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

[unk45]

Indeed, doesn't eligibility for the full $7,500 IRA rebate also depend upon the buyer having a certain taxable income? As we work our way down to these lower-$$, higher-volume levels we will reach a point were people are perfectly happy with a $3,750 rebate because they would not be paying enough in Federal Income Tax to benefit from a higher rebate.

For other folks, getting a $1,000 instant cash discount on their shiny new 3SR may be more attractive* than waiting until next year to get a slightly larger rebate.

Clever market placement! But I'll wait to hear from @unk45 before I decide...

Cheers!

*'specially if you put that $1K into TSLA

I agree with you, as I usually do. I’d only add that Tesla finances are predicated on a very fast cash conversion cycle. It is that which allows them to have high growth rate with INCREASING free cash flow. Give that strategy it is quite logical to use incentives to balance shipping/logistic inconsistencies. Gross margins also benefit from improving materials costs and decreasing shipping costs. Many of us probably do not know how consequential shipping costs and delays actually are. Those are a major reason for localized production.

We’ll know in another few days what impact there was from shipping and vehicle location issues. Thus far the data has been unclear. I will not be surprised to so reduced Gross Margins but I will be surprised if Free Cash Flow is much lower. On the surface it seems direct lease are lower, and, if so, that directly improves the P&L thanks to the vagaries of GAAP.

Overall I’m optimistic but beyond the previous paragraph I’ll just wait impatiently.

 

[jerry33]

Ummm, unit issue there?

Likely that means fully loaded, not tare weight.

 

[jerry33]

I wouldn't be surprised to see a SpaceX/Tesla collaboration on shipbuilding. Fact is that Musk will need to sharpen his sword on the naval domain anyway because Starship soon will require the construction of offshore launch platforms. SpaceX already has a few vessels of various types. And Musk has expressed some conviction about the naval domain recently.

The counterpoint is that shipbuilding has a lesser impact on the mission (as described in the MP3) and I wonder whether Musk Inc. can bring enough new to the table to make the effort/reward worthwhile on a comparative basis.

An electric ship would cut the number of personnel needed during the voyage. (RoLo size ship)

 

[mongo]

Likely that means fully loaded, not tare weight.

6,500 pounds is a decent curb weight guess, 1,000 more than X and allows the 3,500 pound payload without crossing the 10k GVWR rating which triggers a lot of regulation changes (especially if used commercially).

6,500kg = 14,300 lbs - 3,500 payload would be 10,800 curb.
[Hummer EV is 9k curb, 10.5k GVWR, 3k in the pack]
[Cybertruck may crack 10k though: Report: Tesla Cybertruck Will Be a Heavy Duty Truck – Here Is What It Means In Terms of Efficiency, Safety, and Weight]
[Or they lower payload to stay out of class 3]

 

[Singuy]

There’s the direct impact on car loans themselves but higher rates have knock-on effects throughout finances: existing lines of credit are more expensive, homes are more expensive to buy, etc

I believe inflation has more of an impact on spending allocation for a typical family than interest rates. Interest rates are here to cause deflation and we already see a pretty solid shift in housing. Interest rates going from 4 to 6% has pretty negligible impact on the monthly payment vs house prices doubling in price. This is the part on the podcast when Musk said "stormy weather ahead" as we see high interest rates and high housing prices at the same time as interest rates lags behind price adjustments. Give it a few quarters when we see solid deflation especially in housing, then the household will be able to free up more budget for a luxury car.

I mean if we are only decreasing prices to 2020 levels to weather this transition while selling 2M cars is one hell of a win in my book.

 

[GhostSkater]

Ummm, unit issue there?

Yep lol

Thanks, hate working in two systems at the same time

 

[FreqFlyer]

At the beginning of this year, US Model Y production was around 400,000. By this time next year it should be closer to 700,000 - 800,000.

I'm pretty sure prices are going to have to come down even more in order to move that many more vehicles. Maybe that means we get an SR model at $45k, or maybe the whole lineup moves down again.

THIS! While increasing production lowers unit costs that production has be sold to someone. Only Tesla knows the rate of orders coming in, and this action gives one a glimpse on orders.

 

[M|S|M MYP]

Is this price cut announcement the news that Tesla china analyst was referring to as something big is happening this weekend at GIGA Shanghai?

 

[Singuy]

It'll be interesting to see if there's any push back on the federal IRA incentives, because I have a feeling the numbers being produced out of the guidance so far will absolutely destroy the original projections in terms of how many vehicles will qualify for the credits and what it will cost

Original analysis from the Congressional Budget Office had an $85million impact from the tax credits in 2023, which observers had calculated to just over 11,000 full $7500 credits or a larger mix of $3750 & $7500. If vehicles like the usual Model Y trims and F150 Lightning qualify for the full credit, on top of a swath of vehicles apparently qualifying for $3750, those numbers are a massively huge underestimation.

Source: Inflation Reduction Act seeks to jumpstart electric vehicle market | DLA Piper

Talking about this being the INFLATION REDUCTION act. People point the EV tax credit part to be some kind of a shoe in for the green new deal in disguise. However as Tesla is gaining majority of the benefits, essentially making the most popular branded car cheaper by 7500 dollars, this automatically created a price war which should lead to reduction in car prices across the board if legacy auto didn't have so much production problems right now. So yes they may keep it just to reduce inflation and starts deflating car prices.

 

[Krugerrand]

After saying you wouldn’t discuss it any further you posted 13 more times… I appreciate your tenacity and you’re allowed to push back against the bullish narrative, but I think more than enough has been said on UK inventory and pricing at the end of Q1, so let’s not restart this discussion in the morning. I hope you had a good night’s sleep, despite of going to bed at 3.45 AM

I feel I had it under control. Who knew he’d start typing with his toes!? But shortly after the warning of his toes then head, he went to bed.

