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

[StarFoxisDown!]

You’re right of course, that Tesla inventory is Out if Cintrol, it’s almost a third of typical OEM dealer plus OEM. Appalling! The obviously has a crisis and needs to increase inventory /s
I did not disagree because I failed to realize Tesla needs to quit having such good performance!/s

good grief @StarFoxisDown! I thought you were paying attention!

Lol love the overreactions to my post.

Nowhere did I sensationalize the inventory levels as a crisis. I’m simply saying there’s an obvious issue with the relation of how quickly inventory is moving.

As @Moon Buggy said above me. There are limits to how Tesla has generated interest in their cars. Word of mouth has limitations. And as he said, it always best to be ahead of the game instead of reactionary to things.

Again, this topic is so frustrating because whether you’re on one side of it or the other, the attitude is all or nothing. I definitely do not think Tesla should be spending a lot on advertising. But I absolutely think there are strategic ways to advertise outside of things like Twitter to better inform the masses about Tesla’s and especially how low their ASP has gotten

 

[JRP3]

On another note, when you look at SOC vs Voltage on Tesla charging sessions, they are pretty much charging the vehicles as fast as they can, with the only way to improve that being lower resistance cells, so this is the moment we say hi to 4680s and tabless electrode

I don't know why you keep getting this wrong. Again, tabless can only mitigate what would otherwise be a slower charge rate in the larger cell.

 

[StarFoxisDown!]

Tesla living in the media rent free. Should we even need to pay for advertisement?

Tesla Drops Model Y Starting Price Below the Average US Vehicle

Elon Musk’s latest round of cuts has dropped his two best-sellers to uncharted territory.

www.bloomberg.com

The issue that some of us are saying is that there’s a huge % of the population that do not read Bloomberg or finance/wall st media outlets…they watch their local news, their sports, their shows. They have zero insight into what is happening. All they know is they can lease a brand new RAV4 for “X” price because that’s what they see advertised to them through their ways of consuming media/news and have zero clue a model y is just a cheap

 

[2daMoon]

This is not about stock price. My point is about awareness.

Or, seemingly, the lack thereof.

 

[EVNow]

Tesla living in the media rent free. Should we even need to pay for advertisement?

Tesla Drops Model Y Starting Price Below the Average US Vehicle

Elon Musk’s latest round of cuts has dropped his two best-sellers to uncharted territory.

www.bloomberg.com

I don't know ... this is what I'd do.

- Commission a private poll to figure out what new car buyers know about Tesla/EVs
- Figure out how to bridge any gaps in information that they find

More importantly
- Talk about what they are doing in ER, instead of just talking about price cuts and lowering GM. I mean if they are doing all this "data driven stuff" like some allege, why not talk about it in ER ?!

 

[StarFoxisDown!]

So if 936k mouths generated 1.3M orders the next year, what will 930k+1.3M mouths generate for 2023?

The flaw in this logic is that mouths generally only communicate with other mouths in their circle/bubble. Yes there’s some transition to another bubble/circle of mouths. But eventually that local network of mouths/circles dries up.

That’s the fundamental issue that some of us are pointing out

 

[khill]

How about you explain to me how Tesla's order books went from 4000/week to 40000/week without any advertisement?

What worked for 0 to 1M may not work for 1M to 3M. The undeniable fact is that a Tesla is objectively better in almost every way, and is also affordable compared to what other vehicles are in Model 3 and Model Y categories. And yet, people choose the other inferior products. This is not an affordability problem. This is an awareness problem. You can do a simple experiment- go to a Toyota dealership, and ask why they are choosing to buy a Camry or a Prius or a RAV4 or a Highlander instead of a Tesla and listen to what answer they give you. There is a real awareness issue among most people - they don’t know a Tesla is affordable and they also don’t know how much superior a Tesla is.

 

[AndrewZ]

You don't seem to understand where this discussion is founded. Few people will change their perspective, you just don't grasp what the perspective of most of us is. Tesla's management is better informed than any of us here. They have a great track record of being extremely analytical about this sort of thing.

A couple pages back @Gigapress expressed my perspective and I suspect the perspective of most of us quite well.



The team in charge of Tesla are fundamentally the same exceedingly competent people who got us here. Very little about this situation has changed that opinion. They have massive amounts of data we lack, like the exact state of inventories, where things are in transit, what the actual order volume looks like when a price change happens, etc etc.

