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

[Mengy]

Allow me to explain - it was meant as a joke. I've caught up with the thread myself (took some doing) and the insightful information is massively outweighed by (in my opinion) undue negativity. I would absolutely guarantee investors do actually pay attention to the Earnings Call(s) and discussion surrounding it, but don't take some of the negative overreactions too seriously. Long term outlook and level-headedness always important.

This is true. The call was somber last night and some of the numbers and guidance weren't great for the short term, BUT long term Tesla still looks incredibly good. I'd say Tesla becoming the largest company in the world by market cap has only been delayed a bit, not subverted.

 

[mongo]

That is Tesla R&D's team job to figure out.

Nuh, huh. Whole premise behind the traditional truck design ease of manufacturing is that it doesn't need R&D.
A person doesn't get to claim a whole bunch of hopium pinned to a traditional design and skip over the reality that any vehicle needs a factory and cells.

 

[EQC_]

Do you think people negative on Elon would actually go to a Tesla showroom?

I think many of them actually do! Seemingly so they can claim real 1st hand knowledge when they spend hours a day complaining about Tesla online.

I imagine these Tesla haters head to the Tesla showroom with a biased mind and looking for evidence to "prove" Tesla cars aren't good. They'd bring an imaginary micrometer and check for any perceptible differences in panel/door/trunk spacing on one side of the car versus another. They'd sit in the car for 10 seconds to declare it terribly uncomfortable and complain about the "cheap interior" and that everything is unusable because it is "on that giant screen and probably buried 10 menus deep". Then they'd go online and yowl about the car in some blog or comment section, along with accusing Elon of only being rich because of Apartheid wealth and blood emeralds, based on some vague story they heard years ago and then exaggerated in their own mind over and over again. And of course they'll make some clever "pedo guy" reference. Then they finish off by simultaneously claiming Elon has nothing to do with the success of Tesla and SpaceX because he spends all day on Twitter, while also acting like Elon is personally responsible for every bad thing any racist/sexist/etc. employee does at those same companies.

 

[thx1139]

It sounds like you are actually agreeing with me!

I agree once the Gen3 line is built in Austin and ironed out, they can then "copy & paste" the line design in Mexico and any other future factories. However, that takes time to implement, and with these delays now I do not think there is enough time between now and 2030 to ramp total production to 20 million by then. I think something more like 13-15 million production by 2030 is far more likely, with 20 million happening a few years afterwards.

What I dont understand is why dont they build another Model Y line in Texas and move a line from Fremont so they can start building Model 3 Highland lines in Fremont. Unless they dont plan on bringing Model 3 Highland to NA until late Q1 or even Q2 2024 when is Tesla going to start the switch over to Model 3 Highland in Fremont. If they are taking the hit now, lets not expect a good boost in Q4.

 

[Krugerrand]

Does not seem the plan is to crazy ramp Austin and Berlin. May change in the next six months but they went out of there way to emphasize the SLOW ramp on the deck.

Would love to see them double capacity but that is not happening right now, and of course that takes time, especially in Berlin.

I don’t think they want to hire the people. Maybe banking on Optimus providing some labor in about 18 months?

It’s not a matter of not wanting to hire people, Elon clearly indicated there was a lack of people to hire.

He talked about greater Austin only having 2 million people to draw from and while people are moving to the area, there’s a housing shortage. Maybe you missed that because of poor audio.

 

[thx1139]

DATA is my reason. The DATA bears out the remote workers just aren't as productive as on-site. PERIOD.

The Surprising Truth About Remote Work Productivity

Research shows that remote work saves time and boosts productivity.

www.psychologytoday.com

 

[Drax7]

It sounds like you are actually agreeing with me!

I agree once the Gen3 line is built in Austin and ironed out, they can then "copy & paste" the line design in Mexico and any other future factories. However, that takes time to implement, and with these delays now I do not think there is enough time between now and 2030 to ramp total production to 20 million by then. I think something more like 13-15 million production by 2030 is far more likely, with 20 million happening a few years afterwards.

Let’s first get to 2 million, all these pie in the sky predictions
get to be nauseating after a while.

 

[bkp_duke]

TSLA currently sitting at $226 a few minutes after the open.

What's everyone's prediction for where we end the day at? Will we sink lower than this, or climb up some from here for the day?

I know it doesn't matter in the long term, but I am curious to see how the stock responds to that call last night...

I'm curious about this as well, mainly for selfish reasons. I've loaded up a few couches and am ready to buy a few hundred shares now. Timing seems pretty good for a long-term investor.

