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

[Musskiah]

Maybe this is why Tesla isn't moving faster. If someone else is capably achieving that aspect of the Mission, it would be on par for Tesla to shift to technologies that will be more impactful where there is an absence of leading players.

Still, they could manage a 5% share of world megapack production and make good bank for decades, and also focus on other projects like BEV, AI, robotics, and whatever they come up with next.

It is easy to disprove the notion that Tesla Energy isn't moving fast. The numbers show Tesla Energy did (2022 to 2023) & will continue to grow faster than Global BESS CAGR, which means they are growing faster than the market. They currently enjoyed 16.3% market share in 2023. They are A, perhaps THE dominant player. Or maybe CATL or Samsung/Stellantis is #1. These 3 (and others) will battle it out for #1, many others will try to compete, many will fail. Just like the solar shakeout of the early oughts (2000s) the industry will mature and consolidate. Tesla Energy will remain dominant because Tesla is a hypergrowth company.

 

[2daMoon]

I understand there are several new entrants in the BESS market. Thank you @unk45 for the info, I very much value your insights along with @nativewolf and @2daMoon

FACT: Tesla is at the top, and will remain at the top of the BESS market. How do we know this? Two simple points (point (1) has 2 parts):

(1) "According to the IEA's Batteries and Secure Energy Transitions published on April 25, the global market for BESS doubled in 2023, reaching over 90 GWh."***

TESLA DELIVERED 14.7GWh OF A 90GWh market in 2023. In other words, TESLA ENERGY provided 16.3% of the entire BESS market in 2023 with many NEW players (still far fewer than the 60+ ESTABLISHED auto brands, still very dissimilar).

"Analysts at S&P Global Commodity Insights forecast global battery capacity in the power sector to rise above 600 GW in 2030."***

FROM LATHROP AND LINGANG ALONE, TESLA WILL HAVE MINIMALLY 80GWH OF CAPACITY BY 2030, LIKELY MUCH MORE AS SEVERAL MORE MEGAFACTORIES WILL BE DEPLOYED BY THEN. EVEN WITH ONLY 2 MEGAFACTORIES IN 2030 (AND THERE WILL BE MORE), TESLA ENERGY WILL MAINTAIN 13.3% (80GWH/600GWH) BESS 2030 MARKETSHARE.

***SOURCE: https://www.spglobal.com/commodityi...age-systems-capacity-doubles-in-2023-iea-says

(2) @unk45 According to your article, CAGR for BESS is expected to be 27% through 2030. Simply put, we know Tesla will grow faster than this until 2027 thanks to Lathrop and Lingang, likely nearer to 100% CAGR by deployment volume. The logic is simple: If Tesla Megapack production/deployment grows more than the global BESS market (~100% > 27%), they will capture more market share than the BESS competition. Furthermore, as they announce more Megafactories (Southeast Asia looks to be imminent), we will get more clarity to 2030.

This touches on what I meant about Tesla specializing in "manufacturing places to manufacture things."

This gives them a leg up for expanding their presence in the market. Though I do think they knew more batteries were inevitable and could have been building Megapactories in preparation.

 

[geometro]

https://twitter.com/x/status/1784247662121816424

Troy created this rumour and now Jordan has jumped on it…

And no basis for it.
This car would still be slightly too large for Europe/Asia.

 

[AndrewZ]

One word: options

That’s the why of it all.

But does the tail wag the dog? Or are there are underlying earnings-related reasons for why options positions are taken.

 

[Zaddy Daddy]

The stationary storage business inherently has better operating leverage than the auto business. Operating margin at 200 Gwh scale should not be much less than gross margin. There’s also the recurring stream of service/maintenance and SW revenue that will become very meaningful as the deployed base approaches the Twh scale. It will be a great business even at 15% to 20% gross margins.

Sure I agree it’s a great business. And there will be massive growth long term as combination with solar is the long term future of energy generation.

