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

[willow_hiller]

seemingly reckless management decisions

You're right.

It was reckless to start a brand new American car company. It was reckless to only produce electric vehicles. It was reckless to push the boundaries of vision-only autonomy.

Elon's recklessness is a double-edged sword. He makes rash decisions that don't always pay off, but he also makes bold decisions that no other CEO would dare attempt. Elon's recklessness got Tesla to where it is today.

I understand how shareholders tolerate reckless behavior when a company is in start-up mode and dislike it when the company is more established. But it's only through taking large risks that Tesla will continue to grow.

The growth narrative isn't over until Elon stops innovating, so I don't understand the desire from some investors for Tesla to sit back, make cheap cars, and rest on their laurels. If we're really focused on the long-term investment thesis, we should embrace the risky, reckless decisions.

 

[MP3Mike]

Note that this is a LOAN specialty deal, not a LEASE deal. The Model Y (nor any other Tesla models) does not have a LOAN deal.

I never said it was a lease... There was a 0.99% loan deal for the Model Y that just expired on 5/31. Maybe only one model at a time will get a loan deal?

 

[FEERSUMENDJIN]

Riding a horse on public roads is arguably a lot more dangerous than riding in a car. But it's still allowed on most roads except highways.

If you can afford the insurance

 

[JusRelax]

I never said it was a lease... There was a 0.99% loan deal for the Model Y that just expired on 5/31. Maybe only one model at a time will get a loan deal?

Thanks, I didn't recall seeing anything regarding a loan deal on any tesla vehicles in the US in the past; I only recall the Tesla China loan deals. For anyone that is like me and hadn't seen a loan deal previously in the US, I found an article regarding that deal:

Tesla launches limited-time 0.99% APR loan rate on U.S. Model Y orders

Tesla has launched its latest buying incentive for the Model Y, this time offering a special, super-low interest rate for those who...

www.teslarati.com

 

[Usain]

In time things like Megapacks, autonomy, and Optimus will rekindle the growth story, and hopefully auto production begins ramping up again too, but until any of those happen TSLA will likely remain underwhelming.

Very true. And when TSLA starts to rise, it rises really fast. I don't want to be out of the stock when it happens.

HODL!

 

[alexxs88]

I understand how shareholders tolerate reckless behavior when a company is in start-up mode and dislike it when the company is more established. But it's only through taking large risks that Tesla will continue to grow.

I think you're making a great point here. To grow a 1m $ company to 2m $ is much much easier than growing it from 1B $ to 2B $. And so on. So yes, in order to grow into its current valuation, Tesla needs to take huge risks that may or may not pay off. But the part I highlighted is the core of the issue. This is not about Tesla's valuation growing, it's about Tesla's profits and turnover growing to justify its current market cap.

The severe market correction is coming mostly from 50% CAGR volume growth being adjusted to single digit "we're lucky if it's positive" growth.

 

[willow_hiller]

This is not about Tesla's valuation growing, it's about Tesla's profits and turnover growing to justify its current market cap.

I don't know about you, but I'm not invested in Tesla based purely on the number of cars they make or the profit they can turn making them. I'm invested in Tesla because of the potential of Elon Musk.

How many investors would jump at the chance to invest in SpaceX, Starlink, Neuralink, the Boring Company, or xAI right now? Does anyone care about the profits and turnover of those companies? Absolutely not. We can see the enormous potential of Elon's vision for those companies, and that alone is worth billions.

 

[advocate8]

You're right.

It was reckless to start a brand new American car company. It was reckless to only produce electric vehicles. It was reckless to push the boundaries of vision-only autonomy.

Elon's recklessness is a double-edged sword. He makes rash decisions that don't always pay off, but he also makes bold decisions that no other CEO would dare attempt. Elon's recklessness got Tesla to where it is today.

I understand how shareholders tolerate reckless behavior when a company is in start-up mode and dislike it when the company is more established. But it's only through taking large risks that Tesla will continue to grow.

The growth narrative isn't over until Elon stops innovating, so I don't understand the desire from some investors for Tesla to sit back, make cheap cars, and rest on their laurels. If we're really focused on the long-term investment thesis, we should embrace the risky, reckless decisions.

