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

[Dikkie Dik]

A short comment by Auke Hoekstra on MP3

https://twitter.com/x/status/1644034161441751040

Pleased to see Auke thinks the science behind it is solid.

I’m still processing

 

[Curt Renz]

MarketWatch: 3:10 pm EDT
Biden team on track for toughest-ever limits on auto pollution: report

Excerpt:

Administration officials will use Detroit setting next week to propose toughened emissions rules for auto model years 2027 through 2032

The Biden administration is reportedly days from proposing the toughest-ever U.S. limits on emissions from cars, SUVs and pickup trucks, but will likely stop short of a ban on gas-powered vehicles and a mandate to buy electric...

 

[TSLA Pilot]

Sorry to disappoint, but no... there were plenty of cars available in March, and Tesla kept cutting prices in their inventory listings, with most Model 3 variants getting "showroom adjustments" of £4,000-£6,000. I actually stopped by my *local* delivery centre on March 31st and the lot was full (hundreds of cars, see photos), despite their inventory page showing only a handful of cars available at that location. Tesla has close to 20 delivery centres in the UK, and the last ship from Shanghai docked in Southampton on 19 March, plenty of time to get the cars delivered if there were customers willing to take delivery.

It's easy to claim that Tesla has "infinite demand", but the truth is, while Tesla's vehicles see a lot more demand than similarly-priced cars, things like high interest rates and cost of ownership (as well as the current lack of EV incentives) are significant in the decision-making process of a potential car buyer.
View attachment 925286View attachment 925287View attachment 925289

Informative post, especially with all your photographs.

Makes one wonder why Tesla has yet to open their own international bank/fintech company so as to provide better-than-average loan interest rates for Tesla buyers, buyers who typically have well-above-average credit scores . . . .

They certainly have the money, and now (possibly) the inventory, and the rare repossession is really, really easy to pull off, eh.

In an environment of increasing interest rates, this sounds like a win-win-win for buyers, Tesla, and TSLA!

 

[Ogre]

MarketWatch: 3:10 pm EDT
Biden team on track for toughest-ever limits on auto pollution: report

Excerpt:

Administration officials will use Detroit setting next week to propose toughened emissions rules for auto model years 2027 through 2032

The Biden administration is reportedly days from proposing the toughest-ever U.S. limits on emissions from cars, SUVs and pickup trucks, but will likely stop short of a ban on gas-powered vehicles and a mandate to buy electric...

I’m super cynical this will have any real effect on anything.

Every time they come out with this kind of regulation they seem to end up exempting the US auto pickup/ giant SUV business. The fact that they are in Detroit signing this suggests to me that they will continue to walk that fine line of feigning environmental concern, while passing protectionist legislation.

More important, law doesn’t even start to go into effect for 4 years? What does the market even look like at that point? I’m not sure I 100% buy into JPR007’s full theory here, but it’s pretty clear newly manufactured emissions spewing vehicles are going to be far less common in 4 years than today. By the time this is phased in fully by 2032, it seems incredibly unlikely “tailpipe emissions” on new vehicles will be a major concern.

(Source Tweet)

 

[growler23]

MarketWatch: 3:10 pm EDT
Biden team on track for toughest-ever limits on auto pollution: report

Excerpt:

Administration officials will use Detroit setting next week to propose toughened emissions rules for auto model years 2027 through 2032

The Biden administration is reportedly days from proposing the toughest-ever U.S. limits on emissions from cars, SUVs and pickup trucks, but will likely stop short of a ban on gas-powered vehicles and a mandate to buy electric...