Automotive margins were temporarily elevated due to an unprecedented increase in money supply - completely dissimilar to the reasons that Megapack margins are high. There are an enormous number of well established OEMs in the Automotive market; in stationary storage, at mass scale, there will be few to truly compete. Without responding to you point by point, I'll just say it's a mistake to try to compare Automotive margin behavior to Energy Margin behavior.

The comparison of behavior is really pointed toward the TSLA investor mentality repeated, not the technology.

Megapacks are a relatively simple technology and there will be plenty of world competitors. U.S tariffs imports that will help Tesla here but that’s it.

 

[Musskiah]

Tesla never set out to dominate any market. It was created to spur on the world. It some ways that’s happened. In others not so much. The path has wandered a bit; the goal’s the same.

Exactly this! Tesla could never do it all. They are inspiring the world to change through competition and innovation.

 

[Zaddy Daddy]

The stationary storage business inherently has better operating leverage than the auto business. Operating margin at 200 Gwh scale should not be much less than gross margin. There’s also the recurring stream of service/maintenance and SW revenue that will become very meaningful as the deployed base approaches the Twh scale. It will be a great business even at 15% to 20% gross margins.

Sure I agree it’s a great business. And there will be massive growth long term as combination with solar is the long term future of energy generation. But people keep ignoring that that volume expansion will only make sense if battery ASPs come down significantly for the consumer. And they will.

You make a good point about energy margins.

I don’t know at what CAGR Tesla will grow energy over 5 or 10 years. Maybe 50-70%?

Maybe Tesla can grab a 200-300 billion valuation for Tesla energy. Maybe worth $100 in share price movement.

 

[2daMoon]

I disagreed because there definitely is not a "staggering advantage" anymore.

To be clear, what I wrote was meant to impart how "battery plus solar and wind" has a staggering advantage over fossil fuel energy production in the way BEVs have over ICE.

If you thought I was saying Tesla's flavor of BESS has a staggering advantage over other manufacturers of BESS, then I can understand the disagree. I disagree with that as well.

 

[Open Interest]

And no basis for it.
This car would still be slightly too large for Europe/Asia.

I would love this! And I’m sure the crowd that loves the RAV4 and CRV would go for it.

 

[wipster]

https://twitter.com/x/status/1784247662121816424

Troy created this rumour and now Jordan has jumped on it…

As demonstrated by GigaBerlin's new RWD LR Y which now reaches 600 km (373 miles) of range and sells at 3(ish) pricing, if Tesla sees the opportunity and it's relatively easy to accomplish, they will make it so. Would love to see this rig come to North America especially Washington state! With the new EV lease and purchase price reductions, Tesla would easily have a quite capable $25K EV.

 

[y_naught]

It's weird that any teenager can learn to drive in a few months but to become an astronaut it takes years of training an only an elite few qualify. I agree though the path to fly into space is known and usually zero obstacles to worry about when the flight path is planned. Similar to creating autopilot to drive on an empty highway/motorway in terms of navigation.

Basic driving just isn’t that hard for humans. In the FSD future, I think drivers ed will focus on parking, navigating parking lots, and edge case maneuvers. Like taking a plane trip, where passengers just need to know how to pack and whether they are checking a bag or carrying it on.

I’m know nothing of astronaut training, but I would speculate the difference in training time has more to do with the criticality of failures than the difficulty of the task. A mistake driving generally is limited to some small body damage or other recoverable co sequences. In space, a small error can be fatal to the mission and crew. So the training is on redundancies, work around, recoveries, etc.

 

[growler23]

Okay, there is something to that.

Though, for context, think about how long it took to get the teenage brain to that point. (millennia)

Indeed. I think there is much food for thought there about the flexible task-learning skills of our squishy primate brains.

 

[gillfoto]

FSD saves the Day: Be careful out there folks! (Note that automatic emergency braking EAB is now built into FSD, they are no longer separate since about v12.3.3)

https://twitter.com/x/status/1783814624791380153

Asking for trouble? She didn't have her hands on the wheel surprised FSD did not warn her or cancel out FSD.