It’s not a zero sum game. There is nothing to prevent Tesla from continuing to make smart choices as a car company while also pursuing robotaxi, AI, humanoid robots etc.

 

[willow_hiller]

It’s not a zero sum game. There is nothing to prevent Tesla from continuing to make smart choices as a car company while also pursuing robotaxi, AI, humanoid robots etc.

I think everything we've seen this year is Elon making smart choices and being cautious, for Elon. Big emphasis on the "for Elon," because as I stated above, he rarely takes half-measures. What most people perceive as betting the company on AI is "not quite" for him, as he clarified in early April:

https://twitter.com/x/status/1780376546148327690

 

[aubreymcfato]

Dumb question:
Tesla sold ~31000 cars in the Netherlands in 2019. As I understand, they were company cars: what's the life of a company car? Will they need to change them soon?

 

[ItsNotAboutTheMoney]

While I do believe the short action has kept TSLA subdued, I think the largest factor has been the growth story grinding to a halt, which much of the TSLA future valuation was tied to. In time things like Megapacks, autonomy, and Optimus will rekindle the growth story, and hopefully auto production begins ramping up again too, but until any of those happen TSLA will likely remain underwhelming.

Megapacks are in an extremely competitive market. The cells and pack are the fundamentals and Tesla doesn't have anything special that would ultimately give them both a large market and sustained high margin.

The big profit potential is in being the best in a large market that isn't yet commoditized, and there's still room for that in autonomy and robotics.
EDIT: What Megapacks, cell manufacturing (solve 4680) and cars can do is buy them time.

 

[DarkandStormy]

Practically the whole stock market has been booming recently and TSLA has not.

In my opinion it’s deliberately done for a reason and that is why you, maybe oddly, should be happy that it is being done.

-Tesla sales declining sequentially
-Net income declining
-No longer aiming to achieve 50% CAGR unit growth
-No longer publishing goal of 20m vehicles/year by 2030

None of these things have to do with shorts.

Clearly, Tesla has stated their long term prospects depend on FSD/Optimus/AI. Some people like that bet, some people don't.

 

[Dikkie Dik]

Dumb question:
Tesla sold ~31000 cars in the Netherlands in 2019. As I understand, they were company cars: what's the life of a company car? Will they need to change them soon?

Leases run four to five years, so yes, lots of cars to replace and a giant influx of cars on the second hand market.

December is going to be especially interesting because in that 2019 month alone Tesla delivered some 10K Model 3’s.

 

[cliff harris]

I would like to see Tesla take powerwalls more seriously. We hear a lot about megapacks, and sure, to a company obsessed with reducing bureaucracy, selling 100MW of megapacks is quicker and easier than selling 10,000 powerwalls, but its a huge market, and there are clearly enough customers to keep dozens of other companies afloat in this space.
I do think Tesla should cross-sell more. Anybody buying a vehicle from Tesla should be asked about if they had considered a powerwall installation, and told how seamless the integration of powerwall and Tesla vehicle is.
As someone with a model Y, but a 9.5kwh givenergy battery, who has to constantly juggle charge times to make the most of my solar, I am well aware of the appeal of an all-in-one solution. I don't see Tesla push it much though.

 

[nativewolf]

This is an EXTREMELY optimistic take on waymo. Their entire technical model is 100% flawed, because it relies on maps. Maps are outdated milliseconds after being generated, so worthless, but actually WORSE because they potentially give false data. Plus the cost of the sensor suite per car is prohibitive, and the cost of mapping is prohibitive.
Does waymo make a profit? no? then why scale at all? If they are a maps-based system, then they gain nothing from scale. More coverage means more mapping vehicles. There is no viable business model here whatsoever. Its lunacy to think they will soon have 50,000 robotaxis. I'm sure their 'investor deck' is very impressive, and that they employ talented sales people, but that does not make it a viable business.

