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

[hobbes]

so far along they haven't unveiled it yet or are anywhere near unveiling... yet the Cybertruck was unveiled 4 years before it was delivered. So yeah.... not too confident with "mid-2025". I'm super happy they will do a sub $30k vehicle... just not sure we will see it before 2026.

Cybertruck was not likely to osborn 3/Y because its in an entirely different segment. The sub 30k car is more likely to affect 3/Y IMHO

 

[uscbucsfan]

My guess is they are somewhat sandbagging their ability to start the 20,000$ car to minimize affecting Y/3 sales. End of 2025 (info from call) might become mid 2024 (info to suppliers). Once interest goes down and demand picks up, they will be quick to announce and build the car. Unless the new unboxed production thing will slow them down..

That is an extreme bullish take. Just like people thought Tesla was sandbagging on the CT, which they were not. It's extremely unlikely.

 

[Knightshade]

I asked this last night, but the CFO said that they only had point of sale tax credit on the MY. Is that accurate?

As I said, it theoretically exists for Model 3 Performance (but not RWD or LR AWD) but those don't exist since the refresh. Should also still exist for the Model X if you get it under 80k. Otherwise yeah, just for the Y.

My guess is they are somewhat sandbagging their ability to start the 20,000$ car to minimize affecting Y/3 sales. End of 2025 (info from call) might become mid 2024 (info to suppliers)

Absolute, pure, uncut, hopium fantasty.

Tesla does not sandbag. It never has. Why this delusion keeps coming up here absolutely baffles me.

Tesla sets aggressive target dates, sometimes they meet them, often they're late, but you can count on one hand with multiple fingers left over the times they've been early, specifically because their target dates are intentionally aggressive- the opposite of sandbagging. If they're a company that "sandbagged" they'd be the worst-executing example on earth of doing it.


The info to suppliers was mid 2025 not 24.

Tesla next-gen electric cars are coming in 2025, supplier sources say

Tesla’s next-gen electric cars, including the long-awaited “$25,000 model”, are coming in 2025, according to a new report based on...

electrek.co

And you set up your supply chain BEFORE mass production- meaning that date has to come BEFORE you're doing volume of cars.

 

[hobbes]

Woot! 4680 production is ahead of Cybertruck production. - Drew

Does this include cathode production??

 

[DarkandStormy]

Down for the quarter, but doubled for the year. In other words, trending nicely.

Just ignore Solar Deployed (MW) YoY.

 

[thx1139]

That is an extreme bullish take. Just like people thought Tesla was sandbagging on the CT, which they were not. It's extremely unlikely.

And people believed it even with no place to build the CT. I for one have a very hard time believing any time table (and lots of other things) that Elon says now. He has betrayed trust far to much.

 

[mongo]

When Nintendo made the Wii, they purposefully left themselves production constrained.
Tesla is a different beast, but consider this:
Cost per vehicle is BOM + labor per car + overhead per car
BOM drops a little with volume and overhead per car drops fairly linearly with volume. However, labor does not have so easy a trend line because it (typically) gets added in full shifts.
Say one shift fully utilized makes C cars at a labor cost of L/C per car.
Bump production 20%, now a full additional shift is needed (unless you go with irregular scheduling). So you have 2L/1.2C = 1.67L/C, a 67% increase in labor cost per car. Berlin has labor rules which make additional shifts even more disadvantageous so it's >2L.

The 17% reduction in factory overhead per car isn't going to make up for that, especially considering factory overhead is really a constant that gets amortized at the end so there are no savings in volume. There is also the step change of stamping and casting capacity to deal with.

To optimize margin, Tesla wants to get demand aligned with maximum output of the current shift capacity. A small increase in demand beyond that works against them. Either wait time starts increasing or they bump up pricing to reduce demand. Only when there is a large amount of excess demand does shift adding make sense. Cybertruck's backlog definitely supports multiple shifts.

 

[SOULPEDL]

Alternate Uptick Rule kicked in at -10% from yesterday's Close: $207.83*0.9 = $187.04

View attachment 1012064

Short sales are still allowed (that's the alternate part of the SEC rule), they just can't be done below the 'National Best Price' but they can still buy Put options for lower strikes, and then their Options Market Maker reflexively short sells stock at below the price, so don't look for support from the 'Uptick rule', rather look at Put Options volume (reported intraday roughly hourly)

Cheers!

Thanks for the tip.
Here's a timestamped record for todays' Options. Max Pain is still 215 but maybe this adjusts later or tomorrow?

Spoiler: Open Interest

Spoiler: Volume

 

[Tony73]

My guess is they are somewhat sandbagging their ability to start the 20,000$ car to minimize affecting Y/3 sales. End of 2025 (info from call) might become mid 2024 (info to suppliers). Once interest goes down and demand picks up, they will be quick to announce and build the car. Unless the new unboxed production thing will slow them down..

That’s not how the auto supply chain works.
End of 2025 probably means end of 2025. Conservatively, it will take another 12 to 18 months after that to start production at the other factories. We are probably at least 3 years away from the next gen vehicle being produced at scale in multiple factories.

 

[Krugerrand]

I understand that, but if the price ends up being the same why will it cause more people to buy.

Maths are hard, huh?

Also I would like to know if say demand did increase what capabilities do the factories have to ramp further to meet demand? Can they? Can enough 2170 batteries be produced to make more Model 3s? Did anyone on the call ask what would it take for Tesla to make Model 3 eligible for the $7500 tax credit again. That sure seems like low hanging fruit.

