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

[Usain]

This is a CULTURE problem in the USA. I don't have this problem in my company with my employees outside of the USA. Work ethic (and NOT "slaving" people - compensating fairly for their work) is just eroding rapidly in the USA. Case in point - Berlin and Shanghai Model Y fit and finish is PERFECT. Put those cars next to one from Fremont, and they make it look poor by comparison. The product is the same. The employee and their pride in their work, not the same.

I've bought three Freemont Teslas in the past three years. Fit and finish were perfect. You just don't hear about those problems any more.

Back before 2020, Tesla was still learning how to make cars at high volume. Those issues back then had nothing to do with a culture problem in the USA.

 

[TN Mtn Man]

(1) Drugs and Elon happens. (2) The sooner that expectations can be "managed" about 50% CACR the better. Why not have a Tesla official say the actual truth that it's rare that making physical goods over more than several years can occur at that rate? For software yes, but not for metal-bending. So "guide" to 30%, not 50%. (3) If CTs are hard and expensive to make, why not charge early adopters accordingly? Out of more than a couple million pre-orders, won't 1 out of 10 pay a boosted initial price? Tesla did it this way for Roadsters and Model S/X; they only came down the cost J-curve with Model 3/Y. (4) As for ordinary trucks, someone at Tesla is on record somewhere that they'd make a more ordinary truck if the CT (at least the exterior styling) fails.

IMO that would be a serious mistake. Everyone that only has rudimentary knowledge of the industry pictures Teslas as expensive vehicles, and if you compare them against more "mainstream" ICE vehicles (for those that aren't big on the early adopter thing and just want the best value they can get in a vehicle) they still are. Selling a $120k Cybertruck because early adopters are willing to pay that, will hit the media, and it will stick in the minds of buyers. Not that an ICE F-150 or Silverado isn't overpriced these days, but you can certainly get one for far less. Someone looking at a new truck might not even consider a Tesla because that high price point is stuck in their minds (kind of like people think MYs are still $66k). And yes, I'm comparing prices against ICE trucks, because we need "mainstream" buyers that compare against all alternatives, not those that will only consider an EV and are willing to pay a high premium to get one..

 

[heltok]

Imo people put to much emphasis on Cybertruck. Yes I have one on order, yes it will be awesome. But its volume will be less than 10% of Tesla's sales in 2025 and for 2024 even less. What matters is Model Y ramp in Berlin&Austin, demand vs price for 3/Y, FSD finally being released, $25k car, Giga Mexico, Megaphactory Shanghai, 4680 ramp, IRA credits and Tesla Bot. These are the items that will drive the stock price in the next few years. Cybertruck is basically a very expensive ad campaign for Tesla.

 

[MikeC]

Look, the same info (more or less) could have been imparted without actual sound bites like "We dug our own grave with Cybertruck". Is he that dumb (I know he isn't, but stay with me here), to not realize that the OBVIOUS retort/question is "Why the hell didn't you create a normal pickup truck then?". Does he think Tesla's brand is that weak that only something that looks different than a Chevy could sell? Doesn't he realize that NO ONE ELSE is selling EV trucks at any volume because they all suck in some way? Ford Lighting isn't even a bad truck, well except for the range, but they can't make it in volume since they don't have the battery supply.

I am really starting to think Elon's strategic thinking is messed up here. He was anti-selling the $25K car because it was a "boring ordinary car". Who the **** cares Elon? Give me a $25K Tesla and I'll sell a million of them, boring styling and cheap interior or not.

I'm realizing that the Model X wasn't a one of mistake. That vehicle, which could have been THE soccer mom car, was cost crippled because of those flashy but ultimately pointless falcon wing doors. Rivian is selling as many R1S SUVs as they can make, even with their inflated prices (imagine how much cheaper Tesla could make the R1S), because it is JUST A CAR, with a form factor that people like. Does it have cold gas thrusters? Does it have flappy wing doors? Does it have sub 2 second acceleration? No, and it doesn't have to to sell tons.

Elon was dragged kicking and screaming to make a $25K car with a steering wheel. Speaking of wheels, how was his intuition on wheel vs yoke? I even like my yoke, but it turns out it was a market dud. Thanks Elon for crippling Model S/X sales for a while until you figured that one out.

Yeah the Cybertruck might turn out to be great. But it has cost Tesla at least a year delay in getting a truck to market. And apparently margins on it are going to suck if you believe (checks notes), some guy named Elon.

Most of the rest of the call was taken up with Elon giving reasons why no one can afford his cars. Yes, it was more nuanced than that. Think the press will explain the nuance?

Look, I continue to think Tesla has a bright future, but gawd that call didn't paint that picture.

I'm starting to wonder where we'd be if the X was a simple scaled-up version of the S, if TSLA never bought SCTY, if they had never bothered with FSD and Optimus and gone straight to the 25k car after the Y, if Cybertruck was normal, if Elon never bought Twitter or tweeted. I'll admit it's been an entertaining and profitable ride, but what kind of volume could Tesla be moving right now if they had just followed the initial vehicle plan without all the distractions?

