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

[Fred42]

Today I received an e-mail from "Shareloft" that looked like junk mail. Fortunately before deleting it I looked it up and found it was Rob Maurer.

 

[Southpasfan]

What really upsets me in this case is, there are hundreds of people who were wrongly incarcerated and later released after serving harsh sentence in a maximum security prison where prisoners are treated like dogs by both the authorities and by other incarcerated criminals. When they get acquitted and released after a few years or in some cases after a decade or two, they don't get awarded this much.

But this $135M the jury initially awarded for name calling is a huge travesty. All this after the company took action and fired the perpetrators.... and get this... the victim even encouraged his son to join Tesla. If he is so emotionally scared, would he recommend his son to join Tesla?

You're right. But the travesty isn't the $135m for name calling, the "travestry" if you want to use that term, is that when the only penalty is money, and the payor of the money is an entity, one of the instructions would be that a jury has to make the penalty high enough to get the defendant to actually notice.

It has nothing to do with a comparison of the injured party v. another injured party.

This is why, for example, (a) McDonalds gets hit big time for hot coffee when there is an internal memo that says its cheaper to burn some number of people and pay them $5k a pop then it is to lower the temp of the coffee, (b) traffic tickets in Sweden (Norway? somewhere up there) are tied to income, so some rich dude gets a $100K speeding ticket for 10 mph over the limit etc, etc.

The problem is when you are talking about behemoth corporations, that they will not alter conduct unless you make the economic penalty high enough.

In law school there is about a day of debate in remedies class where you consider whether these payments ought to be made to, say, a charity instead of the plaintiff, but that has its own problems, such as whether people will actually bring cases without the possibility of large recovery.

Really, its a classic illustration of a flaw in a civil justice system which is really based on capitalism. But the comparison of being wronged by the state v. being wronged by an incredibly rich company is only a small part of it, and not the main part.

 

[FSDtester#1]

I am going to award you the Comedy King of TMC. !!

Make it Techno King, we know already that @ZeApelido is EM's incognito account here on Tmc, and he loves Twitter Joe.

 

[Electroman]

The EV numbers both GM and Ford just put up for Q1 are shockingly embarrassing. Mach E sales especially should be scaring the hell out of any Ford investor

Is there a side by side graph by quarter of Mach-E sales vs. Model3/Y sales? I would like to share that with a troll (not in this forum) that has been annoying me for sometime

 

[Artful Dodger]

What those two do share is the ability to have a nearly unique cash conversion cycle, which means they actually have increased cat flow as they grow more quickly.

I see what you did there.

Cheers!

 

[Ogre]

You're right. But the travesty isn't the $135m for name calling, the "travestry" if you want to use that term, is that when the only penalty is money, and the payor of the money is an entity, one of the instructions would be that a jury has to make the penalty high enough to get the defendant to actually notice.

The penalty was excessive even in this light. No company is going to ignore a $1m fine for racial discrimination. It would be too easy for follow up litigants to leverage.

Maybe if there had been previous legal action that was ignored it might make sense. This was just ridiculous.

 

[ZsoZso]

I agree with this and hope an entire ecosystem, where Tesla takes a significant market share and proliferates their tech, comes to fruition.

https://twitter.com/x/status/1643238224154750979

That person sounds like a closet-TSLAQ advocate.
Talking about EV market being like Android market vs Smart-phone market, i.e. no clean winner of vast majority of profits (Apple), but then he posts a graph including plugin-hybrids ?!?!
Look, squirrel !

Because the graph of EVs would actually look like smartphone market with Tesla dominating even in unit sales let alone profits (remember, legacy companies are selling EVs at a loss still as we recently learned from the Ford release).

 

[Maarten]

Tesla ramping up for a start in Turkey in 2023.
Model Y configurator (Design Studio) has now gone live there.
License to operate Superchargers has been obtained.

Tesla launches Design Studio, Superchargers in Turkey

Tesla launched its Model Y Design Studio in Turkey and has also opened several new Supercharger locations within the country.

www.teslarati.com

​

 

[Dikkie Dik]

OT, but great if true:

https://twitter.com/x/status/1643204168511897602

 

[UkNorthampton]

Tesla ramping up for a start in Turkey in 2023.
Model Y configurator (Design Studio) has now gone live there.
License to operate Superchargers has been obtained.