"Reception Will Flip". Not a bit. I trust Tesla management today. If they decide to start advertising in 6 months, it won't reduce that trust.

I'd think of the discussions on here more as people trying to discern what the management team might be discussing/considering behind closed doors, because we have little idea what might be happening until it happens. But I haven't been following the advertising discussion closely enough to know offhand whether people are saying "I'll defer to management" rather than opining against Tesla advertising without really knowing what the team might be considering.

 

[Krugerrand]

My dearest @Ocelot you came all this way to try and be clever. Next time feel free to ask for help.

I wasn’t criticizing the OP, I was stating a fact about his personality, which you’ll note wasn’t denied by the OP. Anyone who would go on and on about the topic, even after being politely asked days ago to stop, most definitely would pontificate about what was wrong with any ads that Tesla might do, he literally can’t help himself. I sympathize and thus directed him to a place where his continued thoughts would be welcome.

 

[Motor Mouth]

Not that advertising disagreements aren't fun, but what I see as the next chess move from Tesla that can truly move the needle is to release something on the under-the-radar thus far stock buyback. While I'm not a huge fan, to me this is the one thing that would catch WS unaware and that WS absolutely loves. So, if or when the buybacks start, it could really reverse the relentlessly negative press. That and - if Elon's prediction that the market is likely to be down for the next year - a series of buybacks starting now (or maybe already started in Feb'ish) would be a solid perceived share value producer. Just a thought since we have heard crickets on that in the past several months.

 

[EVNow]

To me, it is easy enough to experiment with advertising. It will either work or it won't, and the company should know relatively quickly. To me, it is absurd not to try it.

Possibly ... but I think of this as a long term strategic decision to do infomercials about Tesla/EVs. Its a long term slow awareness increase rather than a quick ad to order ROI that you track daily (like I've done in some previous jobs).

 

[Cosmacelf]

Not listed here is the fact that all of those 0.31 accidents per million miles were people getting rear ended at stop signs because the NHTSA makes them wait for 2 days before rolling.

Actually, the latest release mostly fixes that. But I agree with the sentiment. Btw, I now hover my foot near the accelerator and give it a nudge when appropriate when using urban FSD.

 

[Captkerosene]

One of the biggest misconceptions about EVs is that the battery costs a ridiculous amount and has to be replaced every few years just like all other battery operated devices. It's hard for people to do the math when they don't even know what the variables are.

I wonder if an extended warranty plan might be a good idea for the battery? It could be like the plan I (foolishly) bought on a flat screen tv years ago. I made a claim on a tv that failed but the seller was able to replace the failed unit with a similar sized model at 1/3 the price I'd originally paid. In theory, we could warranty the battery for say twelve years and actually make money on units that fail during the extended warranty period. The time value of money and reduction in battery prices add up over the long term.

 

[StarFoxisDown!]

Possibly ... but I think of this as a long term strategic decision to do infomercials about Tesla/EVs. Its a long term slow awareness increase rather than a quick ad to order ROI that you track daily (like I've done in some previous jobs).

But the counter to that though is if you’re rapidly scaling production of a product that still needs a lot of education by a very large % of the population, you can’t be slow…you absolutely can’t be.

Again any advertising shouldn’t be “Look here’s the all new 2023 Model Y” like legacy auto does. There needs to be fundamental education on what the Model Y and how it better for you in so many ways.

Anyways, sorry to sidetrack the thread. I’ll stop responding. I just don’t get why a middle ground is so hard for both sides to come to here

 

[Ogre]

Tesla living in the media rent free. Should we even need to pay for advertisement?

Tesla Drops Model Y Starting Price Below the Average US Vehicle

Elon Musk’s latest round of cuts has dropped his two best-sellers to uncharted territory.

www.bloomberg.com

(In response to the article, not your comments)

I find these discussions of "Average cost of a US vehicle" exceedingly deceiving at this particular juncture. The past couple years were quite obviously a massive pricing bubble.

A little over a year ago, KBB pointed out that the "Average" vehicle price had risen an insane $13.9% between Dec 2020 and Dec 2021. During 2022, this number climbed even more. If you want a remotely sane discussion about "Average" prices, you should look at long term trends, not the gravy train the past couple years have been.

Personally, I think this is a huge part of the problem plaguing much of the Tesla price drop conversation. Everyone is talking about the price drops in the context of a bubble market, ignoring the fact that it was quite clearly an absolutely massive pricing bubble which could not be sustained. Industry wide vehicle sales are at the lowest level they've been in 8 years or so.

