I'm regretting my decision to do dry January.....
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Xepa777
Banned
Why do "demand worries" have to be a construct of people who want Tesla to fail? Does Rob Maurer want Tesla to fail, because he's been pointint out Tesla China demand problems since early December and he has connected sources there.
Maybe you should lay off the "us vs. them" hyperbull mentality of spinning everything positive. If there was no demand problem, Tesla wouldn't have lowered car prices as much as 15%+ on some models. Acknolwedging reality is important. I remember the "30% margin narrative" defense being brought all early half of last year + 2021, when Elon smashed that by saying he'd rather sell cars at negative margin (vs. posts I read here this month that talked about 60% margins for the Model Y post-price cut lol).
There is a definite demand cap with cars at $60k, $50k, and even $40k. The mass market for vehicles is closer to $25k. Whether Tesla gets there with a future platform, with used Teslas, or with Robotaxis revolutionizing cost of ownership perspectives, Tesla has never shied away from that mass electrification challenge. Which is what you're saying with the rest of your post, which we all agree on. But mixing realities with rose-colored statements is just as bad as $TSLAQ.
But we're on a Tesla investor forum where everyone hopes for infinite riches from the stock, so these perma-positive statements like yours are always met with praise and upvotes.
Gigapress
Trying to be less wrong
I don’t believe that 1.8M guidance for production. That makes no sense at all, unless that was based on assuming extended factory shutdowns and a total failure of Berlin and Texas to ramp up more.
Q4 production 440k —> 1.76M annualized
Berlin and Texas should be ramping hard this year. Fremont is putting out well below its nominal 650k annual capacity, since it’s currently in the mid-500s right now if you subtract known Shanghai and somewhat known Berlin/Texas production numbers from known total global production.
Shanghai has had two months of 87k and 88k production after the line upgrades. Say it’s not going to improve and it’ll be operational 49 out of 52 weeks in ‘23. That’s 1.0M just from Shanghai. Add in Fremont and we have about 1.55M just from these two.
So, does anyone believe Ber/Tex are going to combine for just 0.25M this year? That’s only 2.5k per week each, and both factories are already achieving 3k per week, at least for burst rates.
Q4 production 440k —> 1.76M annualized
- December holidays at all the factories
- Production rate of Berlin and Texas at the end of the year was higher than the overall Q4 average, because they’re ramping
Berlin and Texas should be ramping hard this year. Fremont is putting out well below its nominal 650k annual capacity, since it’s currently in the mid-500s right now if you subtract known Shanghai and somewhat known Berlin/Texas production numbers from known total global production.
Shanghai has had two months of 87k and 88k production after the line upgrades. Say it’s not going to improve and it’ll be operational 49 out of 52 weeks in ‘23. That’s 1.0M just from Shanghai. Add in Fremont and we have about 1.55M just from these two.
So, does anyone believe Ber/Tex are going to combine for just 0.25M this year? That’s only 2.5k per week each, and both factories are already achieving 3k per week, at least for burst rates.
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Elon has admitted to making mistakes before (his brother telling Elon something about stabbing himself in the leg and NOT needing to also twist the knife), so yeah. But his answer just confirms that he doesn't think he made a mistake in being political.
It's called being conservative. If that's the guidance they want to give (which is still within 50% CAGR from 2020's results), then just more power to the management team.
Elon very clearly said that they are aiming for 1.8M but if things go well they could hit 2M.
We don't know what the bottleneck is. They did say that it wasn't going to be battery cells. But, maybe there is some specific parts that they won't be able to get enough of to produce more.
Just want to add my opinion after hearing the earning call.
I believe this is a prime example of “be greedy when others are fearful”. As Tesla becomes the only (at least in volume) player growing in the tough macro condition, it marks the point where Tesla said as recession develop, so will the margins.
The idea is simple. All the suppliers who have spare supply, whether due to increased production given newly invested production or lack of orders due to bad macro are going to fight for those who can still absorb new material input. As Tesla continues to grow its productions, they will have a much greater negotiating power with suppliers. Further driving down the coast and increase margins.
This is where I think the newly negotiated line of credit comes into play. Tesla certainly has cash to fund its day to day operation. But by committing a greater order on supplies, and new Giga factories, they are able to achieve negotiating powers that no other players in the EV sector is able to do. The legacy automakers continue their journey with tiny batteries just so that they can satisfy IRA requirements. This, imho, is going to come back and bite them so hard as this is clearly a very short sighted play. They should instead, do as many full ev as they can in order to expand its battery needs.
Once the recession is done, Tesla is going to come out as a player that not only produces, but consumes most of the supplies in related parts. And if you are a supplier of say, cells or chips, who are you going to give the best price to? A legacy maker who only takes peanuts of your total production? Or an industry behemoth that devours almost everything you can make?