If Tesla solves FSD, which is looking more likely than ever, then it will work in London, Lisbon, Rome, Beijing, you name it. I don't expect to see waymo making HD maps of my local town in south west England any time soon, but I wouldn't be surprised for FSD to handle it within 12 months,

Wow...so if a company does not make a profit in trial phase why scale it? So Uber..which took years and years and years to make first profit should have shut down to start with. Google...same thing, should never have pushed forward. Intel..no...stupid idea. Tesla..terrible idea. FSD by Tesla which is a money losing pig right now...yeah shut that down. SpaceX...shut it down.

I agree with you that Waymo is going to focus on the USA at first. I disagree on the mapping, the maps are constantly updated as the vehicles drive and Tesla may very well find themselves using maps. I'd be very careful about making blanket statements such as that.

The only lunacy I see is to assume that Waymo won't have 50k robotaxis. Its clear that's what they plan to launch. It's clear that they go from a to b to c to d, etc etc. They solved FSD first, is it geofenced, yes. However, today you can get in a waymo in phoenix and drive across town. Same thing in San Fran. Austin, LA, and somewhere else coming soon. They plan to offer RT in the top Uber cities in the USA and then see where it goes. I'm bookmarking this post because I'd like to return to it in 2 years and we'll see where things sit. FYI, you sound like the TeslaQ people that said EVs don't work and nobody wanted them and tesla was a scam.

 

[Doggydogworld]

Tesla sold ~31000 cars in the Netherlands in 2019. As I understand, they were company cars: what's the life of a company car? Will they need to change them soon?

No. These were "employee cars", not what we in the US think of as company cars. It's a fringe benefit/tax dodge. There was a big cliff on the tax dodge part at the end of 2019 and Tesla exploited it to the max.

For Left-Hand-Drive (LHD) Europe, I've lost track of which Model Ys come from China (if at all now) and which are Berlin-built.

Shanghai Y exports have dropped dramatically. 5.6k in April, down from 22.3k a year ago. Some of that is 'unrolling the wave', but three month numbers are also down. I figure the remaining Y exports are mostly going to Australia, South Korea, etc.

Europe is about to levy tariffs on Chinese-built cars, so it makes sense to provide more Ys from Berlin. I wonder if they have a similar plan for Model 3?

 

[Doggydogworld]

December is going to be especially interesting because in that 2019 month alone Tesla delivered some 10K Model 3’s.

They delivered them to third party leasing companies like LeasePlan. The cars made their way into end user hands over many months.

 

[growler23]

I would like to see Tesla take powerwalls more seriously. We hear a lot about megapacks, and sure, to a company obsessed with reducing bureaucracy, selling 100MW of megapacks is quicker and easier than selling 10,000 powerwalls, but its a huge market, and there are clearly enough customers to keep dozens of other companies afloat in this space.
I do think Tesla should cross-sell more. Anybody buying a vehicle from Tesla should be asked about if they had considered a powerwall installation, and told how seamless the integration of powerwall and Tesla vehicle is.
As someone with a model Y, but a 9.5kwh givenergy battery, who has to constantly juggle charge times to make the most of my solar, I am well aware of the appeal of an all-in-one solution. I don't see Tesla push it much though.

I have a Powerwall, and ironically, I have received multiple emails from Tesla to buy ... a Powerwall. They may have a boolean flipped somewhere in their logic!

 

[lukex4]

Remember it's the last day to enter in the contest for a factory tour!



Ends on June 7, 2024 at 11:59 p.m. CST!

 

[Ipcress]

You're right.

It was reckless to start a brand new American car company. It was reckless to only produce electric vehicles. It was reckless to push the boundaries of vision-only autonomy.

Elon's recklessness is a double-edged sword. He makes rash decisions that don't always pay off, but he also makes bold decisions that no other CEO would dare attempt. Elon's recklessness got Tesla to where it is today.

I understand how shareholders tolerate reckless behavior when a company is in start-up mode and dislike it when the company is more established. But it's only through taking large risks that Tesla will continue to grow.

The growth narrative isn't over until Elon stops innovating, so I don't understand the desire from some investors for Tesla to sit back, make cheap cars, and rest on their laurels. If we're really focused on the long-term investment thesis, we should embrace the risky, reckless decisions.

Making "cheap cars" will open up new, massive world-wide markets. Each car is an ambassador for the brand, and will rake in additional $ for FSD and other subscription services. Tesla can walk and chew gum at the same time.