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

[StealthP3D]

When did anyone expect they could drop back into their local GM/Ford/Chrysler a month later and somehow expect a refund because some new sale kicked in?

You're right, car buyers generally don't expect a refund from the dealership when MSRP changes or there is a new incentive offered. It's a done deal. That should surprise no one. But what about the case where two different new car buyers at a legacy dealership buy the same car, with the same options, on the same day, and pay wildly different prices. It comes down to negotiating skill and potentially even dealership sexism, racism or what religion you happen to be.

It's one of the most distasteful things that happens at legacy dealerships, everyone gets a different price, so it baffles my mind how people think a simple price adjustment is somehow wrong and that previous buyers should be compensated.

 

[dhanson865]

Acknowledges this is a show me story, we have to see something hitting the earnings very soon or he's wrong. Q4 2022, q1 2023 at the latest. Should be obvious if he is wrong or right.

apparently TMC can't handled nested quotes.

Thanks for putting all that together. It raises a bunch of new questions but one comment in particular really epitomizes how I feel about all this:



I do expect Tesla energy is in ramp mode and that it will be very profitable, I just don't have enough reliable data to conclude when the big impacts will happen (how fast it will ramp and how sustainable the production will be) and if it's going to be as good as it's being represented by those looking at most of the same stuff I'm looking at. Looking forward to seeing how soon and how good (hopefully plenty of color in Q4 earnings). A new highly profitable revenue stream is probably all TSLA needs to start a real rebound.

Perhaps more important than the potentially explosive impact to share price (assuming the scale and profitability of Megapacks catches investors by surprise) would be the giant leaps forward on the mission this enables. I'm not sure people realize what a large impact relatively small amounts of grid scale battery storage can have on CO2 emissions and fossil energy consumption. The first large battery additions to a grid system will have outsized benefits with slightly decreasing benefits as more battery capacity is added. Batteries multiply the benefit of existing renewable energy sources and also help gas generators function more efficiently by optimizing when and how they are fired up and shut down to meet demand. It's the first big step to getting to a truly modern grid.

I honestly don't care if he is right on timing. I'm just glad people are talking about Tesla Energy in a positive light after so many years of it sitting on the back burner.

I do still want my Powerwall + Solar PV so It would be nice if Tesla Energy got positive enough to accelerate the ramp to homes also.

 

[StealthP3D]

I'm pretty sure Tesla knows what they "NEED" to do better than Leo or anyone here in our little peanut gallery, and Tesla will do the right thing.

So, if the peanut gallery was on a Jet Blue flight that had just ran into stormy weather, are you saying the peanut gallery shouldn't all rush up to the cockpit so they could help the captain guide his plane safely through the storm?

Would it change your mind if they had 169 hours in a Cessna 172?

Maybe if they were Jet Blue shareholders?

No?

 

[Oveeus]

I was listening to Joe Rogan's podcast where he interviewed Peter Zeihan

Now, I don't know much about Peter Zeihan but listening through the podcast, I can tell that he isn't an EV supporter. And he based his belief in one point: we don't have enough resources to build what's needed and resource production do not come soon enough.

And if EVs aren't viable as an alternative to ICE, we'd just go back to ICE one way or the other. All EV are going to die.

It's a valid point so I don't see him simply as an ICE supporter. But as I think through his opinion, then it hit me about everything Elon has been tweeting:

1. FSD is everything. The value of TSLA is 0 if we can't solve it.
2. He can finally see a pathway in TSLA to becoming the most valuable company in the world... more than Apple and Aramco combined.

Throughout history, we humans have only ever resolved the lack of resources in one way: through technological advances to overcome production limitations. The other is waging war to fight for what's available.

And assuming that Peter is correct in his prediction, there isn't enough raw material to electrify the entire fleet in the world; at least we can't produce fast enough. We can either come up with entirely new technology to get more raw material, which is something that TSLA is already getting their hands on... but I don't think that's fast enough.