 

[Krugerrand]

Why do people not read the TMC autopilot/ FSD subforum ?

Not wanting to risk getting sucked into a cesspool of negativity and toxic hate - like some of those other threads turned into.

In truth, we’ve had enough postings in this thread to grasp it’s a mixed bag for people; as it has been since day one of FSDB.

 

[unk45]

Finally some competence coming to the BoD - top guy JB is

By now this post should have had >100 Loves! Since I read this in my materials this AM I have been elated! He will be invaluable in many areas, battery issues chief among them.

 

[Krugerrand]

By now this post should have had >100 Love!.

Why? The comment implies nobody else on the board has been competent. I disagree.

He’s a great addition, no doubt, and keeps the right kind of order *we* all need.

 

[FreqFlyer]

I doubt that there is an easy / quick option.

It depends on what is happening with the Roadster.

A new common platform for Model S/X and Roadster is possible.

But I would not divert engineering resources away from Gen3 or a van to do this.

Model S/X and Roadster are lower volume models, that probably limits the capex and resouces that are justified short term.

Things like a move to a 48v architecture, new motors or a new battery pack might not involve major capex and may yield significant savings.

Depends on sales of S/X. Elon stated years ago, S/X sales are not important to the bottom line and he is right. Though these products have a lot of margin built into them, there is going to come a time when the market will want something new. Will Tesla think its worth the R&D is the question as you stated.

IMO
1. The X has served its purpose and Tesla would be better served revenue wise to make a true 3 row product that is bigger than the X but at a more approachable price. Think Kia EV 9 type product. Maybe this product appears as a "van".

2. The S and Roadster market can be combined. There really is not much the Roadster can do that a S built on a stiffer platform cannot. The S stays the Flagship pioneering new technoloy, battery or otherwise. Sure there is some way to have all those waiting for "free" roadsters compensated.

All of these products will of course benefit from the gen 3 lower cost of production.

 

[AndrewZ]

I believe inflation has more of an impact on spending allocation for a typical family than interest rates. Interest rates are here to cause deflation and we already see a pretty solid shift in housing. Interest rates going from 4 to 6% has pretty negligible impact on the monthly payment vs house prices doubling in price. This is the part on the podcast when Musk said "stormy weather ahead" as we see high interest rates and high housing prices at the same time as interest rates lags behind price adjustments. Give it a few quarters when we see solid deflation especially in housing, then the household will be able to free up more budget for a luxury car.

I mean if we are only decreasing prices to 2020 levels to weather this transition while selling 2M cars is one hell of a win in my book.

The cumulative effect of interest rates across finance is likely what creates the real tightening and it flows through everything, but yeah that is the point and what leads to disinflation/deflation.

Decreasing prices to 2020 levels needs to be juxtaposed against commodity prices that are still elevated compared to 2020 and likely higher labour costs, without knowing how exactly the former flows through to procurement. But when prices were low in 2020, Lithium futures were at 30-50,000 CNY/T and all commodities were much lower.

• Copper started 2020 at $2.80, dropped almost down to $2.00, now over $4
• Iron spent 2020 in the $80s, has fluctuated a lot since but currently $120
• Aluminum started 2020 at $1800, dropped to $1500, now $2300
• Nickel at $13.5k, dropped to $10.8k, now $22.7k
• Zinc (also might impact stainless steel prices) started 2020 at $2300, up to $2400, dropped to $1800, now at $2700
• Lithium started 2020 at 54k, went as low as 38.6k, currently at 217.5k (peaked at almost 16x but still almost 6x the low)

Labour costs will be a huge part and this is all offset by efficiency of scale since 2020, but I'd be conservative about what it'll mean for near-term cost and margins

 

[GOVA]

Tesla does advertise and does it well. They do it so well that the scum-media don't get a penny out of it.

Those who did not notice it are another story.

Tesla advertises with their great products, not by buying out the mob with cheap flicks showing them how cool they'd be with sub-par ICE car.

 

[jerry33]

Tesla does advertise and does it well. They do it so well that the scum-media don't get a penny out of it.

Those who did not notice it are another story.

Tesla advertises with their great products, not by buying out the mob with cheap flicks showing them how cool they'd be with sub-par ICE car.

Advertising means, to many people including me, traditional media advertising. What you're referring to is marketing. Tesla does a great job of marketing.

 

[Rarity]

Tesla does advertise and does it well. They do it so well that the scum-media don't get a penny out of it.

Those who did not notice it are another story.

Tesla advertises with their great products, not by buying out the mob with cheap flicks showing them how cool they'd be with sub-par ICE car.

This is a very salient point emphasized by von Holzhausen in his recent interview. I don't think the interviewers liked it because of course this is bad for their business.

 

[unk45]

Why? The comment implies nobody else on the board has been competent. I disagree.

He’s a great addition, no doubt, and keeps the right kind of order *we* all need.

True enough. My elation comes from several different subjective observations:
-The first descriptions I remember of battery use for massive grid stability and support for solar, wind and legacy leaker plants came from JB around 2012 UIRC. I did not search for the date.
- He led the cell testing, quality control and component strategies for his entire Tesla career.
- with Redwood Materials he’s made excellent progress in recycling economically as well as refining crucial materials.

Frankly my enthusiasm is not so much in his role as a Director but deepening his role with Tesla battery technologies.

I am not denigrating other directors in any respect. They all have different strengths. JB is the only non executive director who provides core technological expertise with a manufacturing focus.

Please do not say “nobody else…has been competent! I made no such implication.
Are you getting enough sleep?

 

[wipster]

Likewise.

Mine came from eTrade.