 

[uscbucsfan]

I've bought three Freemont Teslas in the past three years. Fit and finish were perfect. You just don't hear about those problems any more.

Back before 2020, Tesla was still learning how to make cars at high volume. Those issues back then had nothing to do with a culture problem in the USA.

They are all over these forums.

That's completely false. I would even say it's not much better than it was. There were always some perfect cars and some really bad cars and most were average. We only hear about the bad ones.

 

[Buckminster]

https://twitter.com/x/status/1714742146899583287

 

[MC3OZ]

Yes, if you parsed his words carefully, you'll realize that he is saying he is positioning Tesla to grow slowly right now just in case things get worse so as to avoid a bankruptcy. Which is the exact same thing about worrying about going bankrupt (which is what I said). He doesn't think that Tesla will go bankrupt, but he is worried about it nonetheless.

Elon tends to oscillate between overly optimistic, and overly pessimistic.

Interest rates are a big deal for him in part because he doesn't like the current US government, and in part because what he says about mostly payments impacting on demand is true.

Many other legacy car markers have unsold EV inventory pilling up at dealers, and have delayed some of the EV production plans.

Outside of the US, BYD is a threat because they are growing production volumes and managing to price cars very competitively.

Overall, this period is going to put legacy auto further behind Tesla and BYD n terms of EV market share.

I am only disappointed that Giga Mexico has been delayed, but I suspect that the delay has been over emphasised by Elon, in the hope that the government can be pressured to reduce interest rates.

When times are tougher economically, people tend to become more conservative and short term focused. That means EVs need to be attractively priced. Hopefully, the bulk of the price reductions are over, and there are still some cost reductions in the pipeline.

The update on 4680 production sounded good, I would like to see a written transcript of that section and I will listen to it again.

 

[Usain]

Yeah the people that work in my local McDonalds, Starbucks and other low wage retail business have commutes measured in minutes.

Speaking of fast food, it seems like every time I go through a drive thru window the attendant tells me how much they love my Tesla and how they want to buy one some day.

That affordable small Tesla can't come soon enough!

 

[Tony73]

Something can be cheap and quickly to manufacture and still be hard to get there

Musk focused solely on the “hard to get there” part.

 

[jerry33]

Elon tends to oscillate between overly optimistic, and overly pessimistic.

Interest rates are a big deal for him in part because he doesn't like the current US government, and in part because what he says about mostly payments impacting on demand is true.

Many other legacy car markers have unsold EV inventory pilling up at dealers, and have delayed some of the EV production plans.

Outside of the US, BYD is a threat because they are growing production volumes and managing to price cars very competitively.

Overall, this period is going to put legacy auto further behind Tesla and BYD n terms of EV market share.

I am only disappointed that Giga Mexico has been delayed, but I suspect that the delay has been over emphasised by Elon, in the hope that the government can be pressured to reduce interest rates.

When times are tougher economically, people tend to become more conservative and short term focused. That means EVs need to be attractively priced. Hopefully, the bulk of the price reductions are over, and there are still some cost reductions in the pipeline.

The update on 4680 production sounded good, I would like to see a written transcript of that section and I will listen to it again.

All the delays that have actually happened so far have to do with Mexican bureaucracy. (Not to say that there won't be delays by Tesla, but that hasn't happened so far.)

 

[TN Mtn Man]

I'm starting to wonder where we'd be if the X was a simple scaled-up version of the S, if TSLA never bought SCTY, if they had never bothered with FSD and Optimus and gone straight to the 25k car after the Y, if Cybertruck was normal, if Elon never bought Twitter or tweeted. I'll admit it's been an entertaining and profitable ride, but what kind of volume could Tesla be moving right now if they had just followed the initial vehicle plan without all the distractions?

You can make that argument. At the same time, Tesla needs some splash to get attention, especially considering that they don't spend (waste?) money on advertising. They didn't need to make Plaid-but how much media attention has that gotten as (one of) the quickest (0-60) car in the world? How many people remember the 4-door family sedan dusting half million dollar supercars at the dragstrip? How many magazine/social media articles have been written about it? And on the street-how many remember getting dusted by one? Regarding the X-most people would only remember it as a crossover EV without the "falcon-wing" doors. Those doors (and Plaid) both showed Tesla's engineering stones and willingness to "boldly go where no man has gone before". Granted I think they underestimated the actual problems posed by those doors but it made a spash and got some attention. How many still remember the "gull wing Mercedes" that otherwise wouldn't have a clue of it's existence?

IMO the Cybertruck will be the same way. You can see a Lightning on the road and not even notice, it's just a rebuilt F-150 as far as anyone is concerned. Same with Silverado EV (assuming they actually get them on the road)-it looks like any other pickup from the last 70 years. Not worth noticing. Cybertruck...will be noticed. Some will love it, some will hate it-but it will be noticed. IMO, if Tesla can deliver on the promises and performance, and especially approach price parity with an ICE P/U, I think it will be huge for the company.