The other is FSD. If TSLA solves FSD. Cars will become exponentially more utilized. And therefore, we can live with the pace that new materials are being sourced.

Elon recently saw enough improvement on FSD that he now knows that FSD is within reach in the foreseeable future. Thus, even though he knows there aren't enough resources for every EV on road, he sees a clear path to a solution.

 

[Ogre]

Someone posted this above, but there weren’t many details. Someone elsewhere tipped me off to the location of the sighting. It is at the Rocklin Service Center.

Here’s an image I pulled up from street view.

It’s nose is parallel to the cage where they have the transformers and rectifiers for the Supercharger. The main service center is to the right of this image. The fairly distinct fencing on the left side of this image is visible behind the semi.

Rocklin is about 130 miles from Fremont, so the round trip is about 260 miles. It’s possible they top off at the Supercharger on site so the effective range could be lower than 260 miles. There is a small chance these cars were staged in Lathrop and they delivered from there since Tesla keeps a fair number of cars there as well.

It’s just nice to see these out and about and get a little real world beta on how far out Tesla trusts them to deliver.

 

[Drumheller]

Peter is not correct. That is FUD, much like people claiming the electrical grid cannot handle converting transport to EVs. Is oil renewable fast enough to stay with ICE or is there going to be a production issue with oil at some point?

I believe Elon's statement about value related to FSD is a comparison of exponentials. If FSD and AI make Tesla worth 100x what it would be worth without them, then it's relatively worthless without them. That's the framework of numbers and limits Elon works with.

 

[MC3OZ]

And assuming that Peter is correct in his prediction, there isn't enough raw material to electrify the entire fleet in the world; at least we can't produce fast enough.

I think if we assume Peter is just plain wrong, we stand a great chance of being just plain right.

Elon said there is no shortage of Lithium, just a shortage of Lithium processing.

We are going to get an update on March 1, which might include raw materials supply chains.

Sodium and even aluminium ions can be used for batteries, people discovering new types of batteries would not be a major surprise.

FSD is still very important and will result in less raw materials being needed.

There is a good chance that from time to time the raw materials ramps will lag demand and the price will spike, that usually results in more investment in supply.

 

[mrmage]

After finding out @phantasms has Ryan Reynolds as a neighbor, I'm really not sure what to expect from the posters on this forum anymore. Who knows - maybe you were a former Apple exec and is retired lol

I had Leonardo Dicaprio as my neighbor. For two days when he bought the house next our vacation rental. Guess that's as close to fame as I'll ever get

 

[mongo]

apparently TMC can't handled nested quotes.

It can

However

Only the top

Level is included

In replies

 

[NicoV]

The above for UK looks like a crossover in Q1 2025.

The below for Germany looks like a crossover in Q3 2024, well ahead of UK.

The crossover point in Belgium will probably be earlier, driven by an expected 80% EV in the company car market in H2 2023 according to the expectations of the car leasing companies, as I mentioned in
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
I wouldn’t be surprised if the 50% point was reached this year. Driven by:
- full electrification in the company car market due to tax changes in the first of July
- order rate of 30% EV in the company car market at the end of 2022
- overall slowing car market caused by private persons who will drive their current car as long as possible
- increasing taxes on ICE company cars (based on the average CO2 emissions in the Belgian car market, going down faster than expected due to better than expected EV sales)
If the prediction of the lease companies comes true, we’re going from 20K EV sales per year in 2021 to 20K EV sales per month at the end of this year.

 

[StealthP3D]

And assuming that Peter is correct in his prediction, there isn't enough raw material to electrify the entire fleet in the world; at least we can't produce fast enough. We can either come up with entirely new technology to get more raw material, which is something that TSLA is already getting their hands on... but I don't think that's fast enough.

