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

[Xd85]

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 completed 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.

Do we think the “inquiry” request into naked shorting of DJT (if not just hot air) will materialize into anything? If so over time it should narrow the dog - tail discrepancy.

 

[Krugerrand]

Basic driving just isn’t that hard for humans.

Have you ever watched your fellow man drive!? If we’re so good at it, why are their dents and scratches on so many vehicles. Why do people curb their vehicles so often. Why are people always needing assistance; lane assistance, sensors, backup cameras with lines, seatbelts - the list of aids is endless. Why are insurance rates so high? It’s not all comp claims. People get hurt everyday in cars. People die everyday in cars.

If driving isn’t so hard for us; I’d hate to see it if it was hard.

If driving isn’t so hard for us; then how can Tesla’s incomplete, not yet level 69, not yet ready for prime time, shouldn’t be called autopilot autopilot already be lowering accident rates and saving lives? What a waste of time Tesla! Driving isn’t that hard for humans.

 

[Gigapress]

Indeed, pouring cash into bright shiny objects 6 years ago starved both the 4680 development and the development of TE worldwide. There were virtually no players but Tesla did the worst thing possible. Created a market and business model and then did not invest. It is a mind boggling bad. It was at that point that I had my huh moment with Tesla. Today they are a tiny tiny niche player and CATL, LG, Samsung, BYD and many others are racing to fill it along with 100 generic entities.

Tesla will expand but what an opportunity missed. This would have dramatically moved the sustainability needle, it would have shifted the solar market forward by several years & shuttered many many more old plants.

I remain unconvinced as to either the profits nor sustainability outcome of TaaS. Energy though was perfectly aligned with very little capital required.

This is wrong in so many ways.

1. In fact, they poured most of their operating cash flow not into shiny objects but rather into:

• Factory construction and associated inventory of parts and work-in-progress (including the Lathrop megapack factory)
• Paying off debt
• Increasing completed vehicle inventory as a result of growth and unwinding the quarterly delivery wave
• Building up their stockpile of cash and cash equivalents.

In the last few years, they weren’t holding back on any capital expenditures due to lack of cash, which they explicitly told investors on earnings calls. In other words, cash was not the limiting factor for R&D or growth in any part of the business. If I may paraphrase, I distinctly remember that a couple years ago Elon said something like “If there was a factory that produced excellent engineers, we would buy as many as they could sell us.”

2. In 2018 and 2019 the correct priority was Model 3 and Y ramp. Then during the pandemic, Tesla deliberately decided to allocate limited chip supply to vehicles instead of stationary storage, which they explicitly told investors on earnings calls. Nonetheless, the energy storage side of the business did grow considerably during that period.

3. Tesla is not a niche player in storage. They are the *largest* player and probably have the best margins. Refer to recent posts by @Musskiah and others for details.

4. In total, Tesla Energy has grown storage deployments by about 25x in the past six years. How much faster would they have needed to grow so that you would not consider it a mind bogglingly bad missed opportunity? If we want to say solar and powerwall growth has been neglected and is disappointing then okay, but grid-scale storage? Come on.

 

[mongo]

Weekend OT:

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

Supervised: yes, so when you disengage it's in the correct orientation
Unsupervised: user option along with pedal disable. If disabled, you can't inadvertently disengage the system (like in your sleep)

 

[cab]

My recent thoughts about RoboTaxis and FSD have definitely evolved and I think they - standalone RoboTaxis and personal vehicles with FSD - will co-exist and become the "norm" much sooner than I would have expected. Indeed, with regard to personal vehicles with FSD I can see that feature becoming like the ultimate example of the following:

- automatic transmissions
- power steering
- power brakes
- AC
- electric door locks
- electric windows
- Keyfob door lock/unlock
- auto wipers
- heated seats
- heated steering wheel
- navigation systems
- keyless entry
- etc.