Tesla launches Design Studio, Superchargers in Turkey

Tesla launched its Model Y Design Studio in Turkey and has also opened several new Supercharger locations within the country.

www.teslarati.com

​

Several of the Superchargers in Turkey are open to other EVs, allows driving from an unfashionable island in North-West Europe* to Turkey, at least to Ankara, with future sites to follow.

* or ...Northernmost in Arctic Circle (Honningsvåg, Norway), down into Africa (Agadir & Marrakesh Morocco)

 

[Gigapress]

Anyway the trend is clear enough for now and as @Gigapress rightly points out this is fantastically different and better than any other mass market automaker.)

Farzad Mesbahi found a chart with data from Cox Automotive showing days of inventory by brand.

https://twitter.com/x/status/1642989958305816577

I went and found the source directly from Cox. Full article worth reading.

The total U.S. supply of available unsold new vehicles stood at 1.80 million units at the end of February, compared with an upwardly revised 1.75 million vehicles at the end of January. Supply was up 68% from a year ago, or 730,000 units higher.

Days’ supply was 56, down two from the end of January but up 21 days compared with the end of February 2022. Historically, a 60 days’ supply across the industry had been considered normal and ideal.

While inventory is up substantially from 2022 levels, it remains low by historical standards. At the end of pre-pandemic February 2019, the total supply was 3.78 million vehicles for a 115 days’ supply.

It’s unclear to me whether this data is just for inventory sitting at dealerships or if it also includes vehicles in transit. This uncertainty does muddy the comparison because Tesla’s inventory number is mostly vehicles in transit that already have customers ready to take delivery shortly after arrival. Even so, the next-closest brands have almost double the inventory as Tesla, despite Tesla’s recent increases in their end-of-quarter reported inventory numbers. Inventory is another area where Tesla is not only the industry leader but an outlier on the curve.

I expect Tesla’s inventory as measured by days of sales won’t increase very much from here, because they’ve been unwinding the wave for almost a year now, the Q1 data point suggests the trend is slowing, and the continued ramp-up of Berlin and Texas will reduce the average shipping time from factory to final delivery.

 

[Buckminster]

Threads of the day:
Tesla Litigation Department
Dogecoin
Tesla Network / Robotaxi Business Model
The demise of the OEMs Is it worse than we thought? Can't sell ICE or EVs?

 

[Rarity]

The penalty was excessive even in this light. No company is going to ignore a $1m fine for racial discrimination. It would be too easy for follow up litigants to leverage.

Maybe if there had been previous legal action that was ignored it might make sense. This was just ridiculous.

In the end, it may be much less than even $1 million. Following the judge's ruling on the original award, Tesla could be on the hook for as little as $350k. Assume the attorneys take 40%, leaving the plaintiff with $210k. Assume federal and local taxes of 40%, leaving the plaintiff with $126k for his troubles.

The attorneys could take away as little as $140k. The plaintiff was represented by at least four different law firms. In that scenario, the law firms lost immense amounts of money on the trial.

 

[Ogre]

Cybertruck production has exceeded Hummer production this quarter. I know... it's "Beta" production. But only fair since GM announced they'd started production and their first "delivery" when their production was clearly not ready for actual sustained production. Arguably... Hummer production is still in Beta LOL.

Going to go out on a limb and say Hummer will never out produce Cybertruck again.

Anyone want to take the other side of that bet?

 

[mongo]

I'm sorry because I think you are reading the slide deck incorrectly. I don't see how I can be reading it that incorrectly given that we know the quarterly inventory numbers.

View attachment 924845

However I'm not concerned about the inventory. Really it seems fine by me.

For simplicity using the arithmetic mean of the #d inventory at EOQ one gets (3+4+8+13)/4 = 7 days average inventory throughout the year. So Tesla started the year with about 3d of inventory; finished the year with 13d of inventory; and averaged 7d of inventory across the year. You can get slightly different numbers if you use #vehicles (either using the numbers above, or using the cumulative P/D numbers), but not that different.

Now strictly speaking these were last day of quarter inventories. Quite what the inventory levels were during the quarter we have little insight into. Going forwards however the in-quarter inventory will (should) be very similar to the end of quarter inventory. Provided that stays low-ish (at whatever is optimal) that is fine by me. Anything less than 20 would be outstanding.

Not seeing how I can be reading it incorrectly:
Global vehicle inventory (days of supply): 16

The number is End of Year inventory/ deliveries for year, not averaged quarterly inventory.