 

[Krugerrand]

Yep. As Tesla auto production slows down quite a bit over the next two years Tesla energy will be ramping very nicely. Megapack margins are very good too, so I do expect this to offset and greatly improve revenues and overall margins.

Just imagine how big Megapack sales will be in a few years once Gen3 goes into production!

Where do you get slowing of auto production? And did you miss the part where the CFO clearly talked about Megapack being lumpy.

Too many people getting wrapped up in Elon’s mood and not listening to and hearing the words coming out of his mouth, nor reading the actual report.

Too much emotion, guessing and speculation interfering with logic, reason and the facts presented yesterday.

 

[Artful Dodger]

When we have a cheaper model 2, things will look different, but right now, Tesla will always struggle in a tough economy.

Exactly. This is why I highly doubt the Gen 3 timeline will be impacted in any material way (in spite of doom'n'gloom aimed squarely at JPow and the Fed).

Sure, I can understand delaying capital expenditure on a 2nd Model Y line in Berlin, but not on their Gen 3 plant (or one in Mexico). Afterall, if Elon's FSD moonshot does work out, it needs robotaxis to be monetized. S3XY Models won't be enough, and new Factories take years. It's about lead-time, and recessions are the best time to build capacity due to cheaper construction costs (Tesla has said so themselves in the past).

I hope the Board is thinking clearly. I'm sure they will do the right thing, afterall Tesla had a net increase in cash of $3B this quarter alone, and is being gifted $500M per Qtr in (one-time!) ZEV Credits (only way that goes down in the next 5 yrs is if competitors go bankrupt). Ooh, don't forget the interest income Tesla is getting right now with US Treasury bonds yielding close to 5%.

And there's the T.E. money-printer. It'll be fine, no matter what E. thinks (or says)...

Cheers to the Longs!

 

[bkp_duke]

What I dont understand is why dont they build another Model Y line in Texas and move a line from Fremont so they can start building Model 3 Highland lines in Fremont. Unless they dont plan on bringing Model 3 Highland to NA until late Q1 or even Q2 2024 when is Tesla going to start the switch over to Model 3 Highland in Fremont. If they are taking the hit now, lets not expect a good boost in Q4.

Because building a new line for the Y would take 12 months. The equipment (robots, etc.) doesn't grow on trees and has to be ordered well in advance.

The transition work for Highland in Fremont has already started, about 2 months ago (at least per the permits we have seen leaked online in various reports).

 

[Mengy]

Where do you get slowing of auto production?

Um, from the call last night? Elon clearly said to not expect 50% CAGR for the near future as they slow production ramps in both Berlin and Austin because he is uncertain of the economy for the near future. He wants to pause the ramps until rates come back down. I believe he even said something like "we don't want to accelerate production ramps into an uncertain economy" or something like that.

Note this is auto production I'm talking about, not total production including energy.

Not to be mean but you DID listen to the call, right?

 

[Singuy]

I find it amazing that there was no (or hardly any) mention of one important car in yesterday's earnings call and in the gazillion comments here: Highland. I think that for the next quarters it will be much more of a savior than Cybertruck.

The updated Model 3 is so (visually) different - when compared to Tesla's usual updates - that it will likely entice hundreds of thousands of current Model 3 owners in Europe and China, and early next year in the US, to trade up. Tesla should be able to sell all of its Model 3 production for at least several quarters at current prices, with no need for price reductions. That means good margins.

If Model Y were to get a similar update next year, the same would happen to that car.

On another note: there were some complaints here about Musk saying the next generation smaller car will not be very special. I believe it will be and that he was simply trying not to osbourne Model 3 and Y for the whole of 2024. Would the complainers have preferred that?

Not very special to me means it's the opposite of CT, which Elon believes is very special. So he is talking about it in a way that it's as special as the Y, which is pretty much a model 3 lifted. It actually is designed with low COGs in mind unlike CT. BTW Elon never said CT would be easy, only the Tesla bull trap community said so on social media since reveal.

 

[Krugerrand]

I find it amazing that there was no (or hardly any) mention of one important car in yesterday's earnings call and in the gazillion comments here: Highland. I think that for the next quarters it will be much more of a savior than Cybertruck.

The updated Model 3 is so (visually) different - when compared to Tesla's usual updates - that it will likely entice hundreds of thousands of current Model 3 owners in Europe and China, and early next year in the US, to trade up. Tesla should be able to sell all of its Model 3 production for at least several quarters at current prices, with no need for price reductions. That means good margins.

If Model Y were to get a similar update next year, the same would happen to that car.

On another note: there were some complaints here about Musk saying the next generation smaller car will not be very special. I believe it will be and that he was simply trying not to osbourne Model 3 and Y for the whole of 2024. Would the complainers have preferred that?

