazy, probably not assumptions about COGS.
So let's say more conservatively 50% margins on 15 GWh installed capacity in 2023. At 2 million per pack ASP, that's
~ 7.5 billion in revenue
~ 3.25 in profit
~ $1 in incremental EPS contribution.
That's a meaningful contribution, especially at a time when forecasters are modeling low EPS, EPS growth, and PE ratios to the stock.
It is important, because it will change the outlook from $5 EPS, 25% earnings growth, to $6 EPS, 50% earnings growth.
That will change a basic stock valuation from $125 ($5 * 25 PE ratio) to $300 ($6 * 50 PE ratio) within a year.
That's why understand Megapack value matters so much right now.
Three row versions (6 or 7 seat, 6.5k, 3.5k options) don't need dual motor qualify. 5 Seat is $120k USD.
I would guess Fremont (and supply chain) is not set up for the order volume that would occur with a 33% price cut, 40% with IRA credit.
So you're saying there is a potential demand "problem"
I resemble that remark.
StealthP3D
Well-Known Member
Correct. 500,000 is a completely different aspiration from 20,000,000. It's also correct that Tesla might be able to do it, but that other outcomes are possible.
But that was true of the original 500,000 aspiration, especially given the fact that Tesla was a scrappy startup in 2014 and the EV industry was, for all practical purposes, non-existent. Now Tesla is a real volume manufacture, with volume efficiencies that cannot be matched by the competition and EV's are widely recognized as the superior solution going forward. So, I would suggest that the aspiration of 20 million by 2030 is less of a stretch than the original 2014 aspiration of 500,000 by 2020.
Elon has pointed out how exponential growth curves are very sensitive to small changes in time. This means I would consider the 20 million estimate to have been essentially correct if they hit it anywhere between 2029 and 2031. That said, I think they might hit it by 2029 if the global economy isn't impacted by massive events that I consider to be relatively low probability, things like WWIII, asteroid strikes, major volcanic activity sufficient to impact weather/crops/solar production or global pandemics much worse than COVID. I expect economic activity to accelerate through this decade if there are no major global surprises similar to those listed above.
Of course, predicting the future is fraught with uncertainty, which is what makes Elon's aspirations in 2014 so notable, that he hit half a million in 2020, even with the COVID shutdowns and chip shortages.
In 2021 Rivian had an IPO roadshow in which they predicted they would make 50,000 vehicles in the next year. But they closed out the year with less than half that! Rivian's aspirations were more than 100% higher than their actual production and those aspirations were only a one-year goal! I don't recall Lucid's aspirational production numbers, but I think it turned out even worse for them. My takeaway from this is to not bet against Elon Musk and the teams he has assembled.
bkp_duke
Well-Known Member
No, it would not. Because there is actually very little Lithium in a Lithium Ion battery.
The Key Minerals in an EV Battery
Which key minerals power the lithium-ion batteries in electric vehicles?
elements.visualcapitalist.com
I understand your point, and Tesla really fumbled the ultrasonic sensor removal. It almost makes me wonder if there is more to the story that we never heard.
But two thoughts:
- The last 12 months Tesla basically could do whatever they wanted to the cars at almost any price because there were half year+ waits to get their cars. Those days have gone a bit and I expect Tesla will be more sensitive to how their changes affect buyer interest. Case in point, the S/X yoke/wheel situation.
- I think one of the things Tesla has been very successful at is figuring out what can be removed from cars. Compare the 3/Y to equivalent cars from old school manufacturers, there is so much *sugar* everywhere inside compared to a Tesla. (And I say this as someone who still loves Porsche!).
thesmokingman
Active Member
That headline reminded me of that time they had Thomas Peterffy on CNBC crying over gamestop. In essence these retail traders shouldn't be allowed to squeeze the players like this, it will break our system! sobs sob sobs. Ok that was quite a paraphrasing but you get my drift?Article to go along with above video.
Authority Allegedly Protecting Retail Investors Screws Them Over
Everyday investors are sick of the nonsense that screwed them over during the GameStop and AMC fiasco, but is it happening again?thefederalist.com
StealthP3D
Well-Known Member
I bet they could make an $80K version of the Model X if they wanted to be content with legacy auto like margins. But that wouldn't be worth it because they can't make enough of them (with their existing production lines), and they would simply displace sales (or reduce margins) of the more profitable Model Y. It would also cost a lot to put Model X into high volume production. It just wouldn't make sense on any level.
Last edited:
Most wanting to buy S/X would not qualify per their income/tax bracket anyway
Don't let the IRA hammer make everything look like a nail
Max Pain is a small window to peer ahead, what's the ave of all options written on TSLA - as a way to determine if the banks have shed all the fat needed, or still more to come. Wouldn't this be just a matter of averaging every day forward for Max Pain then find out if we're above or below current price?
I think it is the reverse - if they had 25K cars ready to go. China demand would be further satisfied with the 25K car and M3/MY prices would not have to be cut too much, and demand could hover +-10% at the current price point
High vol 25K still atleast 1-2 years away ... low vol will not move the needle too much ...
Last edited:
Artful Dodger
"Neko no me"
dhanson865
Well-Known Member
ICE decay vs BEV adoption curves for UK. Suggests a crossover in sales for BEV vs ICE in 2025. Further details at One in three UK car sales may be fully electric by end ‘23 as S-Curve transforms market
New AutoMotive, Carbon Tracker. Note: The individual data points show actual new sales market share. Sales are averaged over a 3-month rolling period. The S-Curves are plotted using a logistic function with the projection shown with a dashed line. ‘ICE’ is defined as all vehicles with an internal combustion engine, including hybrids.
New AutoMotive, Carbon Tracker. Note: The individual data points show actual new sales market share. Sales are averaged over a 3-month rolling period. The S-Curves are plotted using a logistic function with the projection shown with a dashed line. ‘ICE’ is defined as all vehicles with an internal combustion engine, including hybrids.
To each their own, I can see why someone likes stalks. I don't, I vastly prefer driving our yoked 2022 Model X to our stalked 2012 Model S. I think Tesla is doing an admirable job of reducing parts and clutter - there was probably a time in auto design where a new functionality led to a new part, and before you knew it, bam, 3+ stalks poking out of every steering column. Tesla is rethinking that and not everyone will like it. But the brand is built on simplicity, 'no part is the best part', etc. and so I suspect it will continue along the lines below. I welcome it.
Similar threads
- Locked
- Locked
