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

[Krugerrand]

Who knows. Maybe this is the quarter GM finally cracks that nut and cranks out 1000s of Hummers and LYRIQs. Eventually they are going to figure this out right?

Eventually? Right?

See post #414,200, the one ^

 

[unk45]

I have a few friends who are business owners, and they all prefer leases. I believe it’s a tax accounting issue; it allows them to write off the entire cost of the vehicle as a business expense, while always having a relatively new vehicle.

Historically at least, leasing in most of NA and European countries only has been financially logical when there were tax justifications, including the popular company cars as employee benefit that is dominant in several countries, although less so in the US.

Oddly, perhaps, the US, in particular, has also had widely popular leasing for less creditworthy customers. For those captive finance companies and others have long offered leases that often use higher 'capitalized cost' frequently as much as 125% of MSRP, coupled with high 'money factor' (i.e. interest rate usually driven on rule of 78's) and restrictive use terms sometimes coupled with forced place insurance. These are the purest form of ripoff, unintelligible to the vast majority of buyers, even some who are financially sophisticated. These tactics permit financing of 'under water' trade ins and very high F&I profits.

So, basically there are tow entirely different leasing types. One for those who can use lease payments as business expenses and those who are too gullible to know better. The twain do not usually meet.

Tesla does the business focussed kind.

To be sure there are variants. BMW Finance in the US has long offered 'single payment leases' that have very, very tight ricing because they actually finance only the residual value, but have the entirety recorded with typical terms of a two or there year lease. I have used those products myself several times. When tax rules such as MACRS happen, these buyers generally opt for year end cash purchases.

Tesla has thus far not had the capacity for such specialized techniques but they definitely should, because cruel design for tax management can and does generate very high quality lead returns plus high value initial sales. For Tesla the biggest challenge is to design such products in such a way that third parties assume residual risk and credit risk. There are specific ways to manage those issues in each market.

During the Shareholders meeting Elon responded to a shareholder question about insurance mentioning the State level insurance rules, and the inherent complexity that causes. Tesla has been learning very quickly, even including, for example, the arcane California restriction on use of driver monitoring.

Next, they need very quickly to learn all about tax driven leasing products. These have arcane elements, always arcane. The March 2023 update, FASB 2023-1 shows the reality. Look it up if you're prepared for severe boredom. Thus far Tesla has been quite conventional in it's approach. Now, when demand limits are appearing these products can make huge differences in key fleet, small business and entrepreneurial markets.

Tesla do need expertise, quickly. If they remain as is they'll repeat the same silly mistake advocated by a poorly informed retail investor who suggested ten year loans, already stupidly offered by Tesla in Spain. Tesla historically has not even scratched the surface in final products. Only in conventional US auto insurance are they beginning to understand. They very urgently need to understand how to create incentives that do not destroy shareholder value.

Finally, we can only hope that Ms. Yaccarino really understands 21st century marketing, specifically the deployment of very precise and accurate targeting of prospective buyers. That will enhance shareholder value and customer value. General advertising destroys shareholder value and gross margins but does win Advertising awards and generates exciting trips to beautiful places with beautiful people. Frankly, I think Elon understands that, as do several others. In the meantime he also understands shareholders, both institutional and retail. For those categories of investors it seems to have become time to offer 'advertising'. Entities such as Raytheon, General Dynamics, Boeing,et al understand their constituencies are politicians ho expect 'Advertising' so they do comply. TSLA needs to do the same, careful lacemnst so those constituencies will not feel so unhappy that they harm TSLA. For exactly that reason it probably is time to spend some money on those presently anti-TSLA entities that only need some incentive to be less obstructionistic.

All of this is part of TSLA growing up to be an even more major OEM. This is all very hard. Just as is manufacturing hard, so is this kind of marketing. In manufacturing everyone around thinks all the traditional OEMs are the experts; just as in space Boeing and so on are obviously the rocketry experts. The core reality is that Elon has led SpaceX and Tesla to great heights. The next moves, from Starlink to Cybertruck and other new vehicles, have come to need a vastly more refined approach to marketing. Very, very few have managed that successfully.