I'm not following you here. Are you saying you actually think there's a chance there are not enough raw materials to electrify the global automobile fleet? It's not even close, there are enough raw materials to make 100 global fleets, all BEV's, but we only need one global fleet. It's really just a matter of how fast we can get them out of the ground and refine them.

It's a backwards argument because the technology that we factually know is not sustainable is fossil fuels. Even without the problem of CO2 in the atmosphere, we would simply run out of oil, maybe not in our lifetimes but, once it is burned, it's gone. On the other hand, the elements used to make BEV's can be recycled into new BEV's repeatedly. Batteries do not consume the metals used to produce them.

 

[Xepa777]

I was listening to Joe Rogan's podcast where he interviewed Peter Zeihan

Now, I don't know much about Peter Zeihan but listening through the podcast, I can tell that he isn't an EV supporter. And he based his belief in one point: we don't have enough resources to build what's needed and resource production do not come soon enough.

And if EVs aren't viable as an alternative to ICE, we'd just go back to ICE one way or the other. All EV are going to die.

It's a valid point so I don't see him simply as an ICE supporter. But as I think through his opinion, then it hit me about everything Elon has been tweeting:

1. FSD is everything. The value of TSLA is 0 if we can't solve it.
2. He can finally see a pathway in TSLA to becoming the most valuable company in the world... more than Apple and Aramco combined.

Throughout history, we humans have only ever resolved the lack of resources in one way: through technological advances to overcome production limitations. The other is waging war to fight for what's available.

And assuming that Peter is correct in his prediction, there isn't enough raw material to electrify the entire fleet in the world; at least we can't produce fast enough. We can either come up with entirely new technology to get more raw material, which is something that TSLA is already getting their hands on... but I don't think that's fast enough.

The other is FSD. If TSLA solves FSD. Cars will become exponentially more utilized. And therefore, we can live with the pace that new materials are being sourced.

Elon recently saw enough improvement on FSD that he now knows that FSD is within reach in the foreseeable future. Thus, even though he knows there aren't enough resources for every EV on road, he sees a clear path to a solution.

Yah we get it; we’re going to be swimming in pools of money if FSD is solved. But your comment comes in the eve of Elon saying version 11 (integration with highway stack) is “two weeks away” when a year ago he said almost the exact same thing. Tesla hasn’t even begun the march of 9s, which all other robotaxi companies (regardless of whether their approach is scalable or not) are actively trying to solve.


Imagine if for every million miles on a plane you statistically die. No one would fly. Currently on planes 0.1 deaths per 100 million miles. Robotaxis don’t have to be that good, but it has to be good enough that it’s not a serious considering when riding one. Tesla is nowhere….nowhere near that point.

“Improvement is exponential bla bla” I get it. We will see.

 

[petit_bateau]

For those on Twitter, I found this person to be pretty interesting. Someone earlier in the thread posted a link to a sub stack article they did and found that interesting too.

He's estimating $7.28 EPS for 2023 with an 11% drop in ASP. The thread describes how he comes to this number.

https://twitter.com/x/status/1612264635750821888

EDIT : for those not on Twitter, or those who prefer an article vs a thread, here's a link to the sub stack article:

What might Tesla's 2023 EPS look like?

Volume, Price Cuts, FSD, Semi, Energy, Interest Income

fallacyalarm.substack.com

The easy bit is to calculate an estimate for EPS of ~$7 in 2023. The hard bit is to figure out how the market will value that EPS and the corresponding growth rates.

If it is as blunt as a 40x EPS then a snap-upwards in share price to $295 awaits for end year, if there is no overshoot.

If it is more sophisticated, for example a 10-year NPV calculation at say 10% discount rate then a share price of $204 awaits, again assuming no overshoot.

The NPV version leaves the PEG ratio signalling wildly undervalued at 0.4 (square box !), i.e. even more undervalued than at end 2022 shareprice of $123.

Certainly Wall St has got its retaliation in first and hard on the matter of the recent rather savage PE compression.