Stopping short of a mandate might be a good idea. The anti-EV comments I see often fall under the "well, the government is forcing these EVs down our throats, but I'll keep my VW/Corevette/whatever as long as I can". If these standards are very high, by the time they go into effect (2027), EV's, often already cheaper TCO-wise, will be cheaper upfront-wise as well, almost across the board. Folks will buy EV of their own volition and immediate self interest. Heck, even GM might be selling them for a profit by then

I see it as an open question as to whether anyone other than Tesla will have the charge network to back up the massive EV volume on the road by that time, but if the other charge networks don't step up, Tesla will undoubtedly continue its nascent efforts in the US open up to outsiders to cover them, at a modest profit. As noted here, supercharger network growth is quite robust these days and is planned to continue as such.

Avoiding the mandate aspect might keep at least a certain amount of the reflexive backlash down. At least my optimistic brain hopes so.

 

[Krugerrand]

At least it is consistent across the board, i would be much more upset if everything else was up except $TSLA

Hmmmmm. Yeah. Ok.

 

[Krugerrand]

Interesting development at a Tesla Killer...

https://twitter.com/x/status/1643353256977141762

He may have been laid off.

Not to be mean, but yes to be mean because look at TSLA SP; if all the other Lucid employees believe what he wrote then it’s no wonder the company is in trouble. Fantasy world much?

 

[Krugerrand]

What I am fed up about is this: the manipulators pushed for and got the SEC to allow MM sales of shares, not located or borrowed (circa 2001 ) and allowed these "fake shares" to be "sold" on down ticks (removal of uptick in 2007). With this combination of rule changes, the major brokerages positioned themselves to (almost) never lose. The only opportunity for the suckers to win, is the infrequent situation where a 10% daily downward move, forces the manipulators to short only on neutral- and/or upticks. So, GS admits to mistakenly shorting stock on downticks when they are legally barred from doing so. In case you aren't aware, GS and other large brokerages founded and continue to run FINRA. If one does the math on the number of "mistakes " and assume a reasonable per-trade dollar amount, it is absurdly ridiculous that $3M is GS's view of the potential damages. This has been going on for years. Can anyone tell me when the last quarter was that GS actually lost money in their "trading" unit?

According to @EVNow it didn’t happen this way. Just an innocent software bug.

 

[insaneoctane]

So they sold a big chunk end of 2016. Interestingly, TSLA started going up quickly in 2017. But it wasn't until 2020 that it went bananas.

Here’s the wisdom:

IPO	$1.13
Toyota investment	$50,000,000
Shares	44,247,788
		Value
Highest 2016	$17.70	$782,964,602
Lowest 2016	$9.58	$423,805,310
All time high	$409.97	$18,140,265,487
Today	$185.06	$8,188,495,575

 

[kbM3]

Tesla reaped the benefits of being a first mover.
They acquired the Fremont site for next to nothing and inherited quite a bit of production equipment. Their capital spend to launch model S was somewhere around $400 million. Early model S was pretty rudimentary; no AWD, no parking sensors, squeaks and rattles. Buyers were willing to overlook all that because it was the only long range vehicle on the market (apart from the roadster).
I think the window of opportunity on scaling an BEV startup in North America has already closed. It took a first mover advantage and Musk’s superhuman focus on cost control and capital efficiency to scale Tesla.
Lucid and Rivian are unlikely to survive as independent companies.

You listed the advantages Tesla had back in 2008 compared to Rivian & Lucid, but left out the disadvantages:

1) Battery costs > $1k / kWh
2) EVs weren’t proven, so it was nearly impossible to raise capital. People threw gigantic sums at Rivian & Lucid.
3) EVs were considered a complete joke. As in a golf cart for the road. There was basically zero demand.
4) There was no charging infrastructure at all.
5) The supply chain was not established for EVs.
6) Top tier suppliers didn’t believe in EVs and wouldn’t even return calls.
7) There were no successful EV companies to hire from, while both Rivian and Lucid’s were able to draft a lot of ex-Tesla talent.

What Tesla pulled off was one of the greatest miracles of all time, largely because of the courage, conviction, vision and genius of Elon and the people he was able to attract. Believe me RJ Scaringe and Peter Rawlinson would have IMMEDIATELY failed had they started back then, just like the other hundreds of U.S. auto startups that failed before Tesla.