Here are three examples of masterful marketers: LVMH, Airstream (a division of Thor, not independent, but quite Tesla-like in many respects), Zara. Two of the three do advertise, but both LVMH and Zara understand the markets for their products and very carefully nurture their buyers. Not coincidently, all three of them are best known among their targeted buyers and not so much elsewhere. There are many other examples, but these three manage to maintain high margins in generally low margin categories (obviously, LVMH has numerous very exclusive and non-exclusive brands).

I did not include Apple, but only because that one is so well known that everyone seems to think they know how APPL managed to generate most all the profits from each of its categories. In fact from 2012 TSLA has emulated APPL by building a seemingly impenetrable ecosystem. TSLA has built Superchargers and comprehensive software integration. They have both done the hardest job, creating a durable ecosystem. None of my other samples have done quite that trick.

Still, Zara is more vertically integrated than is anyone else in the fickle women's fashion market and keep building in what seems to be an impossible market. Airstream has long had Airstream Parks, cultivates passionate owner loyalty and is nearly invisible to people outside their market, formidable for those who are. LVMH is a model of brand and product discipline, with ironclad adherence to their management process. Notably two of the three are dominated by a single decision making process.

The real message I'm trying to convey in this post is that there are no simplistic solutions. Those who scream ADVERTSE, build awareness, are well meaning but are not considering the fundamental importance of value vs price vs cost. Those are three different issues. Tesla does need to change prices tactically, every one of my examples does that. The best do it in a vastly different way than do auto dealers who compete with each other on nominal price while relying on deception F&I to generate profits margin on sales.

 

[lafrisbee]

Today is a monthly expiration day for TSLA options. More interest than a weekly, but less than a quarterly. Triple Witching comes next month. My survey of today’s expiring TSLA options activity suggests that $180 would be the most profitable closing target for large option writers (hedge funds & market makers) with the ability to temporarily manipulate the TSLA share price.

I only have Max-pain available to me. And from it I see roughly $178.50
EDIT: But with the unusual volume today that might not be "desirable" by themm.

 

[Krugerrand]

Yep I think this is about right but it is costing them sales and in particular I'm not sure that S and X are destined for the robotaxi fleet. 'Robo-premium' going to be a thing?

Having said that the Tesla folks should be able to articulate that this is the reason for the Tesla policy. Not "I don't know why we do this", which is what was said. So a Taycan got purchased over a Plaid. Great for the mission, less great for Tesla IMO.

And as I said a day or so ago, Tesla not only sells their own EVs, but they’re selling every other OEMs EVs as well. It’s really a win-win situation.

Hope buddy likes his Taycan, especially when he gets his butt handed to him by a Plaid drag racing, but more importantly at the next charging station.

 

[Curt Renz]

Ionly have Max-pain available to me. And from it I see roughly $178.50

Max-Pain posts are based on the previous day's closing open interest for options. I take into account the Friday trading volume reported by early afternoon.

 

[Ogre]

Getting ready to push a bunch of pigs off my mountain to see if they can fly. Next week I try dogs.

When we got married wife and I decided we were together until pigs fly.

I do not wish you luck in this endeavor.

Also, in case it wasn’t obvious, I share your Skepticism regarding GMs production aspirations.

 

[Knightshade]

The 450 mile number is an EPA estimate. Hasn't actually been measured yet since the truck does not exist yet.

Chevys statement is that 450 is the EPA certified range.

2024 Chevy Silverado EV Has an EPA-Estimated Range of up to 450 Miles

Following EPA certification, the fleet-oriented Work Truck's range exceeds Chevy's earlier estimate of 400 miles.

www.caranddriver.com

the new 450-mile figure is the result of EPA certification.

GM still shows their Silverado WT (for fleet and commercial sales only) is coming Spring 2023. I wonder if this was a typo. But I’ve seen this estimate elsewhere.

In the release about the range increase, GM claims to still be “on track to launch in the spring of 2023.”

I wouldn't expect any significant # of em of course.

 

[Ogre]

How many will they produce with a 200kwh battery when they have a battery supply issue?

When people talk about missed deadlines, I point out that the Hummer is a perfect example of why Tesla was 100% correct missing their deadline on the Cybertruck.

Hitting a deadline so you can have some sort of Pyrrhic victory lap impresses people for a few days but leaves a bitter feeling with your customers. The Tesla haters and GM fans love to bang on about how GM and Ford delivered while Cybertruck was late, but ultimately GMs choice to push out incomplete and money losing products will bite them in the but.

