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

[TN Mtn Man]

You are speaking endlessly about pricing and ignoring costs. Nobody disputes there was a bigger premium for EVs 10 years ago. But that premium was there because costs were vastly higher.

The batteries on that Model S set Tesla back $50,000 - $60,000 and they sold them for $65k - $110k. The Mach E batteries might cost $12k tops and they are selling them for $50k. Ford has plenty of room for profitability in there.


If you want to talk about “advantage”, Tesla’s advantage is the fact that it takes a huge amount of engineering and legwork to get this right and Tesla had 10+ years to spread that engineering and legwork across. Because they squandered that time, Ford has to figure out how to cram that same engineering, materials sourcing, and infrastructure build out in 3 years while they are selling the product of less than 1 year of engineering efforts.


I agree with your first point though, Ford might indeed turn their ship around. But this idea that Tesla had “advantages“ and “had it easy” are ridiculous. Tesla was entering an industry against a wall of entrenched competition with 100 years experience crushing startups. “EASY” LOL.

Very true. But there was more to it than that. "Early Adopters" were key. Those with a high discretionary income that could spend the money on a vehicle with limited range. That had minimal charging infrastructure (Superchargers were very limited). That bought those cars not because they were the best value, but because they either liked the novelty, saw them as a step towards the future or wanted to make a statement concerning climate change. Not a lot different than early adopters of cell phones. We all owe the early adopters that made these industries possible.

Now the market is starting to shift. The industry is trying to appeal more to "mainstream", middle income and value conscious buyers. Tesla's recent price cuts are a major step in that direction. Still tough to sell a $50k MY to someone with a modest discretionary income that's looking for economical transportation when they can buy a Rav-4/CRV/Sante Fe or Equinox for $30. But-you can option up those cars and still end up well into the $40s, so you may well be taking sales from the higher-end versions of those cars-especially when the factor in the benefits of Tesla. Much easier to do with a $50k car than a $66k one. Still IMO have a ways to go-when a MYLR can sell for $40k with a good margin, you have a real animal for taking sales from legacy.

Now this is something that is somewhat regional. Some areas have a higher average wage scale, so selling "premium priced" cars is less of an issue. But in much of the country, and for a great many workers, value and price are driving factors in any purchase.

 

[Buckminster]

Paywall:
Subscribe to read | Financial Times
Buffet getting buffeted on the climate. If only there was a large US based corporation that could address this for him...

 

[Todd Burch]

It's also possible to acknowledge the obvious effects of climate change we already see around the world and the need to mitigate them starting yesterday instead of down playing them.

I think it's pretty obvious where Elon stands on that front.

 

[Todd Burch]

Who just bought *a lot* of TSLA and didn´t tell us beforehand?!! Admit it!

My social security check just arrived.

 

[mongo]

Very true. But there was more to it than that. "Early Adopters" were key. Those with a high discretionary income that could spend the money on a vehicle with limited range. That had minimal charging infrastructure (Superchargers were very limited). That bought those cars not because they were the best value, but because they either liked the novelty, saw them as a step towards the future or wanted to make a statement concerning climate change. Not a lot different than early adopters of cell phones. We all owe the early adopters that made these industries possible.

Now the market is starting to shift. The industry is trying to appeal more to "mainstream", middle income and value conscious buyers. Tesla's recent price cuts are a major step in that direction. Still tough to sell a $50k MY to someone with a modest discretionary income that's looking for economical transportation when they can buy a Rav-4/CRV/Sante Fe or Equinox for $30. But-you can option up those cars and still end up well into the $40s, so you may well be taking sales from the higher-end versions of those cars-especially when the factor in the benefits of Tesla. Much easier to do with a $50k car than a $66k one. Still IMO have a ways to go-when a MYLR can sell for $40k with a good margin, you have a real animal for taking sales from legacy.

Now this is something that is somewhat regional. Some areas have a higher average wage scale, so selling "premium priced" cars is less of an issue. But in much of the country, and for a great many workers, value and price are driving factors in any purchase.

Base MY is <$40k with federal rebate (excluding delivery fee, taxes, registration)

 

[AndrewZ]

Somehow gdp is still growing , and so is employment after a huge interest rate increases over the last year.
Pretty remarkable, and it feels like the mkt is celebrating today.
What’s wrong with growth ?

Seems like the economy can handle the historically-average interest rate level we're now at

Target rate probabilities just started moving up again for Fed meetings later this year, in other words the market is shifting again towards higher rates for longer.

 

[TN Mtn Man]

True. But Elon's opinion doesn't matter to these people anyway.

There are people that carry humanity along, and there are barnacles. Those people are barnacles.

There are people that can lead, motivate and convince people of a cause or position. And then there are those that can just insult and denigrate those that don't think as they do.

The beauty of Tesla/Elon? Yes, they have done more to reduce CO2 emissions than anyone or any company on the planet-and that's a great thing. But they also do the sensible thing-build a great car, one that is desirable for people that want a great car for it's performance, quality, cost effectiveness, etc. And not for virtue signaling. The "virtue signaling" approach would have us left with early Leafs and Bolts, where a few people would buy glorified golf carts to show how "green" they were. And people looking for mainstream transportation would avoid them in droves. If not for Elon-IMO there would BE no EV market now-what legacy was producing wasn't a compelling reason for people to switch to an EV. Too many compromises. And the virtue-signaling market was pretty well saturated. He has dragged legacy, kicking and screaming, into the BEV marketplace. Some have responded...better than others.