 

[Krugerrand]

Tesla reaped the benefits of being a first mover.
They acquired the Fremont site for next to nothing and inherited quite a bit of production equipment. Their capital spend to launch model S was somewhere around $400 million. Early model S was pretty rudimentary; no AWD, no parking sensors, squeaks and rattles. Buyers were willing to overlook all that because it was the only long range vehicle on the market (apart from the roadster).
I think the window of opportunity on scaling an BEV startup in North America has already closed. It took a first mover advantage and Musk’s superhuman focus on cost control and capital efficiency to scale Tesla.
Lucid and Rivian are unlikely to survive as independent companies.

While you’ve listed the positives of first mover, you’ve failed to list all the negatives that Tesla also navigated that Lucid and Rivian did not.

The reality is most companies fail or they quickly reach their limits of growth becoming quaint, local or niche.

What Tesla has accomplished under Elon and all the employees that played significant roles in various departments is quite literally a gobsmacking miracle of epic proportions the likes of which human history has rarely seen.

That other people; Rawlinson, Sampson (Faraday anyone?) et al thought they could best or even just duplicate Tesla’s magic is a testament that their hubris makes Elon’s look like mouse nuts.

They’re all going to fail at the attempt. A couple may survive as quaint, local or niche. And for the record, I and some others here called it years ago.

Edit: @kbM3 and I were separated at birth.

 

[Words of HABIT]

Here’s the wisdom:

IPO	$1.13
Toyota investment	$50,000,000
Shares	44,247,788
		Value
Highest 2016	$17.70	$782,964,602
Lowest 2016	$9.58	$423,805,310
All time high	$409.97	$18,140,265,487
Today	$185.06	$8,188,495,575

I believe you are missing the stock splits. At the time just after Tesla IPO Toyota acquired 3% of Tesla, selling end of 2016. Current TSLA market cap at time of writing this post would have Toyota's share today at $18.2 billion. ATH over $40.0 B. There. I don't feel so bad now.

Toyota sells all shares in Tesla as their tie-up ends

Toyota Motor Corp said on Saturday it had sold all shares in Tesla Inc by the end of 2016, having cancelled its tie-up with the U.S. luxury automaker to jointly develop electric vehicles.

www.reuters.com

 

[Krugerrand]

Rivia

This chart is as much a testament to how differently a company is run by an owner operator versus one run by a person who is spending other people's money.

That said, a lot of this is also simply the fact that Rivian and Lucid came to the market 10 years too late. Tesla enjoyed a near monopoly in EVs for a long time. Even once competition came in from Nissan, GM, and BWM, it was half-hearted at best. Rivian and Lucid entered the market right as the major, well funded players were entering it and long after Tesla had become a big success.



This is the action of a founder who has self-financed the business. Rivian is dropping $5billion on their factory. Tesla? $17m

Rivian was founded in 2009
Lucid was founded in 2007

So, I would say not 10 years too late. Additionally, they both poached numerous Tesla employees with vast knowledge and experience, which helps make up a lot of the timing difference.

Tesla didn’t start hitting the dart board until well into 2013 and even then that year was a struggle and a half.

 

[Tony73]

You listed the advantages Tesla had back in 2008 compared to Rivian & Lucid, but left out the disadvantages:

1) Battery costs > $1k / kWh
2) EVs weren’t proven, so it was nearly impossible to raise capital. People threw gigantic sums at Rivian & Lucid.
3) EVs were considered a complete joke. As in a golf cart for the road. There was basically zero demand.
4) There was no charging infrastructure at all.
5) The supply chain was not established for EVs.
6) Top tier suppliers didn’t believe in EVs and wouldn’t even return calls.
7) There were no successful EV companies to hire from, while both Rivian and Lucid’s were able to draft a lot of ex-Tesla talent.

