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

[Musskiah]

They will be out in 10 cities by the end of next year and that is what they service with the 50k vehicles they bought from Geely. They are basically telling you exactly what they'll do. It's not a secret. They think 50k vehicles covers 10 cities more or less. That's about what Uber has working those cities. SO.....so....Waymo plans to take all the Uber rides. They can too. The cost of the vehicle is noise in the wind. Literally meaningless. Million miles on $50k or $25k vehicles ...it just doesn't matter. Google will make it all back on ads and more.

10 cities (not even the entire cities, just very small geofenced areas of those cities) and 50k vehicles by the end of NEXT year? I'll ask you again, how do you suppose they scale quickly enough to compete in every market? In my view, 10 cities and 50k cars by 2026 is about two orders of magnitude too small in both locations and autonomous vehicles to compete with Tesla in 2026.

 

[Doggydogworld]

They will be out in 10 cities by the end of next year and that is what they service with the 50k vehicles they bought from Geely.

Source for the 50k? Waymo themselves say they ordered 62k Chrysler Pacificas and 20k Jaguar i-Paces back in 2018. They took delivery of....... fewer.

They are basically telling you exactly what they'll do. It's not a secret.

it's a secret to me, and I've followed them pretty closely for over a decade. All I know is they first mentioned the Zeekr in 2021 and here in 2024 not one Waymo Zeekr has been seen road testing. They tested the Jags for something like 4 years before deployment. So 50k deployed by end of next year strikes me as sheer fantasy.

They think 50k vehicles covers 10 cities more or less.

5k per city is a nice round number, but ~20x what they use in SF and Phoenix today. They only use 50 cars in LA. They scaled rides 5x in the last 12 months. Even if they maintain that pace (harder as they grow) they'll still need less than 5k cars in SF and Phoenix and less than 1k in LA.

Continued 5x/year scaling would put them at 700k rides/week at YE 2025. That's 100k/day. They said 20k Jags could provide 1 million rides a day. So continued 5x scaling has them needing only 2000 cars at YE 2025. Maybe double that because the Jag statement was overoptimistic.

I'd love to see them get a lot more aggressive. But it's not their nature. And I don't think their unit economics support it yet.

 

[SPadival]

Never go full @TrendTrader007

or should we?

https://twitter.com/x/status/1789422751880552695

 

[MP3Mike]

No, it is clear! They would NOT. Even back when Chase Auto Finance experiments with Volvo ten year loans it was Volvo which paid the consequences. Commercial finance companies operate captives and offer subvened financing at times.

I wonder if things have changed... Dealers get kickbacks from the finance companies. Someone at work recently leased a Rav4 Prime with the intention of immediately buying it out. (Just to get the $7,500 tax credit they otherwise wouldn't qualify for.) The dealer told them that if they don't make at least 3 payments the dealer gets nothing, and paid them $1,000 to not buy it out immediately.) Maybe Tesla accepts a smaller kickback to get lower rates.

 

[DarkandStormy]

@DarkandStormy
yet =>you<= were basing your 2% of 100% right side Y axis, <==

The Left axis is irrelevant to the discussion.
I suspect you read it incorrectly for some unknown reason

If you are using bad or incomplete data or interpretation of same, just say so.
I have had to eat plenty of crow over the decades and it is easy to do when necessary

No, I based it on the fact that ~70 is 2% of 3,500 and that happens to line up with the right side of the Y axis.

Sorry you don't know how to read graphs my guy.

 

[Captkerosene]

I posted this on a Berkshire Hathaway board:



Musk recently said on X that WEB should invest in Tesla. Comments like this from Musk should be taken seriously. Remember the "Should I buy Twitter" statement. I put this in the same category, kind of an invitation.

In the past whenever anyone has speculated that WEB has or will buy Tesla shares I've always said there was a zero chance of that happening. We all know why: circle of competence, price and hard to predict earnings etc. Add WEB's sometimes mildly critical comments about Musk to the list as well.

But, right now there is a unique opportunity presenting itself: Musk wants out of many of the businesses he's in. Not because they are bad businesses - they're great businesses - but because he has better opportunities to focus his attention and limited resources on.

