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

[Usain]

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.

Sure, it's fine to run a technology business like Waymo at a loss. It's even fine to do so for many years while the technology is allowed to mature into something profitable.

Waymo's problem is that there just is no clear path to profitability. Waymo's hardware costs are too high and more importantly, Waymo's operational costs are too high.

Scaling will help with the hardware costs to a point. But Waymo's technology has to massively improve before it will address operational costs. Otherwise, more scaling will just lead to more losses.

That's why Waymo won't have 50k robotaxis any time soon.

 

[CitizenKane]

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.

Constant raising and lowering prices, firing people just to hire them back a short time later, picking fights with large groups of potential buyers by tweeting idiocies for no reason. Those are the things I am thinking about, not producing electric cars of which I have bought two... Please don't make your own interpretations of what I write.

 

[willow_hiller]

Please don't make your own interpretations of what I write.

How is anyone supposed to do anything else? I'm reading your words on a screen. My understanding of your words will always be my own interpretation of them.

And I don't think I'm taking what you said out of context. I'm reminding you that we don't get the innovative, risk-taking Elon without the foolheady, mistake-making Elon. They're the same person, and they always have been. You have to take the bad with the good.

 

[jerry33]

Constant raising and lowering prices, firing people just to hire them back a short time later, picking fights with large groups of potential buyers by tweeting idiocies for no reason. Those are the things I am thinking about, not producing electric cars of which I have bought two... Please don't make your own interpretations of what I write.

No different than other car manufacturers but the dealer network hides most of this. Tesla is transparent.

 

[DarkandStormy]

Head of Audit Comm. Denholm on the $500m related party transaction..."We moved out our purchase order to later in the year to line up with the data center build."

So this was a transaction, it included related parties, and we have no disclosure (other than this quote). Not sure disclosing this transaction on CNBC is SOX compliant.

 

[Linkmeup]

Surprised this hasn't been posted. I'm currently investigating the cost (and if its even possible as my installation is ready to be scheduled) and will report back what I hear:

SPAN® & Tesla® | Power meets intelligence

The ultimate solution for whole-home backup, 40% longer backup duration, and energy bill saving insights - SPAN & Tesla Powerwall 3

www.span.io

 

[GOVA]

Constant raising and lowering prices, firing people just to hire them back a short time later, picking fights with large groups of potential buyers by tweeting idiocies for no reason. Those are the things I am thinking about, not producing electric cars of which I have bought two... Please don't make your own interpretations of what I write.

You would not be a member of Swedish metal union by any chance?

 

[Doggydogworld]

Wait...your definition of "intervene" is "turn the wheel or slam the brakes in real time to prevent an accident" ?

Is there any reason to believe that is Elon or Tesla's meaning for the word? For your definition, I would think a much more specific term would be justified --- something like "safety-critical disengagement."

in·ter·vene
/ˌin(t)ərˈvēn/
verb
1. come between so as to prevent or alter a result or course of events.

I would assume that intervening for FSD would include all the little things like adjusting the scroll wheel to adjust the speed, tapping the accelerator to move away from a stop more quickly, etc. Those are common "interventions" that don't disengage FSD and aren't even usually safety related.

Spoiler: Notes/thoughts on FSD interventions and disengagements

I think over the last couple years, with probably (?) 20,000+ miles on FSD, I've only really had 1 or 2 time-critical disengagements that *might* have prevented an accident

Occasionally, I disengage when the road ahead looks to be full of odd-behaving human drivers or some other strange situation. I just don't know how FSD might react. So, I take over well in advance to proceed with extreme caution. That's probably diffiucult to quantify as any metric on FSD's actual performance or capability.

I also sometimes disengage when I don't like the route FSD is taking, and I want to force an alternate route. That isn't critical at all obviously...and is less frequent now that I can select (some) alternate routes in real time.

My most common FSD disengagement (on my particular driving route...I know other areas have different issues) is just adjusting the steering wheel to avoid potholes that FSD doesn't see. It disengages, but it's not safety critical...these aren't tire-popping/wheel cracking potholes. It's more of a comfort and "reduce the wear and tear on the tires and suspension" issue.