What Tesla pulled off was one of the greatest miracles of all time, largely because of the courage, conviction, vision and genius of Elon and the people he was able to attract. Believe me RJ Scaringe and Peter Rawlinson would have IMMEDIATELY failed had they started back then, just like the other hundreds of U.S. auto startups that failed before Tesla.

FWIW, Tesla never paid $1k per kWh for cells. A model S85 would have had $85k in cells at that price. Tesla launched model S with consumer grade cells from Panasonic that cost about $140 per kwh.
I agree with everything else you said
Tesla’s success is one of the greatest stories in the history of capitalism and attributable to Musk’s vision and drive.
When I say Tesla had a first mover advantage, I certainly do not think anyone could have started a car company in 2004 and succeeded.

 

[Krugerrand]

Do we know when Toyota sold?

Yes.

Way too soon.

 

[2daMoon]

FWIW, Tesla never paid $1k per kWh for cells. A model S85 would have had $85k in cells at that price. Tesla launched model S with consumer grade cells from Panasonic that cost about $140 per kwh.
I agree with everything else you said
Tesla’s success is one of the greatest stories in the history of capitalism and attributable to Musk’s vision and drive

Don't forget the best part.

Despite the mind-blowing achievements so far...

... they are still very much in the 'getting started' phase, once all aspects of Master Plan 3 have been taken into account.​

 

[Words of HABIT]

3 percent
It's important to note that Toyota owned some 3 percent of Tesla for a time, which it paid just $50 million for. Nov 8, 2022 (Inside EVs).
Toyota spokesman Ryo Sakai said the company had sold all of its shares in Tesla as of the end of 2016, part of a regular, periodic review of its investments, after it had initially sold down a portion in 2014.Jun 2, 2017 (Reuters)
($18.2 B at current market value.)


10 percent.
Speaking about how 4 years ago in 2009 Mercedes-Benz parent company Daimler acquired nearly 10 percent of Tesla, and gave it a much needed hand in a very difficult time, Musk revealed the irony. Jan 14, 2023 (Torque News)
But that ended in 2014 when Daimler stopped its powertrain supply contract with Tesla and ended up selling its stake in the company for $780 million – a healthy profit on a $50 million investment.Oct 29, 2018 (Electrek )
($60.7 B at current market value.)

Yes, I am feeling much better, thank you.

Edit: added dates/Sources for above quotes

 

[Cosmacelf]

You listed the advantages Tesla had back in 2008 compared to Rivian & Lucid, but left out the disadvantages:

1) Battery costs > $1k / kWh
2) EVs weren’t proven, so it was nearly impossible to raise capital. People threw gigantic sums at Rivian & Lucid.
3) EVs were considered a complete joke. As in a golf cart for the road. There was basically zero demand.
4) There was no charging infrastructure at all.
5) The supply chain was not established for EVs.
6) Top tier suppliers didn’t believe in EVs and wouldn’t even return calls.
7) There were no successful EV companies to hire from, while both Rivian and Lucid’s were able to draft a lot of ex-Tesla talent.

What Tesla pulled off was one of the greatest miracles of all time, largely because of the courage, conviction, vision and genius of Elon and the people he was able to attract. Believe me RJ Scaringe and Peter Rawlinson would have IMMEDIATELY failed had they started back then, just like the other hundreds of U.S. auto startups that failed before Tesla.

Awesome list. Agree 1000%.

 

[TSLA Siempre]

https://twitter.com/x/status/1644080173623435264

JB nominated to be on the BOD. Excellent news.

 

[MountainRatMat]

Threads of the day #2:
EV and Battery Credits
All discussion of Rivian Automotive
VTOL Supersonic aircraft
Tesla Master Plan Part 2 & 3
Gigafactory locations and products

Uhhhh....you mean threads of months ago? I only clicked on the Rivian thread but the last post in it was February 28th. I'll skip clicking on the other links.