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

[Artful Dodger]

This is a fairly significant bit of news. Keep in mind once the production process is established they stated it should be a fairly straightforward cut and paste process to implement the same production line across all giga factories. When production starts I'll look forward to the ramp that should follow over the next several years

There was a rumor circulating in the Tesla blogosphere a few months back that Tesla might be setting up a Model 3 assemblyline inside the existing Giga Texas factory. This never made sense, since Model 3 is a sedan and this would be building out surplus capacity vs. its long-term demand (think what Model 2 will do to demand).

It makes much more sense that Tesla has been setting up a trial "unboxed" assemblyline at Giga Austin over the Summer, and that is the prototype for the production lines that will be built at Gigas Mexico, Shanghai, and Berlin. Tesla is even now filing planning permits with German authorities for the Giga Berlin expansion, and as we know, China is FAST (I'd expect just 1 year from pencils down to cars out). Giga Mexico remains the wildcard, if local authorities are slow-rolling permits, they'll just get bypassed (then they can watch from the outside as Tesla unboxes Gigafactories around the world).

Cheers!

 

[Words of HABIT]

Breaking News!

Isaacson leaks that the next gen Teslas will have Cyber styling (both $25k car and Robotaxi)!

Scoop: Inside Tesla's decision to build a $25,000 "global car" — Axios

Elon Musk was so obsessed with robotaxis that he repeatedly vetoed his own plan to build a $25,000 electric car in favor of them — until skeptical Tesla executives persuaded him to hedge his bet, Musk biographer Walter Isaacson tells Axios.

apple.news

Sooooo.....

 

[2daMoon]

Yes, it did happen and yes, it is POSSIBLE to happen again but it's very unlikely to happen at the same magnitude (or even 7X).

 

[M|S|M MYP]

Along with a Tesla FSD sticker on the glass for the license.
A Certificate of Safety - For the passengers to know, value, and trust.
"Why risk your life with just any driver? Hop in a Tesla Today!"

In some parts of this country...elon and ev haters will get triggered and be more inclined to inflict some 'damage' on your vehicle upon reading this.

 

[ItsNotAboutTheMoney]

Not just that. Covid plus the global supply chain crunch were a double whammy to anyone trying to build anything new, anywhere out of anything.
Its not like the F150 suddenly appeared a week after announcement either!
I suspect the time from release to market will be getting much shorter (thankfully) in future. Except Teslabot. That thing will be in development at least another 5 years (but used internally perhaps)

But that wouldn't have stopped development. 4680 held up all the new vehicles and Tesla adjusted and concentrated on delivering Model Ys instead.

Similarly, GM is held up by Ultium manufacturing problems. Batteries are key.

 

[Artful Dodger]

Where do you get that info from? Tesla's cell purchase price is presumably one of their most closely guarded commercial secrets - and I'd be surprised if they shared with Megapack purchasers.

Here is the source, from this past January:

JPSartre on Twitter: "Costumer pay at 40% @ Contract execution. Tesla expense 40% CATL & Production 40% = offset costs of production (lithium price pass thru) B/S neutral = $0 revenue / cost 1 - 20% shipped 2- 20% installed 3- 20% commissioned Each payment will be recognized as 100% margin/MP" / Twitter | (2023-01-27)​

I think you're likely right about the nature and details of the Contract, with the price tied to commodity costs. Nonetheless, both Customer and Vendor are well-served by this type of long-lead contract.

Cheers!

 

[Featsbeyond50]

I'm curious, but why do you feel $1400/share is too much by 2030?

Tesla is aiming for 20 million production by then, I think they'll fall short of that by 20% and my model uses lower margins than we have on auto today, and yet with a very modest PE of 30 and some conservative assumptions about Tesla Energy I still get $1400 by 2030. My honest opinion is TSLA has a very high chance to be much more than $1400 by 2030 with so many potential positive adders, but I'm leaning on the conservative side due to so many unknowns and such.

Mostly because that's a yearly growth rate of over 30%. Yes, I understand the growth rate from the time TSLA went public is more like 50% but it's going to be harder to have that type of growth going forward. Babies grow fast. Adults have to hit the deadlifts hard and for a long time to get a little growth.