And, of course, I disengage at the end of my drives to manually navigate into a garage or through an entry gate or into a specific driveway and parking area.

To me "intervene" implies pre-emptive action. I have no idea how Elon defines it (but we know he's "aspirational", lol). CA is the only state I know of that requires any disengagement reporting (which Tesla ignores), but even CA leaves the definitions open to wildly varying interpretations.

Waymo Fleet Response does not take pre-emptive action. As the name suggests, they respond to requests from the fleet. This blog entry gives some examples -- FR answers questions about fire trucks blocking the road, directs another car on a blocked street to a (normally prohibited) private driveway, etc.

Few seem to appreciate the enormous gap between "drives great almost all the time" and removing the human driver. FSD can proceed when confidence level is only 95%. Heck, it doesn't even need to calculate a confidence level at all -- just let the human catch mistakes. To proceed into an intersection with an empty driver's seat you need a 99.999....% confidence level. And you need confidence in your confidence level, so to speak. You also need a fallback for times when confidence level doesn't meet the threshold. It's just an entirely different ball game.

 

[CitizenKane]

How is anyone supposed to do anything else? I'm reading your words on a screen. My understanding of your words will always be my own interpretation of them.

And I don't think I'm taking what you said out of context. I'm reminding you that we don't get the innovative, risk-taking Elon without the foolheady, mistake-making Elon. They're the same person, and they always have been. You have to take the bad with the good.

You can write your own opinions, no need to fabricate what others state. Why would I be invested in Tesla since 2015 if I thought building and selling EVs was reckless? And why would I have to take the bad with the good? Quite the contrary, I think more people - not least the board - should question Musk. Any idea that because he is a genius he cannot or should not be criticized is foolish.

 

[AudubonB]

Mid-summer* break from your favorite Moderator’s regularly-scheduled hiatus from 24h/d riding herd over y’allz -

If a CEO of any company for which I sat on the BoD ever said to the Board words analogous to:

We are starting to get to the point where, once known bugs are fixed, it will take over a year of driving to get even one intervention

He or she would be 37th floor defenestrated before he could stop for a water break.

I don’t care about “starting to get”; I care about getting.

I don’t even care about “getting to the point”; I care about being at the point.

I don’t care about “once known bugs are fixed”; I care about all bugs having been fixed.

For the umpteenth time on this thread, words matter. And those words demonstrate that we have just been told absolutely nothing at all.

Disgraceful.

*Last frost today! We hope. And I think I plowed snow for the final time this season last week.

 

[sunwarriors]

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.

The consumer solar/power market has never been that important to Tesla I think. My existence here was purely from solar/ESS and I planned to get a PW initially, but you can read the many install/support horror stories here and I decided to just go in another direction. I've said this before, but Tesla has no moat/advantage (all IMO) in consumer solar currently. Most people buy the PW because it's the cheapest solution generally (even though others aren't much more when I did my research). Support is really hit/miss. If your house/install doesn't fit in their box (metal roof, flat roof), the order will be cancelled, maybe after months. Tesla has also left a lot of markets about a year or year and a half back in the US.

Like you say, they COULD take it more seriously, but haven't for years probably due to other priorities. I've never heard of givenergy, but hear good things about Franklin and of course, I am biased with Enphase.

Maybe not being in the UK, it's easy to balance solar/EV charging for me. Just plug in when it's sunny here. Don't have to overthink it at all. Some of the circuit/energy management stuff can be already done with span/emporia and other solutions.

 

[sunwarriors]

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.

I don't think this should be how it's viewed and disagree you're invested because it's simply Elon. You still expect a return on your $$ at the end of your day. This isn't a charity. All those companies have plans to make a profit so how can profit not matter? SpaceX already turns a profit I've seen/read.