If you pay attention to the list above you will notice NONE of those are NEEDED to drive a car. Initially, they were all viewed as "luxury" items. Indeed, folks often poo poo'd them with statements like "I can shift my own gears" or "I can roll down a window myself". I remember, over time, slowly getting exposed to these features and then, just like that, I was like "I am never getting another car without this feature again!". Heck, despite my wife and I both driving BMWs, it wasn't until we bought my son a used Ford Focus SVT that we'd ever had a car with heated seats before. We never needed them since "We live in Texas. Who needs heated seats?" - that first year, the Winter was a bit colder than normal and we LOVED taking the dang Focus out for the seats! Virtually every car since...yeah, heated seats. Same with keyless entry. It seemed like such a luxury before I had it. Now....mandatory, baby!

I see FSD becoming the ultimate version of this....and it won't have to even be perfect to end up with a "gotta have it" take rate.

 

[Musskiah]

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.

Truth!

Specifically, delta hedging and naked shorting (particularly in dark pools) are the primary mechanisms by which the tail wags the dog.

 

[Knightshade]

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.

Bear in mind that's 373 miles by the WLTP standard- it would be quite a bit lower under EPA standard....one of the Mach E trims was 373 WLTP and only 300 EPA for example.

20ish% percent less is pretty typical

How To Convert Conflicting EV Range Test Cycles: EPA, WLTP, CLTC

EV range is super important as we push for adoption. However, with various test cycles, it can get quite confusing. Now, you can easily compare conflicting data.

insideevs.com

 

[Krugerrand]

Truth!

Specifically, delta hedging and naked shorting (particularly in dark pools) are the primary mechanisms by which the tail wags the dog.

Like raise your hand if you weren’t here or aware of the day TSLA literally dropped from $900ish to $600ish almost instantly? Pre any splits

I bet @Artful Dodger has the date seared into his mind. The dog couldn’t have walked a straight line that day if it was in the equivalent of a cattle chute. And what got us to the quite quick rise to $900 in the first place? It wasn’t the dog chasing a squirrel.

 

[nativewolf]

This is wrong in so many ways.

1. In fact, they poured most of their operating cash flow not into shiny objects but rather into:

• Factory construction and associated inventory of parts and work-in-progress (including the Lathrop megapack factory)
• Paying off debt
• Increasing completed vehicle inventory as a result of unwinding the quarterly delivery wave
• Building up their stockpile of cash and cash equivalents.

In the last few years, they weren’t holding back on any capital expenditures due to lack of cash, which they explicitly told investors on earnings calls. In other words, cash was not the limiting factor for R&D or growth in any part of the business.

2. In 2018 and 2019 the correct priority was Model 3 and Y ramp. Then during the pandemic Tesla deliberately decided to allocate limited chip supply to vehicles instead of stationary storage, which they explicitly told investors on earnings calls.

3. Tesla is not a niche player in storage. They are the *largest* player and probably have the best margins. Refer to recent posts by @Musskiah and others for details.

4. In total, Tesla Energy has grown storage deployments by about 25x in the past six years. How much faster would they have needed to grow so that you would not consider it a mind bogglingly bad missed opportunity?

View attachment 1042403

This is wrong in so many ways.

1. In fact, they poured most of their operating cash flow not into shiny objects but rather into:

• Factory construction and associated inventory of parts and work-in-progress (including the Lathrop megapack factory)
• Paying off debt
• Increasing completed vehicle inventory as a result of unwinding the quarterly delivery wave
• Building up their stockpile of cash and cash equivalents.

In the last few years, they weren’t holding back on any capital expenditures due to lack of cash, which they explicitly told investors on earnings calls. In other words, cash was not the limiting factor for R&D or growth in any part of the business.

2. In 2018 and 2019 the correct priority was Model 3 and Y ramp. Then during the pandemic Tesla deliberately decided to allocate limited chip supply to vehicles instead of stationary storage, which they explicitly told investors on earnings calls. Nonetheless, energy storage side of the business did grow considerably during that period.

3. Tesla is not a niche player in storage. They are the *largest* player and probably have the best margins. Refer to recent posts by @Musskiah and others for details.

4. In total, Tesla Energy has grown storage deployments by about 25x in the past six years. How much faster would they have needed to grow so that you would not consider it a mind bogglingly bad missed opportunity?