Musk started X.ai about a year ago. They're currently raising 6B at a 20B valuation. (20B out of nowhere ... nice.) Tesla is investing 10B this year on compute. I think Elon needs another 50 or 100B to fund his ambitions in AGI. (No small-ball here.) He seems very focused on AI/robotics and is cutting his Capex at Tesla to preserve the 26B that's already in the bank. (Musk recently commented on when Netflix spun off their DVD business in favor of streaming. He said to apply that logic to Tesla.) He's also commented that Tesla is "pivoting."

I won't go into whether a hard pivot to AI/robotics is a good idea. What's important is that Musk's open to some kind of transaction for his legacy businesses. Specifically, I think that insurance, stationary energy storage, Supercharger/Megacharger and lithium refining might be on the table. Less appealing would be solar and battery production. I could see hundreds of Billions of dollars deployed into these businesses over the next ten years at good rates of return. Combined, they have excellent products with huge and growing TAMs that are complementary to BRKs current businesses.

On the personal side of things. I think WEB and EM have always admired each other. Bill Gates was an issue but that is behind them.

What would a transaction look like? I have no idea. It needs to solve the capital deployment and growth stagnation issue for WEB and the capital needs and focus issue for EM.

Of course there's more speculation than fact in my comments above. A lot of connecting the dots with no clear picture. Still, stranger things have happened. I'll go back into my Tesla/BTC hibernation now.

 

[DarkandStormy]

https://twitter.com/x/status/1789369417345720449

 

[willow_hiller]

https://twitter.com/x/status/1789369417345720449

This is kind of a useless statement. How are we measuring an increase or decrease in demand? What are we measuring it in relation to? What's the baseline?

For all we know, the Highland created a massive increase in demand that was offset by a high-interest-rate environment or other factors that were outside of Tesla's control.

 

[willow_hiller]

Why are you responding to it.

I decided to take everyone off of my ignore list today. I realized that if we ignore the people that are spreading misinformation and disinformation in this thread, it kind of creates a "shadow" thread where all of that goes unchecked and unquestioned.

To observers of this thread that might not have an account with which they can ignore people, they see all of that. To them it looks like reasonable information sitting along side our conversations. I don't want this thread to legitimize bad information in that way.

As I said in another recent post, I think we must find a balance between challenging misinformation and not clogging up this thread with pointless arguments.

 

[⚡️ELECTROMAN⚡️]

I decided to take everyone off of my ignore list today. I realized that if we ignore the people that are spreading misinformation and disinformation in this thread, it kind of creates a "shadow" thread where all of that goes unchecked and unquestioned.

To observers of this thread that might not have an account with which they can ignore people, they see all of that. To them it looks like reasonable information sitting along side our conversations. I don't want this thread to legitimize bad information in that way.

As I said in another recent post, I think we must find a balance between challenging misinformation and not clogging up this thread with pointless arguments.

I'm not against negative viewpoints. I have some of my own.

 

[AZRI11]

You explain your position well. I don't think the issue is actually whether or not it can work. It will surely be longer than many want but will also surely work. I firmly don't believe it makes transport sustainable and I don't believe the profits will be there.

The roll-out will be gradual, the average car lasts 12 years. Rural areas will be uneconomical for ..well maybe forever. Work vehicles..not going to move anytime soon, etc etc. The average American drives a lot. The average house has a commuter and a bit more. The commuting traffic surge is hugely problematic for the robotaxi vision. It breaks it. There is no repair to that break. So you can either have lots of robotaxis doing nothing or not service the commute. If you don't service the commute than you really haven't changed car ownership and so users might as well continue driving because the marginal costs of driving are very low as long as you don't park in urban areas.

Current reasons for TaaS clients are : parking, entertainment, travel. That's almost exclusively what TaaS supports today. It is welcome, makes travel easier, makes having fun safer. It is not huge, a tiny tiny sliver of the transportation market less than 1/100 of 1% of global rides is an estimate.