Jury is still out on Ford, but I don’t think either the Hummer or the LYRIQ have won over and fans for GM.

 

[FSDtester#1]

They are leading the way.

And it matters...

 

[Huskyf]

Don't speak too soon...timing of this is impeccable

View attachment 939194

For me it's the creep mode

 

[betstarship]

Deutsche Bank 'encouraged' by Tesla following tour of Texas Gigafactory By Investing.com

Deutsche Bank 'encouraged' by Tesla following tour of Texas Gigafactory

au.investing.com

Deutsche Bank reiterated a Buy rating on Tesla (NASDAQ:TSLA) and maintained their 12-month price target on the stock at $200.00 after hosting investors in Austin for a guided tour of the electric automaker’s Texas Gigaplant. They also held meetings with the company’s Head of IR Martin Viecha and Director Travis Axelrod.

Analysts were, once again, impressed with the plant, which they say is “well designed and runs very efficiently, and is clearly making good progress in ramping up both vehicles and battery cells volumes, and in installing tooling for Cybertruck.”

The analysts wrote in a note, “All in, we came away encouraged that Tesla could deliver cost improvements and efficiencies in the quarter ahead which may help offset some of the pressures, but we still worry the company may have to take additional price cuts in a weakening environment, which could put further pressure on earnings. Mid-term, Tesla confirmed that it is working on developing two new models on its next-gen platform and represent its highest priority at present. We are also encouraged by the targeted combined unit volume of 5 million and we remain bullish on the opportunity presented within the next-gen platform.”

 

[madodel]

As otherwise posted it’s already in Tesla’s Tunein.

Unless Tunein works some other way that I'm not aware of, if you lose cell and WiFi reception you lose all streaming. That's the reason Congress is getting involved. AM radio would be a source for emergency news pretty much wherever you are. Any streaming requires cell/WiFi reception. I gave up my AM radio when I upgraded to MMC2, but I rarely used AM so no loss to me thus far. Though when the 2 mile wide meteorite hits I might not know it until I'm pulverized. But would I care to know it?

 

[jerry33]

So you're saying Gordo is 100% right!!

Well, I thought that manipulation was the regularly scheduled program, so he at least got that part wrong.

 

[madodel]

I am quite perplexed about that. I, Tesla driver since 2012 and investor since 2013 with more shares than either of those have never been invited to any Tesla event, ever. So sad, all I have is all those shares, split and so very volatile, still with periodic steller rises that keep capital gains a potential issue, if I ever sell.

Neither Black nor Gerber act like HODL, but we do. I guess that’s why verbose bloggers and institutional types always are invited. They all love advertising, it’s good for their wallets even if bad for Tesla’s.

Have you ever verified your shareholder status? Tesla SSO - Sign In

 

[Curt Renz]

Toyota waves the white surrender flag.
Jalopnik through Yahoo - this morning:
Toyota Says The World Is 'Decades' Away From Supporting An All-EV Market

 

[Curt Renz]

Telegraph through Yahoo - this morning:
Tesla closes gap on Britain’s biggest carmakers as sales surge

 

[M|S|M MYP]

According to sources close to the matter...

Or did Gordo get hacked?

 

[Ogre]

Jalopnik through Yahoo - this morning:
Toyota Says The World Is 'Decades' Away From Supporting An All-EV Market

Article is surprisingly not too far off the mark. Better than I would expect from Jalpolink.

Toyota is saying what Toyota needs to say in order to not look like complete idiots. Still possible Toyota dark-horses their way in at the last minute and retains their seat at the table, but really starting to look like the ICE sales death spiral has begun so they don’t have much time.

 

[GhostSkater]

How many will they produce with a 200kwh battery when they have a battery supply issue?

Anything over two is growth

 

[Singuy]

Powell’s tanking the market,
Also GOP abandoning debt ceiling talks

What exactly was said that has people concerned?

I am looking at the CME fed watch tool and the chances of a rate pause during next meeting went from 50% to 80%, and a 0.25% raise went from 40% down to 18%. The fed will do exactly what the market predicts so to me whatever that was said signaled the end of rate increases.

CME FedWatch Tool - CME Group

Count down to the next Federal Open Market Committee (FOMC) rate hike with the CME FedWatch Tool, based on the Fed Funds target rate. View the tool.

www.cmegroup.com