With your number:
70,249/1313851*300 = 16.04
Since everything is ramping up, this gives a more pessimistic number (for those who prefer low in-transit figures), but does show a somewhat uniform trend over time.

 

[Stretch2727]

Cybertruck production has exceeded Hummer production this quarter. I know... it's "Beta" production. But only fair since GM announced they'd started production and their first "delivery" when their production was clearly not ready for actual sustained production. Arguably... Hummer production is still in Beta LOL.

Going to go out on a limb and say Hummer will never out produce Cybertruck again.

Anyone want to take the other side of that bet?

ok i agree Cybertrck will quick pass the Hummer but they are still producing Hummers. This article says 500 in Feb. There is a sales freeze right now due the battery water ingress issue.

GMC Hummer EV Deliveries Have Absolutely Cratered This Year

The GMC Hummer EV has had its fair share of issues, but a stop sale relating to an improperly sealed battery means very few satisfied owners.

www.thedrive.com

 

[unk45]

Farzad Mesbahi found a chart with data from Cox Automotive showing days of inventory by brand.

https://twitter.com/x/status/1642989958305816577

I went and found the source directly from Cox. Full article worth reading.




It’s unclear to me whether this data is just for inventory sitting at dealerships or if it also includes vehicles in transit. This uncertainty does muddy the comparison because Tesla’s inventory number is mostly vehicles in transit that already have customers ready to take delivery shortly after arrival. Even so, the next-closest brands have almost double the inventory as Tesla, despite Tesla’s recent increases in their end-of-quarter reported inventory numbers.

I expect Tesla’s inventory as measured by days of sales won’t increase very much from here, because they’ve been unwinding the wave for almost a year now, the trend seems to be slowing, and the continued ramp-up of Berlin and Texas will reduce average shipping time from factory to final delivery.

The reported data is Vehicles held in dealer inventory, which can be slightly variable depending on OEM transfer policy. Although usually nonmaterial sometimes OEM's do place vehicles with dealers for resale without transfer to the dealer. That is uncommon and happens usually when large unsold inventory has accumulated. Since the pandemic US dealer inventories have significantly reduced, especially for popular models, due to production drops.

Recently these data have been mostly a reflection of model popularity, so models being discontinued and/or with poor reputations are problematic. For example 2022 Dodge Challenger and Charger and Jeep Compass all are in plentiful supply. The easiest way to know why DOH varies so much si to look at the Automotive News incentive charts.

Manufacturer Days on hand is harder to see with reliability since an habitual practice is to avoid 'completing' a slow moving vehicle by not installing some part so keeping it in WIP rather than inventory.
There are many tricks, including sending inventory as demonstrators, 1970's style lease and buyback contracts and so on.

TSLA does not do any of those things so Tesla DOH is unlike any other OEM. They actually disclose directly what is happening. Imagine that!

 

[Rarity]

OT, but great if true:

https://twitter.com/x/status/1643204168511897602

Looks like we could have some legal drama on this, which may push the launch back for an indeterminate amount of time. In this case, SpaceX would probably use the delay time to put in a water deluge system.

 

[Nocturnal]

That person sounds like a closet-TSLAQ advocate.
Talking about EV market being like Android market vs Smart-phone market, i.e. no clean winner of vast majority of profits (Apple), but then he posts a graph including plugin-hybrids ?!?!
Look, squirrel !

Because the graph of EVs would actually look like smartphone market with Tesla dominating even in unit sales let alone profits (remember, legacy companies are selling EVs at a loss still as we recently learned from the Ford release).

Not closet, actual. He blocked me for saying that he had a preconceived notion about Tesla. So not only a Tesla hater, but also a thin skinned one.

 

[betstarship]

That person sounds like a closet-TSLAQ advocate.
Talking about EV market being like Android market vs Smart-phone market, i.e. no clean winner of vast majority of profits (Apple), but then he posts a graph including plugin-hybrids ?!?!
Look, squirrel !

Because the graph of EVs would actually look like smartphone market with Tesla dominating even in unit sales let alone profits (remember, legacy companies are selling EVs at a loss still as we recently learned from the Ford release).

Yo Zso-Zso, Benedict Evans has a fantastic resume and over 320k followers on Twitter. He's generally known as an excellent futurist and trend-finder. I appreciate your opinion