Good point about Highland.

I don’t recall Elon saying next gen car wouldn’t be ‘very special’. He said it was going to be utilitarian. The definition of that word is; designed to be useful and practical rather than attractive. But then he went on to clarify the attractive part so people wouldn’t get all up in arms that it would look like a Yugo or some such.

The next gen vehicle will have the trademark Tesla sleek look to it, it simply won’t have the cyber look. And it’ll be just as special as every vehicle made by Tesla.

 

[Christine69420]

Where do you get slowing of auto production?

Um, from the call last night? Elon clearly said to not expect 50% CAGR for the near future as they slow production ramps in both Berlin and Austin because he is uncertain of the economy for the near future. He wants to pause the ramps until rates come back down. I believe he even said something like "we don't want to accelerate production ramps into an uncertain economy" or something like that.

Note this is auto production I'm talking about, not total production including energy.

Not to be mean but you DID listen to the call, right?

Slowing of auto production is much more serious than slowing the rate of which it's ramping!

I only heard about the latter.

 

[bkp_duke]

Exactly. This is why I highly doubt the Gen 3 timeline will be impacted in any material way (in spite of doom'n'gloom aimed squarely at JPow and the Fed).

Sure, I can understand delaying capital expenditure on a 2nd Model Y line in Berlin, but not on their Gen 3 plant (or one in Mexico). Afterall, if Elon's FSD moonshot does work out, it needs robotaxis to be monetized. S3XY Models won't be enough, and new Factories take years. It's about lead-time, and recessions are the best time to build capacity due to cheaper construction costs (Tesla has said so themselves in the past).

I hope the Board is thinking clearly. I'm sure they will do the right thing, afterall Tesla had a net increase in cash of $3B this quarter alone, and is being gifted $500M per Qtr in (one-time!) ZEV Credits (only way that goes down in the next 5 yrs is if competitors go bankrupt). Ooh, don't forget the interest income Tesla is getting right now with US Treasury bonds yielding close to 5%.

And there's the T.E. money-printer. It'll be fine, no matter what E. thinks (or says)...

Cheers to the Longs!

There are rumblings about negotiation "issues" with local Mexican gov for GF Mexico. Specifically, Tesla wants the gov to cover local infrastructure upgrades that supply to the factory (roads, power, sewer, etc.) and the local officials want Tesla to cover that.

Part of the stall may be negotiation tactics on Tesla's part.

 

[Mengy]

Slowing of auto production is much more serious than slowing the rate of which it's ramping!

I only heard about the latter.

Okay, I did mean slowing production growth, not the current production rate. At least this is what Elon said. I don't think production will decrease in the short term, but it certainly sounds like production growth is going to slow from what we are used to.

 

[EQC_]

Slowing of auto production is much more serious than slowing the rate of which it's ramping!

I only heard about the latter.

Yup. And, if I remember correctly, didn't they specify that there would be a pause in Shanghai growth, but only specified the ramp of the Y at Texas and Berlin would become gradual? Probably my own hopium, but that leaves the door open for building and ramping other things. Haven't they already cleared land at Berlin for another factory phase?Likewise, no mention of Fremont that I recall...and we know there have been many projects in the works there...assorted permits and huge new foundations near the casting area. I'd imagine these changes will create opportunities for growth in production...

 

[Artful Dodger]

I wonder if Elon is pushing the lower >125K cap on Cybertruck production because it will never be profitable...

If so, there may be a huge resale market for Cybertruck (not great for investors). Buying a car for $69K and turning around and selling it for $99K or more. I think we’ll see this.

Interesting thought, but I think your analysis is slightly off. The hard price cap is $80K due to the IRA. Making 125 CTs/yr instead of 250 or 375 means that all of those can be $80K variants w/o exhausting demand. Then, as the economy (and economies of scale) improves, introduce the $70K dual motor and sell another 125K/yr of those. Same with $60K base model for a total of 375K/yr if demand and the economy allows. This is a smart approach to minimizing risk.

 

[Krugerrand]

I knew that was always your reason. You dont trust people.

Why should he? And let’s just keep this Tesla and investor related.

We have people in this thread literally making bs up about the ER call yesterday. People who supposedly know the company well, beyond a superficial level, and are invested and been invested longer than a day. Just making up stories.

If I hadn’t actually listened to the call myself yesterday, I’d have to be thinking Tesla is suddenly in serious financial trouble given what’s being said. But the facts are not that at all. The company is killing it and acting responsibly on behalf of their shareholders and the world.

So yeah, people can’t be trusted.