I believe this is a prime example of “be greedy when others are fearful”. As Tesla becomes the only (at least in volume) player growing in the tough macro condition, it marks the point where Tesla said as recession develop, so will the margins.
The idea is simple. All the suppliers who have spare supply, whether due to increased production given newly invested production or lack of orders due to bad macro are going to fight for those who can still absorb new material input. As Tesla continues to grow its productions, they will have a much greater negotiating power with suppliers. Further driving down the coast and increase margins.
This is where I think the newly negotiated line of credit comes into play. Tesla certainly has cash to fund its day to day operation. But by committing a greater order on supplies, and new Giga factories, they are able to achieve negotiating powers that no other players in the EV sector is able to do. The legacy automakers continue their journey with tiny batteries just so that they can satisfy IRA requirements. This, imho, is going to come back and bite them so hard as this is clearly a very short sighted play. They should instead, do as many full ev as they can in order to expand its battery needs.
Once the recession is done, Tesla is going to come out as a player that not only produces, but consumes most of the supplies in related parts. And if you are a supplier of say, cells or chips, who are you going to give the best price to? A legacy maker who only takes peanuts of your total production? Or an industry behemoth that devours almost everything you can make?
Yeah I wish one of the analysts had brought this up. Sometimes I don't understand what the analysts even do on these calls.
Gigapress
Trying to be less wrong
Well sure but 1.8M cars would mean 2023 will be the first time ever that Tesla spends an entire year not growing vehicle output whatsoever. That’s just ludicrous, especially with Tesla also guiding for continued production growth at Berlin and Texas and flat production at Shanghai. They are giving implicitly contradictory guidance. It is mathematically impossible for both statements to be true.
Which makes me wonder if they dropped the price too much. You want to keep your price just enough for the demand to exceed production by about 10% and not more..
I remember Elon letting out a little laugh when he articulated a bit on the production target. I think he had to hold back from sharing a more optimistic goal, perhaps due to the ongoing litigation? Don't know.
Yup, doesn't make a lot of sense, however they conveyed it's a conservative guide. What happens when Tesla loosely guide aggressively with their 50% yoy growth? All we hear is miss miss miss miss miss miss miss miss miss miss@ 1.31M
Not if you want to squash competition and exert dominance.
This is so in character when you recall Elon saying he couldn't even see a distance number 2 with a telescope.
But it's the official guidance that they will be held to, and they've set themselves up for success.
What a cool graphic. Some points:
- Service cost & revenue is a wash, which exactly jibes with Musk's contention that they will not make Service as a profit cost center.
- Energy made a small profit 0.1B over 1.3B revenue = 7% profit. So this puts to rest the astronomical claims of 50% profit on Megapacks by some internet Tesla enthusiasts.
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StealthP3D
Well-Known Member
That you even consider it a possibility that Tesla would enter the small-scale wind market makes me realize how little you understand how Tesla makes business decisions.
There is zero chance Tesla would ever enter the market that is small scale wind and the chances of them going into large wind turbines is almost as small. The former should be clear based on nothing more than the unfavorable physics/economics of small-scale wind and the latter because Tesla has never publicly entertained the idea of manufacturing wind turbines and there is no new information to lead us in that direction.
It's also unclear to me why you are suggesting that Elon's stance of including wind alongside solar has changed as of late. As long as I can remember, Elon has always included wind alongside solar and nuclear when it comes to displacing fossil fuel generation. Nothing has changed, and it's unclear why you are suggesting it has.
Agree it seems like heavy sandbagging, but they did stipulate that the 1.8m number assumes a force majeure event/s that limits max production (after experiencing that for several years in a row in some way or another). Elon maybe couldn’t help himself with revealing the true goal of 2 million during the conference call.
They are playing it safe for a change. Whenever they give the guidance they expect but then miss it even in the slightest bit, no matter what the reasons, Wall Street punishes them hard.
I think the fact the Tesla team has realized this and is now understating everything they do is a huge boon. Shows they realize how stupid the market and all these "guidance" numbers truly are.
Those of us who really know what Tesla is doing realize how silly 1.8 million for 2023 is, but let Tesla give these super conservative numbers to the "analysts" who don't know any better. Beating "expectations" is always better when it comes to Wall Street.
Sandbagging for the win, looking forward to Q4 2023!
2daMoon
Mostly Harmless
I'm wary of keeping company with resolutionaries.
On the bright side, you are only a few days away from February!
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It's only been a couple of weeks. Give them at least a couple of months to see how it shapes up, if not a whole quarter.
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