In my eyes Tesla's pricing updates is reverting to mean. They are the correct response to the end of a pricing bubble.

 

[Krugerrand]

I wear the disagrees with honor, have contemplated going back to the reaction history and tallying up all the disagrees on posts -- particularly from a select few -- where the content of that post ended up becoming reality.

Wouldn't be surprised to see Tesla start more conventional advertising later in the year and then suddenly the reception will flip

Fact #1 - Elon said YEARS ago that someday Tesla would likely need to advertise. Yes, he did. Surprise. Your idea isn’t new.
Fact #2 - Elon said that that advertising was likely not to be considered conventional by definition.
Fact #3 - Not a single person here has a clue when that ‘should’ happen, unless Andrew you work at Tesla and you’ve been in on upper management meetings.
Fact #4 - If only everyone were half as clever as they think, the human race wouldn’t be in this self created mess we find ourselves.

 

[EVNow]

Not listed here is the fact that all of those 0.31 accidents per million miles were people getting rear ended at stop signs because the NHTSA makes them wait for 2 days before rolling.

I know you were joking ... but Tesla is talking about more severe accidents with air bag deployments etc.

BTW, its beyond any doubt (from the numbers) that FSD + human is better than just human.

 

[Cosmacelf]

A little bit of inventory is expected but Tesla is now selling cars below the margins they told us they wanted to sell them at, so I believe there is clearly an issue right now.

It’s called a recession, which Elon has been warning us about for almost a year. ”selling cars below the margins they told us they wanted to sell them at” is exactly what a good company would do when facing changing economic conditions. This whole “Elon said X two years ago, so why’s he changing his tune now” is a BS argument for anything.

 

[replicant]

Tesla living in the media rent free. Should we even need to pay for advertisement?

Tesla Drops Model Y Starting Price Below the Average US Vehicle

Elon Musk’s latest round of cuts has dropped his two best-sellers to uncharted territory.

www.bloomberg.com

Who said Tesla should advertise on Bloomberg?

All the people around me

• who don't read Bloomberg
• don't follow the news closely
• aren't curious about cars and technology in general
• are fed up with all the scandals around billionaires
• continue to buy Lexus
• but have €€€€ to buy a Tesla

… would do well to get some facts about EVs and Tesla in particular. They know everything about the latest gadgets and gimmicks that are featured in the ads… I, personally, truly hate ads (I'm in sales and marketing, go figure). I keep hearing from friends and family that "maybe you're right" about the benefits of EV but they'll consider switching when enough of their acquaintances will finally buy a Tesla (nice catch-22!) or when they'll hear good pro-EV arguments in their news and media.

 

[bkp_duke]

A little bit of inventory is expected but Tesla is now selling cars below the margins they told us they wanted to sell them at, so I believe there is clearly an issue right now.

I think there will be advertising hold outs until Elon changes his mind. There are good reasons not to advertise, but I am overwhelmingly in favor of advertising personally. IMO, advertising will result in more vehicles sold even though it will not increase TAM. IMO, the benefits of educating more consumers about the benefits of Tesla ownership will more than offset the costs of doing so and would be far more cost effective than more and more incremental price cuts from this point.

Advertising is effective even with products that are far more pervasive than Teslas (e.g., Coca Cola, McDonalds, Apple, other automakers etc.). There's a reason almost everyone else advertises and it's largely because they're trying to sell more products and return more value to their shareholders. What are we looking for here, if not those two things? Besides, everyone knows what a Big Mac is, but my nurse just yesterday told me she'd never heard of a Cybertruck. My dad is a Tesla owner and shareholder and he is completely clueless about the price drops.

To me, it is easy enough to experiment with advertising. It will either work or it won't, and the company should know relatively quickly. To me, it is absurd not to try it.

No, you go back and LISTEN to what Elon said on the quarterly call.

Margins are decreasing because Tesla is doing what is needed to keep cars AFFORDABLE for people now that interest rates are higher. As Elon said - people care about monthly payment, not so much total price. You go up from 0.5-1.5% in rates to 5-7%, and the amortization changes DRASTICALLY so that people that could pay for the monthly over 5-6 years on a Model Y at 70k, can now only afford the car if it is in the 55k range.

This is all about macros, and Tesla is doing what is necessary to keep deliveries from slowing down during the macro downturn (where other autos don't care and will sell fewer cars).