Lots of potential pitfalls:
-Cybertruck launch could be a disaster (I think it will be rough) and could fail.
-Autonomy could take longer. I think it's around the corner but I read comments from people who have it and say it's no where close.
-Autonomy won't significantly drive share price until investors recognize the potential and they won't recognize it until they see the robotaxi platform intersecting with autonomy and that could take a long time.
-Energy is really just a nice side hustle. Solar has not worked out and they have no advantage in storage. All the battery manufacturers can do what Tesla is doing.

 

[M|S|M MYP]

Similarly, GM is held up by Ultium manufacturing problems. Batteries are key.

Pretty sure GM is held up by more than just batteries.

 

[2daMoon]

-Energy is really just a nice side hustle. Solar has not worked out and they have no advantage in storage. All the battery manufacturers can do what Tesla is doing.

Realistically, I believe Energy will be bigger than Auto, as Elon has stated several times. Tony Seba as well. This is the biggest market segment on the planet and it is growing fast to accommodate products and services that require electricity, as well as providing a less expensive method to generate and store it.

Tesla is holding its own against long-entrenched brands of Auto OEMs, both ICE and BEV, because they have the intellect, motivation, and are driven by being on a mission to make the world a better place. (save humanity from itself)

On the field of play for large energy storage Tesla will be sharing the pie against fewer players than they are in Auto.

Tesla's expertise in streamlining manufacturing and using first principles to design products will place it in the top tier of those manufacturers competing in the Energy space. Hence, they'll get a bigger slice of the pie (and likely higher margins as well).

This is significantly more than merely a "side hustle"

 

[Artful Dodger]

Yes, it did happen and yes, it is POSSIBLE to happen again but it's very unlikely to happen at the same magnitude (or even 7X).

I don't know if I have enough visibility on this forum for other participants to know that I'm "all in" and a huge Tesla fanboi since 2013. I'm a bull and I think Tesla is going to rule the world but I don't think it's likely to 7X over the next 6 years from the current market cap.

I suppose it depends on whether you think its likely that Tesla disrupts the Transportation Market with Autonomous vehicles (both trucks and taxis). That's worth 10x easy.

It further depends on whether you think Tesla can disrupt the Labor market (1 Teslabot replaces 6 human workers for mundane jobs; and goes where no human worker can go due to safety and environmental conditions ie: mines, reactors, space). That's 100x minium, but more importantly, there IS NO CEILING to offworld labor.

As Elon says (and perhaps you've not internalized), when labor is no longer a constraint, what does 'an Economy' even mean? Well, it means wealth and abundance for those who own the means of production - robots.

 

[unk45]

60 month is the most common loan lease. Sub is taking away from fsd sales as monthly payment skyrockets due to rates. This is just a way to normalize somethings. Tesla much rather people buy than to sub. Those who wanted fsd subs because "monthly subscriptions is a positive for tsla stock" ended up with a nothing burger. You can check back to see how I viewed fsd subs..I hated the idea because most people will cancel fsd subs when the novelty wears off vs those who bought it and must live with it.

I don’t know what you mean by “loan lease”. Anyway, average tenor of leases is much shorter than is average loan tenor, almost without exception. Every OEM that securitizes loans and leases does have publicly available data. Looking at such data can allow you to post fact rather than conjecture. The FSD subscription vs purchase ignores take up rates for both while assuming that the subscriptions are at the expense of purchases. Factually there is not enough publicly available data to test that conjecture.

I haven’t time to look up the public data now. searching for “Tesla securitizations” will give you links to the data. In them you’ll find average origination generic FICO scores, average tenors, collaterization substitution rates, and much more. Fir that matter almost every major OEM has such data for the US, which has the most active securitization markets.

 

[Mengy]

$1400 by 2030? There is not a doubt in my mind that we will be above that. That's not conservative. You're smack in the middle of bear country with those numbers.

I'm not a bear, I'm just a conservative (but hopeful optimistic) pessimist!

I do agree and acknowledge my estimate for 2030 is on the low side, which is why I am genuinely curious why @Featsbeyond50 thinks it is unrealistic.

EDIT: Mah I see he clarified above, thanks Feats!

-Energy is really just a nice side hustle. Solar has not worked out and they have no advantage in storage. All the battery manufacturers can do what Tesla is doing.