Interest rates seem on track to peak in 2023, which in turn should cause markets to re-assess. Providing of course no wild stuff happens.

Whether all this might cause a rebound towards PE of 50-60 as he expects is of course debatable.

 

[gtrplyr1]

Tesla, as a company, is on fire. 40% growth YOY in a year that was incredibly tough for many reasons is astonishing. The product ramp and offerings are simply off the chart good and that just taking into account it's vehicles. Cybertruck is going to provide a brand new revenue stream as I'm convinced that it will NOT cannabalize too much of the existing ModelY or Model3 customers and actually many, with the available buying power, will have both.

Tesla's big problem is momentum .... when people were optimistic, the sky was the limit for this company. Unfortunately, people are far less optimistic about everything right now and momentum stocks tend to get crushed, as we have. There is no arguing that momentum played a HUGE part in getting TSLA to it's ATH.

I'm just hoping there are enough catalysts in the next few months to keep TSLA from falling much further and hopefully even finding some footing a few $$ above where we are now. I do NOT expect this stock to reach the ATH for several years at this point. I am fairly confident that we will reach the ATH's again at some point .... so I'll remain clinging to all of my shares and hoping for the best. Fortunately for me, my time horizon is long and I don't need any of this money for a while .... it still hurts as looking at our portfolio balance is something that causes much pain right now.

In a nutshell, TSLA's short term SP is probably out of Tesla's hands .... inflation numbers and FED reaction are probably more important than even FSD developments, production numbers, margins etc .... for now anyway.

I've been investing for close to 25 years now and I've always heard the phrase "You can't fight the FED" .... I guess I'm a bit slow but I get it now. Hopefully I'll take this lesson and sometime in the future it will save me the grief I'm experiencing now. Fed was raising rates and it was obvious that they had many raises in their strategy and I did absolutely nothing to protect my portfolio. Never again.


Cheers to the longs .....

 

[nativewolf]

But they didn't meet numbers in Q4. They were well below their October guidance of "just under 50%” for delivery growth. 40% is not just under 50%.

And that was with a monumental delivery and sales (price cuts) effort in USA and China and Europe .

 

[Thekiwi]

Sales “survey” of China Tesla stores over the weekend:

 

[Blue Mars]

The easy bit is to calculate an estimate for EPS of ~$7 in 2023. The hard bit is to figure out how the market will value that EPS and the corresponding growth rates.

If it is as blunt as a 40x EPS then a snap-upwards in share price to $295 awaits for end year, if there is no overshoot.

If it is more sophisticated, for example a 10-year NPV calculation at say 10% discount rate then a share price of $204 awaits, again assuming no overshoot.

The NPV version leaves the PEG ratio signalling wildly undervalued at 0.4 (square box !), i.e. even more undervalued than at end 2022 shareprice of $123.

Certainly Wall St has got its retaliation in first and hard on the matter of the recent rather savage PE compression.

View attachment 893849

Interest rates seem on track to peak in 2023, which in turn should cause markets to re-assess. Providing of course no wild stuff happens.

View attachment 893854

Whether all this might cause a rebound towards PE of 50-60 as he expects is of course debatable.

Price cuts globally in 2023 so earnings/vehicle will probably drop from 10k to about 6k. With 200M vehicle sold, earning is 12B, nearly same as 2022. How about that?

 

[OrthoSurg]

Should be everyone. The 3rd row folds flat and you don't lose much space to it folded flat vs the 5 seat. Now if they did the 3rd row treatment to the MYP it would be a resounding win. Fyi, I originally was buying a LR specifically for the 3rd row, but last minute switched to the MYP cuz power. If a 7 seat MYP would have been possible, that would be the one to get.

I was going for the performance originally in my head. However when I realized there was no option for 3rd row seats, I had to go with LR AWD because I needed a 7 seater for the kids so Tesla might lose some profit margins by not offering the performance option for 7 seaters.