If you want explore the pattern of a small American city. Take Seattle. 800k people commute in during 2 periods. Figure out the highway use the rest of the day. Understand why Uber services it with 5k drivers. I'm not saying one can't dramatically increase Ubers footprint by cutting cost by 75%. I'm saying if you cut all the costs out of Uber in Seattle (an unprofitable city) than..where is the profit for Tesla. What do 800k cars do in the day because news flash, there are only a fraction of those cars needed between 9am-4pm and almost none (a few thousands) from 7pm-6am. So is it profitable to deploy 400k vehicles to Seattle to service commuters knowing that 90% of the vehicles will have no other rides during the day? So you park 360k vehicles a day...where? You deadhead (ride empty) somewhere you can park them all over the outskirts of Seattle? Then drive back (causing more traffic jams). It actually doesn't model out. Build a traffic flow simulator and test it. I have a model on a spreadsheet and I can't make it work.

To boot the cities with the greatest Uber profits are likely to be expensive for RT or opposed to the automation of lower-middle class lifestyles. In CA electricity rates are soaring. and a small ICE is likely cheaper to run than an EV. NYC is not going to make it easy for RT fleets to deploy. I could go on but I think a gradual turn to RT (like Waymo offers) is more logical and profitable path. I believe Waymo guts the profit out of TaaS when they enter. They seem prepared to do so and unlike rocket launch and satellites I don't see that owning manufacturing greatly distinguishes Tesla from Waymo.

Outside of Rush hours, Tesla autonomous vehicles will do last mile deliveries. Of course they will use Optimus to bring the packages to your door.

 

[insaneoctane]

Elon is not good at PR. Since his recent post Covid heel turn:

Tesla and Elon approval ratings have fallen off a cliff. Half the country hates him, the political right wing he amplifies want to destroy his business, former fans hate him and the majority believe all the FUD about EVs, even when they are told otherwise by EV owners.

The majority think Tesla's are $100k cars,
they need a new $25k battery every 5 years,
they cannot be driven in the winter and don't operate below freeezing,
they may catch fire in the garage,
the grid can't handle EVs,
hybrids are the solution, and even gas cars are better for the environment.

They think Elon is an absolute disastrous, money grubbing (the big truth his fans don't see) billionaire with an unstable, womanizing, multiple baby-mama drama personal life. Go outside of the Tesla/Twitter 'Elon is a God' bubble and see for yourself.

Elon is poor at PR

I don't know, after reading your statement I just think Elon is in the cross hairs of significant and effective FUD.

 

[dhanson865]

So my wife's car was hit, 4 airbags went off, and I'm looking at replacement cars.

TSLA is too low for me to just buy a Tesla without considering cost of insurance so I'm researching insurance.

4 of the 5 most expensive cars to insure are EVs and the 2 most expensive are Tesla.

Even if you don't think Tesla insurance is a direct money maker for TSLA, it clearly affects cost of ownership and thus affordability for lower income buyers to get into a Tesla. So I'm saying if Tesla insurance is run near 0 profit it still will increase profitability of TSLA by way of increasing demand for cars they produce, and the effect that has on pricing of the car to begin with.

I don't think I ever followed up with the actual prices I paid after getting the car.

Vehicle 1 is a 2015 Nissan Leaf
Vehicle 2 is a 2018 Tesla Model 3

and yes that is a 12 month price.

 

[CorneliusXX]

I posted this on a Berkshire Hathaway board:



Musk recently said on X that WEB should invest in Tesla. Comments like this from Musk should be taken seriously. Remember the "Should I buy Twitter" statement. I put this in the same category, kind of an invitation.

In the past whenever anyone has speculated that WEB has or will buy Tesla shares I've always said there was a zero chance of that happening. We all know why: circle of competence, price and hard to predict earnings etc. Add WEB's sometimes mildly critical comments about Musk to the list as well.

But, right now there is a unique opportunity presenting itself: Musk wants out of many of the businesses he's in. Not because they are bad businesses - they're great businesses - but because he has better opportunities to focus his attention and limited resources on.

Musk started X.ai about a year ago. They're currently raising 6B at a 20B valuation. (20B out of nowhere ... nice.) Tesla is investing 10B this year on compute. I think Elon needs another 50 or 100B to fund his ambitions in AGI. (No small-ball here.) He seems very focused on AI/robotics and is cutting his Capex at Tesla to preserve the 26B that's already in the bank. (Musk recently commented on when Netflix spun off their DVD business in favor of streaming. He said to apply that logic to Tesla.) He's also commented that Tesla is "pivoting."