Ah, here is the error of your thinking. Megapack sales will be huge in time, possibly on par with the auto part of Tesla.

 

[jerry33]

I don’t know what you mean by “loan lease”. Anyway, average tenor of leases is much shorter than is average loan tenor, almost without exception. Every OEM that securitizes loans and leases does have publicly available data. Looking at such data can allow you to post fact rather than conjecture. The FSD subscription vs purchase ignores take up rates for both while assuming that the subscriptions are at the expense of purchases. Factually there is not enough publicly available data to test that conjecture.

There are folks whose only concern is how much per month. They take subscriptions. There are people who really dislike monthly payments because that's how you get into trouble if your finances change. They do an outright purchase. When data becomes available I doubt it will show subscriptions eat purchases as the buying group of each is mostly different.

 

[Artful Dodger]

it's going to be harder to have that type of growth going forward. Babies grow fast. Adults have to hit the deadlifts hard and for a long time to get a little growth.

The problem with that analogy is that Tesla is like 12 different startups. They're growing a football team, some will be running backs, some will be line backers...

-Energy is really just a nice side hustle.

Lol, a 'side-hustle' with a TAM 2x the size of Global Automotive. You're really grasping to straws now, straining to make your point. Battery cell makers DO NOT have Tesla's capabilities in power electronics.

 

[Usain]

-Autonomy won't significantly drive share price until investors recognize the potential and they won't recognize it until they see the robotaxi platform intersecting with autonomy and that could take a long time.

I know I've been harping on this all week, but maybe you guys can put up with me one more time on a Friday.

Markets are forward-looking. So share price will go through the roof long before robotaxi actually happens.

As soon as FSD is good enough, the market will start believing that robotaxi WILL happen. The FOMO will be palpable. That's when TSLA takes off for the moon.

 

[Featsbeyond50]

On the field of play for large energy storage Tesla will be sharing the pie against fewer players than they are in Auto.

Tesla's expertise in streamlining manufacturing and using first principles to design products will place it in the top tier of those manufacturers competing in the Energy space. Hence, they'll get a bigger slice of the pie (and likely higher margins as well).

This is significantly more than merely a "side hustle"

Yeah, but these "competitors" are not only competent, they are also suppliers. Tesla isn't getting the whole pie to themselves. and they will have to fight for margin.

 

[Featsbeyond50]

I suppose it depends on whether you think its likely that Tesla disrupts the Transportation Market with Autonomous vehicles (both trucks and taxis). That's worth 10x easy.

It further depends on whether you think Tesla can disrupt the Labor market (1 Teslabot replaces 6 human workers for mundane jobs; and goes where no human worker can go due to safety and environmental conditions ie: mines, reactors, space). That's 100x minium, but more importantly, there IS NO CEILING to offworld labor.

As Elon says (and perhaps you've not internalized), when labor is no longer a constraint, what does 'an Economy' even mean? Well, it means wealth and abundance for those who own the means of production - robots.

I'll be shocked if Bot is contributing anything this decade.

I think autonomy is going to be everything you think it is, I just think it will take longer than you think.

 

[Usain]

Yeah, but these "competitors" are not only competent, they are also suppliers. Tesla isn't getting the whole pie to themselves. and they will have to fight for margin.

Demand will outstrip supply for a very, very long time. Anyone able to procure batteries and build a decent "megapack" will command high margins.

Competition will be irrelevant for many years to come.

 

[FreqFlyer]

Sooooo.....

View attachment 972053

Auto press already picking up on the same excerpts from the book. Less than flattering synapsis and I bet the rest of the auto and financial media will pick this story up too over the weekend.

Tesla's $25,000 Car Will Have A Cybertruck-Like Futuristic Design | Carscoops

In an excerpt from Walter Isaacson's new biography of Elon Musk, the Tesla CEO is revealed to have been against the idea of building a sub-$25K EV, preferring instead to focus entirely on making an autonomous vehicle

www.carscoops.com

 

[Featsbeyond50]

Lol, a 'side-hustle' with a TAM 2x the size of Global Automotive. You're really grasping to straws now, straining to make your point. Battery cell makers DO NOT have Tesla's capabilities in power electronics.

I hope you're right, I'm not an EE so I don't have a technical background to judge from, but it seems like it would be easy to assemble batteries into megapacks.