 

[indysurfer]

There is a very strong case to be made for burning more hydrocarbons today to achieve solutions that speed up the total conversion of our energy infrastructure to renewables and storage.
Musk has made many statements along these lines over the years and Tesla is doing more to implement actually useful solutions to long term climate change than any other company on earth. Ignore the hysteria.

Exactly.

Elon does not do the "cause" any favors by joining the rest of the Chicken Little's that are smearing paint and feces on works of art and shutting down city streets with their over the top zealotry.

Also, we need to factor in the costs of moving too quickly to reduce carbon energy that can cause massive human destabilization and suffering like war in Ukraine, famine in Sri Lanka etc. Germany foolishly shut down its nuclear power plants in a moral panic (and thanks to the war in Ukraine) are now generating more carbon emissions relying on dirty coal.

What are the millions of people in the Middle East going to do when their #1 economic driver is gone?

 

[spacerfc]

Polar bear to Musk: “Meet me on the shrinking iceberg at 6pm”.

https://twitter.com/x/status/1654324102415482880

Climate alarmism/extremism is a real thing, for example Extinction Rebellion demands UK to reach net zero in 2025, which is entirely unrealistic and if tried in reality would kill a lot of people. Elon Musk is acting as a responsible moderate/centralist here, this is especially important given it'd be in everybody's best interest for Republicans to buy EVs too, and trying to scare them to do that will only backfire.

 

[TN Mtn Man]

Base MY is <$40k with federal rebate (excluding delivery fee, taxes, registration)

Ture enough. But the industry needs to respond with those prices and not count on taxpayers to pay welfare for people to buy their products. They need to build a car that people will spend their own money on-not taxpayers. And Tesla did so when they hit the 200k cap and buyers received no subsidies-and they were selling everything they could make. Granted-market conditions have changed, as they always do.

 

[GhostSkater]

Looks like we might see Megapacks at Giga Texas pretty soon

https://twitter.com/x/status/1654495080273567757

 

[Cosmacelf]

This thread is fast becoming useless again. It has been taken over by discussing Elon’s tweets (theres a thread for that) and global warming (also a thread). Can we get back to TSLA investment topics?

 

[mongo]

Ture enough. But the industry needs to respond with those prices and not count on taxpayers to pay welfare for people to buy their products. They need to build a car that people will spend their own money on-not taxpayers. And Tesla did so when they hit the 200k cap and buyers received no subsidies-and they were selling everything they could make. Granted-market conditions have changed, as they always do.

A consumer paying less taxes is welfare?
It's not a refundable credit.
Making an incremental $40k to buy the car is still federal revenue positive in most income brackets.
If I don't get a Cybertruck, I don't get taxed on the funds I didn't need to withdraw from my IRA...

 

[M|S|M MYP]

Yay, we're up 4.3% today....hope this is the correct thread to post this

 

[Electroman]

On the contrary, I don't see him minimizing it. In fact, just the opposite. I think it *adds* credibility. If he acted like a nutcase, saying the glaciers would all be melted in 3 years, he'd have no leg to stand on.

It's possible to believe in climate change but also not believe that we're doomed in a couple years. What hope would that bring for humanity?

Note how he didn't say what length of time, short & long term means. People can interpret the way they want. To me short term is 5 years.. and long term is 50 years.. And with that he is spot on.

This shuts off the usual naysayers every winter when there is a blizzard and a snow storm.

 

[lafrisbee]

Somehow gdp is still growing , and so is employment after a huge interest rate increases over the last year.
Pretty remarkable, and it feels like the mkt is celebrating today.
What’s wrong with growth ?

I think the declaration by WHO that the Covid Pandemic is no longer a world issue bumped the stocks.

 

[Featsbeyond50]

Different departments and mostly unrelated skill sets.

I want the accountants pulled from their desks and put on the line.
I want Elon sleeping on the production floor.
I want tents popping up in the parking lot.

 

[thx1139]

Climate alarmism/extremism is a real thing, for example Extinction Rebellion demands UK to reach net zero in 2025, which is entirely unrealistic and if tried in reality would kill a lot of people. Elon Musk is acting as a responsible moderate/centralist here, this is especially important given it'd be in everybody's best interest for Republicans to buy EVs too, and trying to scare them to do that will only backfire.

The way so many people think they hear what he said and say see we dont need to do anything now we can do it later. They hear long term and think we can just go on the way we are doing things now and when the big problems arise we change then. When in reality it is compound problem. Everything we do now makes future change easier and less costly.

 

[Ogre]

On the contrary, I don't see him minimizing it. In fact, just the opposite. I think it *adds* credibility. If he acted like a nutcase, saying the glaciers would all be melted in 3 years, he'd have no leg to stand on.

It's possible to believe in climate change but also not believe that we're doomed in a couple years. What hope would that bring for humanity?

This is my feeling as well.

"World isn't ending tomorrow, it's ending the day after tomorrow."

Doesn't mean we can ignore the issue until it is an issue. Musk has said frequently and loudly that this is a problem and if we ignore it, it will be devastating.

In general, people need to stop reading too much into Musk's 280 character tweets.

 

[neverdone]

Base MY is <$40k with federal rebate (excluding delivery fee, taxes, registration)

I believe the $7500 Fed Tax Credit only applies against tax you pay; the EV tax credit is nonrefundable; only up to your tax liablity.
My married daughter with 2 children have a household income of $76K and their total tax for 2022 was $1700 (including $4000 for child tax credit).
Asssuming that their taxes will be similar in 2023 I believe their Fed EV tax credit would be $1700; not $7500.
I hope someone can tell me I am wrong.