View attachment 1042403

Well lets look at the sustainability issue. It's all about batteries. We had this conversation a couple of years ago. It was all about batteries in 2006, 2007, 2008, 2009, 2010, 2011, 2012,2013,2014,2016,2017, 2018 ....and still is about batteries.
Tesla did not invent small inexpensive Li batteries, 18650, 2170, etc. They simply followed on the work of some researchers who had assembled tiny little batteries into not so small packs and built an EV that was not dependent on weak lead acid nor on patent limit products. Without supplies at scale of these small batteries..no Tesla.

Fast forward from 2006 to 2017 and it is clear Tesla is scaling. The factory sleep in must have sucked but the 3 had seemingly unlimited demand. The excess capacity that had been around for poweralls was no longer there and Tesla had a different issue. They needed more battery capacity. One can be brutal and say they should have secured that in 2016 but by late 2017..surely. By 2018 they are building Shanghai but it didn't solve the battery issue. In fact the opposite. There was nothing in 2017 & 2018 to keep Tesla from investing in a second GF for battery capacity. It was abundantly clear Reno was not enough.

Solar was always tangential, not directly aligned because the core of that product was not a battery. The core of energy storage and EVs are batteries.
Today they continue to focus on the bright shiny objects instead of the boring business side of things.

They could have solved the battery capacity issue in many different ways. Partnered with CATL on 3 factories (one in each major geography), only $3bln in cash was a silly reason to not build battery capacity when it was clear margins were very high, capex was far lower than EVs, and the market was going to happen due to renewable deployment.

Perhaps @petit_bateau would jump in with thoughts. He is an industry expert.

 

[Musskiah]

Like raise your hand if you weren’t here or aware of the day TSLA literally dropped from $900ish to $600ish almost instantly? Pre any splits

I bet @Artful Dodger has the date seared into his mind. The dog couldn’t have walked a straight line that day if it was in the equivalent of a cattle chute. And what got us to the quite quick rise to $900 in the first place? It wasn’t the dog chasing a squirrel.

Feb 4 2020

I'll never forget it. My Feb and Mar 2020 call options that I bought in Dec lost half their value instantly, luckily IV stayed high and I got out a few weeks later, but not for the big big life changing money ...that I had to wait a whole 6 more months for

 

[Krugerrand]

Well lets look at the sustainability issue. It's all about batteries. We had this conversation a couple of years ago. It was all about batteries in 2006, 2007, 2008, 2009, 2010, 2011, 2012,2013,2014,2016,2017, 2018 ....and still is about batteries.
Tesla did not invent small inexpensive Li batteries, 18650, 2170, etc. They simply followed on the work of some researchers who had assembled tiny little batteries into not so small packs and built an EV that was not dependent on weak lead acid nor on patent limit products. Without supplies at scale of these small batteries..no Tesla.

Fast forward from 2006 to 2017 and it is clear Tesla is scaling. The factory sleep in must have sucked but the 3 had seemingly unlimited demand. The excess capacity that had been around for poweralls was no longer there and Tesla had a different issue. They needed more battery capacity. One can be brutal and say they should have secured that in 2016 but by late 2017..surely. By 2018 they are building Shanghai but it didn't solve the battery issue. In fact the opposite. There was nothing in 2017 & 2018 to keep Tesla from investing in a second GF for battery capacity. It was abundantly clear Reno was not enough.

Solar was always tangential, not directly aligned because the core of that product was not a battery. The core of energy storage and EVs are batteries.
Today they continue to focus on the bright shiny objects instead of the boring business side of things.

They could have solved the battery capacity issue in many different ways. Partnered with CATL on 3 factories (one in each major geography), only $3bln in cash was a silly reason to not build battery capacity when it was clear margins were very high, capex was far lower than EVs, and the market was going to happen due to renewable deployment.

Perhaps @petit_bateau would jump in with thoughts. He is an industry expert.

What an interesting rewrite of history.