I didn’t realize you were new to Tesla. When has Tesla ever not adjusted to anything, everything, all the time? When has Tesla ever not tried to price their vehicles to the best advantage of the customer, while also not shooting themselves in the financial foot? What do you think is suddenly different where Tesla wouldn’t continues on as they always have, the way that got them record production, record sales, virtually no debt, and billions in the bank?

You know what’s going to happen this year, right? Tesla is going to produce and sell another new record number of vehicles, they’ll continue to expand SC network, production capacity in various factories, record energy sales and profits, get one year closer to producing the next model of vehicle, get one year closer to FSD, get one year closer to monetizing Optimus, come up with at least 6 more hair brained ideas, sell out of the CT for the year at top dollar, hold the title for the best selling vehicle of any kind in the world again, AND put a few more BILLION dollars in the bank. Sounds absolutely awful! I have so many questions.

 

[kabin]

Wow, even Dan Ives opened up a can on that conference call.

"We were dead wrong expecting Musk and team to step up like adults in the room and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand... instead we got a high level Tesla long term view with another train wreck conference call."

Fear not though. He's still a bull.

 

[Krugerrand]

@anthonyj, @TrendTrader007 : is it time to buy calls yet : )?

P.S. Couch > a few chairs this morning...

If you have to ask -

 

[texas_star_TM3]

Cybertruck was not likely to osborn 3/Y because its in an entirely different segment. The sub 30k car is more likely to affect 3/Y IMHO

the sub $30k car will also be closer to $30-$35k by the time all is said and done... the "sub $30k" will go the way of the 300 miles, $49k Cybertruck

 

[texas_star_TM3]

That’s not how the auto supply chain works.
End of 2025 probably means end of 2025. Conservatively, it will take another 12 to 18 months after that to start production at the other factories. We are probably at least 3 years away from the next gen vehicle being produced at scale in multiple factories.

100% this. they haven't unveiled any design yet either

 

[EXOTIC1]

Last time i checked it was still January, so that means we have 11 more months to go in year 2024. A lot of things can happen in the next 11 months, we have been through this before and will come out fine like we always have. Does it sting a little? Seeing your portfolio go down in the high 6 digits will do that to you. However, the future is bright and there are several couches that need shaking!!

Have owned all my TSLA (2500 shares ) since 2016 and have never sold any of it. I was in for the long-term but now I’m starting to question that decision. I don’t see anything else in 2024 that is going to give the stock any kind of boost perhaps I’m missing something. I’m considering rolling it into AMZN

 

[scaesare]

b/w FSD and Optimus, Tesla sure needs a lot of NN compute. So even if Dojo is inferior to nVidia, I am sure it will find many uses and will be improved along the way.
Was good to hear that the chips in the cars are Tesla based already.

Was something new announced? The Tesla designed (with Jim Keller as the principal) FSD computer has been in vehicles for a several years now, and now their v4 is in in production....

 

[elasalle]

Was something new announced? The Tesla designed (with Jim Keller as the principal) FSD computer has been in vehicles for a several years now, and now their v4 is in in production....

yup, was mentioned in CC. It's old item, but had forgotten about it.
I think Samsung is building it for them.

 

[Krugerrand]

I found it a good conference call. Boring is good. No drama is good. I’m not in the business of predicting next quarter’s numbers, so I’m fine with no guidance.

I no guidance and my suspicions were correct that they wouldn’t give it. It wouldn’t have mattered anyway. There’d have been a negative spin regardless. Either if it was perceived too low or it was higher and Tesla missed.

These guys are all mad because without numbers to put into their flawed models, they have no clue what to do. Perfect! And now what do they do about ‘consensus’!? If you have no frame of reference in which to rig your game, what is there to narrate for the next couple of months? Oh, yeah - Tesla is run by a bunch of children. Honestly, Dan. Too bad WS isn’t been running by not-adults because Tesla’s not-adults are doing what no other adults have ever been able to do in the history of adulthood. Maybe take notes.

 

[Artful Dodger]

Need for decision support:
My finger was already hovering over the buy button more than once this morning.

Dollar cost averaging may work well in your situation, especially if you have recurring income and a long investment horizon.

When in doubt, buy half, expect more manipulations, avoid margarine!

"fake shares" haha...

Cheers to the Longs!

 

[SOULPEDL]

When Nintendo made the Wii, they purposefully left themselves production constrained.
Tesla is a different beast, but consider this:
Cost per vehicle is BOM + labor per car + overhead per car
BOM drops a little with volume and overhead per car drops fairly linearly with volume. However, labor does not have so easy a trend line because it (typically) gets added in full shifts.
Say one shift fully utilized makes C cars at a labor cost of L/C per car.
Bump production 20%, now a full additional shift is needed (unless you go with irregular scheduling). So you have 2L/1.2C = 1.67L/C, a 67% increase in labor cost per car. Berlin has labor rules which make additional shifts even more disadvantageous so it's >2L.

The 17% reduction in factory overhead per car isn't going to make up for that, especially considering factory overhead is really a constant that gets amortized at the end so there are no savings in volume. There is also the step change of stamping and casting capacity to deal with.

To optimize margin, Tesla wants to get demand aligned with maximum output of the current shift capacity. A small increase in demand beyond that works against them. Either wait time starts increasing or they bump up pricing to reduce demand. Only when there is a large amount of excess demand does shift adding make sense. Cybertruck's backlog definitely supports multiple shifts.

Future with Optimus changes this I bet think.

This essentially goes away with Optimus as the costs to add more shifts becomes linear and proportional (a robot can work shorter or longer each day). The new workers would only need extra battery breaks is all.

And if a factory isn't 24/7, you have equipment warm-downs every night. This makes the case to run 24/7 at a slower pace to meet demand exactly, everyday. Wow, how things will change in the future!