Like you state, Elon can raise endless amounts of $$ since he's Elon, but capital is so cheap currently with record stock market highs across the board and companies have no problem tossing a few billion around when everyone has so much of it. It's easy for MSFT to throw billions in AI to simply dominate that space. They literally invest in practically all the AI companies so they can't lose for how much $$/cash flow they generate every year.


The issue with Tesla, IMO is that it's none of those other companies you list. Tesla is valued more than ALL of them combined right now...even with the drop still. Tesla net margins have dropped to 5.5% last quarter, I've seen estimates that it should tick back up to around 9-10% or so this quarter. Tesla was more highly valued than comparable companies because they had very solid growth, MASSIVE gross margins compared to anyone else, and those low net margins (5.5%) are legacy OEM car maker territory and why the stock is down so much (no, it's not just stock market manipulators/FUD). If you want that, look at GME or DJT.

If people expect Tesla to rocket much higher, they need a lot more margins/profits. NVDA's PE has actually dropped recently even with the crazy stock gains due to greatly increased profits/earnings. This is why the stock has been constantly going up. There' s a limit of course and will be some eventual pullbacks, but people are still piling in since the growth/profits has been accelerating.

Right now, there is just near 0 growth or even YoY drops for Tesla. Everything so far relies on great profits on FSD/RT. If those fail, the stock would obviously tank more and that's what you, a lot of folks are banking on now. It's a wait and see if Elon will make it happen and the massive profits that AI/RT/FSD/Optimus is promised to deliver. People are doubtful because it's a every year thing for him to state we are close and that we can have our cars drive us from LA to NY while we sleep in the back.

 

[Zaddy Daddy]

Just a helpful thought for all people who are completely fed up with the TSLA price movement now and in the past years.
We have all seen it coming down from around the USD 400 price tag.
Practically the whole stock market has been booming recently and TSLA has not.
The shorting of TSLA, as described quite clearly by @Papafox is one of the big, if not biggest, factors that is holding down its price.

I sincerely hope most investors here don't believe shorting is what is holding down TSLA stock price.

1. % short interest in Tesla is like 3-4%, that's nothing. TSLA is not being shorted 30-40% like some stocks, or how it was in the past.

2. People keep pointing out the market is booming but TSLA is not, therefore TSLA is manipulated. Incorrect. Why is the market booming? Because of a handful of megacap stocks are booming. Why are they booming? Because they keeping make more and more insane amounts of money.

3. Tesla at ATH was valued as if not only the high margins were going to continue, but that they would continue with high volume growth. Basically TSLA at $400 was assuming 20% operating margins on 5 million vehicles was going to happen.

4. Tesla is making less amounts of money.

5. "Executing well" does not match with stock valuation. Just because the company is doing well does not mean it deserves whatever arbitrary value you think it should, just because it was valued that highly in the past. TSLA is still a $500 billion company, which is very very high given how much money it makes.

 

[EVMeister]

regularly-scheduled hiatus from 24h/d riding

Well that didn't sound right in my head.

 

[uscbucsfan]

I think it's clear that the market values massive growth and margins over things like FSD and Robots (not saying there's no value in that). AI announcements show a bump, but the big jumps are new cars, margins, massive growth. Until we get back to seeing a ton of new products sold (could be RT, Bots, or even FSD...not megapacks) we will have peaks and valleys all well below ATH.

If you are a long term investor, you believe this stuff is coming. If you don't @DarkandStormy...get out. It's really that easy.

FSD getting a L3 or even L4 label isn't going to do it. 2 million RTs would. A bunch of bots absolutely would.

I don't think the margins will ever be what they were.

 

[Tony73]

I'd say the chances are between 0-0.1%. None being tested on the road, no supplier or employee leaks, nothing of substance on the internet.

It would be cool, but Tesla has never been able to dodge leaks. I'd love to be incorrect here.

Maybe a reveal or road test in July. I could see that.

Tesla is actually pretty good at keeping things locked down. Far better than most car companies. The model 3, model Y and cybertruck were all unseen before reveal.