 

[Musskiah]

Bear in mind that's 373 miles by the WLTP standard- it would be quite a bit lower under EPA standard....one of the Mach E trims was 373 WLTP and only 300 EPA for example.

20ish% percent less is pretty typical

How To Convert Conflicting EV Range Test Cycles: EPA, WLTP, CLTC

EV range is super important as we push for adoption. However, with various test cycles, it can get quite confusing. Now, you can easily compare conflicting data.

insideevs.com

Good point!

 

[mongo]

What an interesting rewrite of history.

Yeah, like Tesla wasn't dragging Panasonic along and giving them a building to use just so they could have cells...

 

[jerry33]

Weekend OT:

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

It probably will, at least at the current FSD level, as an indication to the driver.

 

[Gigapress]

There was nothing in 2017 & 2018 to keep Tesla from investing in a second GF for battery capacity.

Lmao yes there was. Model 3 production preparation followed by production hell was an all-hands-on-deck situation. People were pulled away from other business units, including Energy, to pitch in. They literally had C-level executives walking the production line and sometimes personally helping out in General Assembly.

Tesla only had a few quarters worth of cash in reserve and was burning through it rapidly. They had $7B of recourse debt looming on the balance sheet. There was furious FUD flying around and the general consensus was that Tesla was on the verge of imminent bankruptcy, and that the numbers were probably fraudulent anyway. More risk and more financial commitments simply were not viable.

Also the Nevada gigafactory was supposed to grow much larger than it did. As I recall, Panasonic was unwilling to invest more of their own resources into expansion at that time until Tesla stabilized production and showed they were going to be a reliable customer. Remember that in 2017 the notion of having a humongous battery factory at all was considered crazy. Panasonic was taking on major financial and reputational risk, even just with the commitments they did make.

 

[NicoV]

Tomorrow is a good day to charge your EV in Western Europe:

https://twitter.com/x/status/1784177276692697115

 

[Usain]

Weekend OT:

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

Good question, but I'm quite sure the answer is yes. The wheel needs to be in the proper position if the driver has to take over.

 

[unk45]

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

Indeed, just right for NA and the medium size class for most of the rest of the world.

 

[Musskiah]

@

Please understand that the stationary storage market is global. There are numerous major competitors in large scale stationary storage, well documented both here and elsewhere. From CATL, Huawei, BYD , and Siemens and so on, noting a lost that includes some you've never imagined:

7 Battery Energy Storage Companies and Startups - GreyB

This report will discuss some major companies and startups innovating in the Battery Energy Storage System domain.

www.greyb.com

What many of us fail to recognize is that although Tesla invented the Autobidder and established the Hpornsdale Power Reserve, the rest of the world has been rapidly developing and now is far more wides[read than has been Tesla.

Indeed Tesla Energy has a bright future, which would have been much brighter had TE ramps been far faster and the sales and service functions and been staffed to support finicky public utility and commercial customers. Yes, growth, but much of that growth has been taken by those dozens of competitors.

What next for the 5 biggest BESS integrators? - Tamarindo

tamarindo.global

This is CUMULATIVE Installed capacity of BESS in operation. Tesla is #3 or #4 depending, and losing share, to the point of. @unk45 and others
At the top of the heap, Fluence is a Siemens & AES company.

Key takeaways...

"Together, the top five have installed more than a quarter of the energy storage currently in operation globally. The top five in terms of installed projects (that is, projects completed as of July 2023) are, in descending order: Sungrow, Fluence, Tesla, Wärtsilä and Hyperstrong. However, there are indications that Fluence will take over as the global leader, while Wärtsilä will also significantly increase its market share, largely at the expense of Tesla. When measured in terms of global pipeline (that is, installed and contracted projects), the top five integrators, according to S&P, are (in descending order): Fluence, Sungrow, Wärtsilä, Tesla and Hyperstrong."

 

[SOULPEDL]

Good question, but I'm quite sure the answer is yes. The wheel needs to be in the proper position if the driver has to take over.

That Wheel position on FSD would be exactly Horizontal with "Tesla" easy to read. No need for it to spin, there could be animals in the car... Fling... BAM!