 

[Musskiah]

I don’t know at what CAGR Tesla will grow energy over 5 or 10 years. Maybe 50-70%?

Maybe Tesla can grab a 200-300 billion valuation for Tesla energy. Maybe worth $100 in share price movement.

In 2027 (or 2028 at the latest) Tesla Energy will recognize close to $10B in profits from realizing unrecognized revenue alone (not even accounting for additional profits from Megapack deployment revenues that year) coming from lagging revenues when bith Megafactories are fully ramped. If they are growing profits at 50% annually, this is a $500B valuation ($10B x 50PE) on lagging revenues (profit) alone. If they do another $50B in revenues with 20% margins on top of this, that's another $500B to add to valuation. I think your numbers are far too conservative.

 

[Tony73]

In 2027 (or 2028 at the latest) Tesla Energy will recognize close to $10B in profits from realizing unrecognized revenue alone (not even accounting for additional profits from Megapack deployment revenues that year) coming from lagging revenues when bith Megafactories are fully ramped. If they are growing profits at 50% annually, this is a $500B valuation ($10B x 50PE) on lagging revenues (profit) alone. If they do another $50B in revenues with 20% margins on top of this, that's another $500B to add to valuation. I think your numbers are far too conservative.

When Musk says Tesla is “worth zero” without autonomy, that is obviously just hyperbole. Today’s valuation is justified based on future cash flow streams from auto, energy and charging. Plenty of Tesla bulls on Wall Street do not have autonomy anywhere in their models.
Anyone buying Tesla today gets a zero cost option on FSD and Optimus.

 

[Linkmeup]

1 fast charging station in 5 gas stations in CA now

There’s Now 1 Fast Charging Station for Every 5 Gas Stations in California | California Governor

SACRAMENTO – Here’s a stat most Californians have likely never heard: for every five gas stations in California, there’s now one electric vehicle fast charging station. Governor Gavin Newsom dropped…

www.gov.ca.gov

 

[Gigapress]

Is Tesla building a top sales force? Or does Elon think they can just sell MP online and ignore sales and marketing? If TE customer service/sales is anything like automotive (non-existent and hard to find) then no wonder they don't get many projects.

What do you mean they don’t get many projects? Tesla is the leading provider of large battery systems, and the Megapack is sold out for over a year despite prices that are garnering 30%+ gross margin including hardware, installation, and long-term service. You can’t even place an order on the website anymore. Tesla replaced the order form with a form to inquire about Megapack.

 

[Ellec]

When Musk says Tesla is “worth zero” without autonomy, that is obviously just hyperbole. Today’s valuation is justified based on future cash flow streams from auto, energy and charging. Plenty of Tesla bulls on Wall Street do not have autonomy anywhere in their models.
Anyone buying Tesla today gets a zero cost option on FSD and Optimus.

I agree, Tesla is building multiple Trillion dollar business and have more coming. If it executes well on all of these we are looking at a lot of upside on the market cap. I believe they can execute and align with their overall mission, hence I am accumulating as much as possible on top of my previous investments especially at the price now.

 

[Krugerrand]

But does the tail wag the dog?

Seems an odd or newbie question considering we know for a fact the tail wags the dog. TSLA has often been responsible for having 50%+ of the entire options market. One ticker carrying half or more of the whole options market. Seems that’s how the system should work, huh? Then we’re going to ignore the fact that TSLA has spent most of its history completely disconnected from the company. Or we’re going to ignore that TSLA has historically been one of the most volatile tickers with several examples of incredible drops upwards of 30% in a SINGLE day, 50% in a few days - all while absolutely nothing changed at the company.

Sure. Ok. Nothing to see here. Everything on the up and up. The dog’s in full control of all its extremities.

 

[jkirkwood001]

Weekend OT:

When Cybertruck gets FSD, will the steering wheel move? Hmmm.