 

[GOVA]

Roadster was hard, S was super hard, X was extremely hard, 3 was so new it was super hard especially the 'production hell'

Now, CT is hard. Yet we are 15x from 2019 while the economy has been in toilet.

What's new? Nothing. Very same moaning accounts every call.

 

[Buckminster]

https://twitter.com/x/status/1714777861918265852

 

[Usain]

If Gordon Johnson had said Tesla dug it’s grave with cybertruck, everyone here would ridicule him but it’s somehow ok for Musk to use those words

Who said it was OK for Musk to say that? I think everyone here regards it as a mistake.

Of course, it will be easy to spin Elon's comment at the delivery event. I can see Elon saying something like,

CyberTruck turned out to be incredibly hard to figure out how to build. We dug our own grave with that one. But now it's rising from the grave and it's a monster!

 

[Usain]

Good news; it will be difficult to be so negative on the call in Jan when the $7500 is coming off the sale price.

Yes. Elon seemed unaware that it becomes a point of sale tax credit next year.

 

[uscbucsfan]

Yes. Elon seemed unaware that it becomes a point of sale tax credit next year.

It would be worse for him to acknowledge. He doesn't want to tank Q4 and that's why Tesla sales is telling people it won't apply to Teslas.

 

[Mengy]

Well that was not a great ER. I've been listening to these for many years now and this might be the most depressing one I've ever heard. No wonder the stock tanked so much after hours.

Sounds to me like 2024 might be a slower year growth wise than many here expect. Lower margins and EPS, slow CT ramp, possibly no Giga Mexico construction. We might not see TSLA hit a new ATH until well into 2025.

Long term I'm still incredibly confident in Tesla and I'll continue to hold my stock, but this was even more bearish than I normally am, and that's saying something!

 

[Usain]

Cybertruck is basically a very expensive ad campaign for Tesla.

That's not necessarily a bad thing right now.

If Cybertruck is as good as I think it is, Tesla is going to rake in a lot of cash from it in 2025. The US truck market is huge.

 

[Drumheller]

Maybe in context of audio/streaming. I'd argue that Tesla is giving away access to NACS and, apparently, access to Superchargers. I won't pretend to know the details, but the rate of NACS adoption and Supercharger deals inked in the last few months make me question just how savvy Tesla was on this vs what they could have been. But, to be fair, I seem to sit here in my chair, analyze and question most everything Tesla does as if I'm some expert. I'm not.

Yes, Tesla or Elon stated earlier this year that they were not charging a few to other automakers for NACS or using the superchargers, and owners would pay the same rates.

Yes, that's what Elon implied, but that isn't what will actually happen. It is very possible for the economy to pick up, and people to start buying cars again in volume even with interest rates where they are. In the 1990s (it was only 25 years ago people!), we had 6% interest rates with an absolutely BOOMING economy. So while Elon cries about interest rates, he may find that it doesn't matter as much as he thinks IF the economy picks up.

How do wages and disposable income in the 1990s compare to today? Inflation has been worse than official numbers and wages have not kept up. Many people posting here are wealthy and perhaps not aware of how tight things have become for the median income household.

Yeah people are really spoiled. Look back into the late 90s. Economy was very health and rates were still higher than this.

My above comments.

Can what is going on with Tesla possibly be summed up as follows?

1. Elon's more recent foray into politics has had an asymmetrically negative impact on demand, turning off a significant portion of the subset of buyers that are more open to buying an EV as their next car, meaning that more of Tesla's volume must come from non-early adopter types.
2. These non-early adopter, mass-market consumers are more resistant to buying an EV for various reasons, to the point of price inelasticity. (See the recent surveys that have been published on this topic.)
3. Elon and Tesla are conflating the cause for this demand weakness with high interest rates. They attempt to address it by dropping prices, but the buyers they are trying to lure are more put off by their misperceptions with EVs than they are by price, making the price cuts relatively ineffective.
4. At the same time, Tesla is not undertaking the type of educational campaign that could actually make inroads with these mass market consumers.

Sunday I was at a Tesla showroom for a local owners club event. While there I offered to help walk in people with any questions. I spent about an hour with a couple that had a long list of questions. Many were directly linked to FUD on range, cost, and reliability. Not a single question or comment on politics or Elon's X posts. When I left, they were going out to test drive a Model Y.

We can all share our opinions and thoughts. I recommend getting out and talking to people and maybe help out a bit in a showroom and see how it goes. Granted, anyone that hates Elon is not likely to walk into a showroom. And while it doesn't change the situation, I think anyone deciding not to buy the safest vehicles on the planet for their family because their feelings are hurt over Elon's X posts may not be wise.

 

[Usain]

It would be worse for him to acknowledge. He doesn't want to tank Q4 and that's why Tesla sales is telling people it won't apply to Teslas.

Good point.