 

[Nolimits]

Tesla, as a company, is on fire. 40% growth YOY in a year that was incredibly tough for many reasons is astonishing. The product ramp and offerings are simply off the chart good and that just taking into account it's vehicles. Cybertruck is going to provide a brand new revenue stream as I'm convinced that it will NOT cannabalize too much of the existing ModelY or Model3 customers and actually many, with the available buying power, will have both.

Tesla's big problem is momentum .... when people were optimistic, the sky was the limit for this company. Unfortunately, people are far less optimistic about everything right now and momentum stocks tend to get crushed, as we have. There is no arguing that momentum played a HUGE part in getting TSLA to it's ATH.

I'm just hoping there are enough catalysts in the next few months to keep TSLA from falling much further and hopefully even finding some footing a few $$ above where we are now. I do NOT expect this stock to reach the ATH for several years at this point. I am fairly confident that we will reach the ATH's again at some point .... so I'll remain clinging to all of my shares and hoping for the best. Fortunately for me, my time horizon is long and I don't need any of this money for a while .... it still hurts as looking at our portfolio balance is something that causes much pain right now.

In a nutshell, TSLA's short term SP is probably out of Tesla's hands .... inflation numbers and FED reaction are probably more important than even FSD developments, production numbers, margins etc .... for now anyway.

I've been investing for close to 25 years now and I've always heard the phrase "You can't fight the FED" .... I guess I'm a bit slow but I get it now. Hopefully I'll take this lesson and sometime in the future it will save me the grief I'm experiencing now. Fed was raising rates and it was obvious that they had many raises in their strategy and I did absolutely nothing to protect my portfolio. Never again.


Cheers to the longs .....

Agree with all your points. Don’t beat yourself up too much. If you didn’t sell, you will survive this mess. (That’s what I tell myself). Hopefully the FED will slow down and reverse course soon. Once the housing market starts to see a noticeable change, I think the fed will pivot. ATH could be early as 2024/2025. Just hodl and enjoy the show. By then, more factories will be ramping and CT headlines like “best selling truck of this (insert month here)” could be frequent..

 

[OrthoSurg]

Tesla, as a company, is on fire. 40% growth YOY in a year that was incredibly tough for many reasons is astonishing. The product ramp and offerings are simply off the chart good and that just taking into account it's vehicles. Cybertruck is going to provide a brand new revenue stream as I'm convinced that it will NOT cannabalize too much of the existing ModelY or Model3 customers and actually many, with the available buying power, will have both.

Tesla's big problem is momentum .... when people were optimistic, the sky was the limit for this company. Unfortunately, people are far less optimistic about everything right now and momentum stocks tend to get crushed, as we have. There is no arguing that momentum played a HUGE part in getting TSLA to it's ATH.

I'm just hoping there are enough catalysts in the next few months to keep TSLA from falling much further and hopefully even finding some footing a few $$ above where we are now. I do NOT expect this stock to reach the ATH for several years at this point. I am fairly confident that we will reach the ATH's again at some point .... so I'll remain clinging to all of my shares and hoping for the best. Fortunately for me, my time horizon is long and I don't need any of this money for a while .... it still hurts as looking at our portfolio balance is something that causes much pain right now.

In a nutshell, TSLA's short term SP is probably out of Tesla's hands .... inflation numbers and FED reaction are probably more important than even FSD developments, production numbers, margins etc .... for now anyway.

I've been investing for close to 25 years now and I've always heard the phrase "You can't fight the FED" .... I guess I'm a bit slow but I get it now. Hopefully I'll take this lesson and sometime in the future it will save me the grief I'm experiencing now. Fed was raising rates and it was obvious that they had many raises in their strategy and I did absolutely nothing to protect my portfolio. Never again.


Cheers to the longs .....

Once we hit the bottom, the numbers come back good and the momentum comes back, even if we can’t fight the fed, buyers will come back.