 

[Zaddy Daddy]

Mid-summer* break from your favorite Moderator’s regularly-scheduled hiatus from 24h/d riding herd over y’allz -

If a CEO of any company for which I sat on the BoD ever said to the Board words analogous to:

We are starting to get to the point where, once known bugs are fixed, it will take over a year of driving to get even one intervention

He or she would be 37th floor defenestrated before he could stop for a water break.

I don’t care about “starting to get”; I care about getting.

I don’t even care about “getting to the point”; I care about being at the point.

I don’t care about “once known bugs are fixed”; I care about all bugs having been fixed.

For the umpteenth time on this thread, words matter. And those words demonstrate that we have just been told absolutely nothing at all.

Disgraceful.

*Last frost today! We hope. And I think I plowed snow for the final time this season last week.

Exactly. I'm glad this is coming for someone venerable like yourself. In line what I posted the other day.

It saddens me that TSLA investors cannot detect the level of exaggeration in the CEO's tweets.

Your quoted text has nothing to do with what I am talking about - which is the wording Elon uses is loose.

"We are starting to get to the point where, once known bugs are fixed, it will take over a year of driving to get even one intervention."

"We are starting to get to" - this is entirely vague. How close to the point is "starting to get to"? It's not at the point. He's not saying V12.6 is at 1 disengagement per year, it is somewhere less performant than that. We are left to speculate on how much less.

"once known bugs are fixed" - this is not C code. You can't just go in edit some lines of code and remove this. He is making it seem like these are "easy" to fix, which is speculative. They haven't actually fixed them yet. And "fixing" them means retraining with an updated data set that hopefully removes these errors.

So these errors are still real driving errors, but I imagine ones they are more confident can be fixed by updated the curated data fed in for training.

So Musk sees some report from Ashok that miles per intervention on V12.6 is at say 1,000 MPI. Ashok shows him that 80% of the interventions are ones that they hope they can fixed with better training data. Musk calculates that means they are at 5,000 MPI without these "easy" issues, then estimates they are "close to" the 10,000 MPI mark barrier that is close to the one a year rate for most drivers.

Note, mean and median are different from miles driven per year because of skewed distribution. Musk knows this and I doubt uses the mean when he estimates. Median is closer to 10,000 miles per year.

My point isn't these exact numbers are correct, but we have to put this sort of thought into it because the statements given are purposefully vague.

First step is to admit they are vague.

 

[uscbucsfan]

Tesla is actually pretty good at keeping things locked down. Far better than most car companies. The model 3, model Y and cybertruck were all unseen before reveal.

Outside the MY, they reveal years before cars come out. That's a terrible example. But we always get leaks from employees of anything that is soon to be in production. As I stated before, we saw the Highland M3 almost a year before it was released in China because they have to test the cars. That's why it's unlikely they are going to start shipping a new MY in July, when there haven't been any spotted.

 

[Tony73]

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 on the other hand would perfectly fine with Tesla getting out of the power wall business. Same with solar

 

[ToTheStars]

I sincerely hope most investors here don't believe shorting is what is holding down TSLA stock price.

1. % short interest in Tesla is like 3-4%, that's nothing. TSLA is not being shorted 30-40% like some stocks, or how it was in the past.

2. People keep pointing out the market is booming but TSLA is not, therefore TSLA is manipulated. Incorrect. Why is the market booming? Because of a handful of megacap stocks are booming. Why are they booming? Because they keeping make more and more insane amounts of money.

3. Tesla at ATH was valued as if not only the high margins were going to continue, but that they would continue with high volume growth. Basically TSLA at $400 was assuming 20% operating margins on 5 million vehicles was going to happen.

4. Tesla is making less amounts of money.

5. "Executing well" does not match with stock valuation. Just because the company is doing well does not mean it deserves whatever arbitrary value you think it should, just because it was valued that highly in the past. TSLA is still a $500 billion company, which is very very high given how much money it makes.

I completely agree with you at present time. However, the market is forward looking. So I don't really care about what the company is earning now, I do care about what they are earning the next years and even decade.
Are you familiar with the idea of Wayne Gretzky? "Skate to where the puck is going, not where it has been"