I won't go into whether a hard pivot to AI/robotics is a good idea. What's important is that Musk's open to some kind of transaction for his legacy businesses. Specifically, I think that insurance, stationary energy storage, Supercharger/Megacharger and lithium refining might be on the table. Less appealing would be solar and battery production. I could see hundreds of Billions of dollars deployed into these businesses over the next ten years at good rates of return. Combined, they have excellent products with huge and growing TAMs that are complementary to BRKs current businesses.

On the personal side of things. I think WEB and EM have always admired each other. Bill Gates was an issue but that is behind them.

What would a transaction look like? I have no idea. It needs to solve the capital deployment and growth stagnation issue for WEB and the capital needs and focus issue for EM.

Of course there's more speculation than fact in my comments above. A lot of connecting the dots with no clear picture. Still, stranger things have happened. I'll go back into my Tesla/BTC hibernation now.

It's an interesting idea. Tesla could use the capital raised from selling a minority stake in those ventures to fund expansion plans while not giving up too much vertical integration, and giving an investor like WEB an avenue to deploy funds for growth in return for relatively stable revenues.

I suspect WEB would see Elon as too likely to switch directions to invest but other investors may be more interested.

On the other hand, I can't yet see that cash is the constraint on growth, and I'd prefer that Tesla go and raise some debt before selling assets. If there was an investor out there prepared to pay a big premium then it might make sense regardless.

 

[alexxs88]

@DarkandStormy
yet =>you<= were basing your 2% of 100% right side Y axis, <==

The Left axis is irrelevant to the discussion.
I suspect you read it incorrectly for some unknown reason

If you are using bad or incomplete data or interpretation of same, just say so.
I have had to eat plenty of crow over the decades and it is easy to do when necessary

It puzzles me why you're so confused and aggressive about this. Without going into the validity of the data, why would you outrightly assume the right axis' maximum value should be 100%. If you want to represent time-based evolution in the single digit percentage, there's no logical reason to scale the graph all the way to 100%, since you'd lose valuable resolution information for no reason.

 

[alexxs88]

Hi, MP3Mike --
I'm unclear as to why a finance company would be willing to do this.
Yours,
RP

They get kickbacks from the seller. My company offered (through klarna) 0% 12 month payment plans for our products (1000-4000 € sales) and we, as the seller, were paying klarna 18% of the sale price back. That's with reference interest rates in the 0% range.

 

[alexxs88]

People were fired. You act like they were bound, tortured, and publicly humiliated. With every post @alexxs88 you expose your intentions.

Do you genuinely believe that firing an entire department and tens of percent from others is good for morale? This isn't a question about bulls and bears, but common sense.

 

[Dikkie Dik]

Re ‘weak demand for Highland 3 in Europe’, this just doesn’t sit right with me.

I see a healthy demand in the Netherlands which is a good sign, considering that of our BEV fleet of 400K model 3 is at a hefty 52K, they’re literally everywhere you look.

Data for daily reporting countries looks fine too:

Electric Vehicle registrations in Europe: 15 countries, majority of BEV market

Below the record year 2019 but tracking second best now.

Only explanation for market down as a whole could be a total collapse in Germany where subsidies ended abruptly and FUD is at a record high but that might recover later this year.

 

[Matias]

Never go full @TrendTrader007

or should we?

https://twitter.com/x/status/1789422751880552695

FSD is not solved

 

[Usain]

They will be out in 10 cities by the end of next year and that is what they service with the 50k vehicles they bought from Geely. They are basically telling you exactly what they'll do. It's not a secret. They think 50k vehicles covers 10 cities more or less. That's about what Uber has working those cities. SO.....so....Waymo plans to take all the Uber rides. They can too. The cost of the vehicle is noise in the wind. Literally meaningless. Million miles on $50k or $25k vehicles ...it just doesn't matter. Google will make it all back on ads and more.

It's true that high vehicle cost is not the major problem for Waymo.

The major problem is the high cost of operating their network. Waymo requires scores of humans monitoring every ride and intervening when things go wrong. And things go wrong far too often to turn a profit.

Has Waymo said, "We see a clear path to profitability?"