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

[TradingInvest]

Related to the insurance launch: An old (2016) article (see the link below) that talks about the benefit highly autonomous (AV) cars have on insurance cost and claims.

Key points:

1) Advance AVs accident rate is expected to be 45% lower on highway and 30% lower on other roads.
2) other expense advantages are: underwriting using more data, actively promoting safer routes, claims processing and reduction of fraud (sentry mode and accident videos).
3) not in article but my points about Tesla: minimal acquisition cost, higher take rate for FSD feature, accurate claims cost using Tesla body shop (mobile ranger etc), and overall reduction in premium will improve car cost of ownership and hence sale. Also it will be easy to prove in court if the Tesla driver is not at fault.
4) some offsetting points could be that while accidents may be lesser, the mix will shift to bigger accidents than petty accidents (I disagree with this point but only time will tell).

https://www.the-digital-insurer.com...16/05/737-HERE_Swiss-Re_white-paper_final.pdf

PS: I don’t expect Tesla to generate lot of profit and revenue from insurance (compared to say car sales or robotaxi). I would put this idea more as promoting FSD take rate and making car ownership attractive.

My rough estimate is as following (in the long run):
Gross profit from selling a $50k Model 3 is $10k;
10 years insurance profit on this car $8k;
If used as robo-taxi, 10 years gross profit $300k.

 

[Fact Checking]

My rough estimate is as following (in the long run):
Gross profit from selling a $50k Model 3 is $10k;
10 years insurance profit on this car $8k;
If used as robo-taxi, 10 years gross profit $300k.

So if we are talking about 10+ years long term outlook: income will only be as high if Tesla's solution is going to become a de-facto monopoly, and they can price their taxi services to around the pricing of human driven taxi services.

Otherwise if there's competition then robotaxis will set the price of taxi services to below that of human taxi services, human taxi services will gradually die out and robotaxi services will conduct a usual race to the bottom, prices somewhere around the price of expected capital returns.

I.e. the very long run lower price target for a $50k capital investment will be ~5% of the capital, $2.5k/year, or $25k over 10 years.

But in the initial phase they will track taxi services pricing, and will generate 10x higher returns - especially if Tesla becomes the dominant leader in the segment, which they have every chance to achieve.

 

[lklundin]

Plan to place my order next month and now I have a referal code to use. Thanks! But one thing, if you win a roadster, you owe me a beer or two in a Munich Biergarten.

And great news about the tow hitch! Again, one great missed oportunity for Tesla on the demand site. Why not communicate this option openly so people know they can retrofit a tow hitch? SMH.

LOL!

My son and I was sent out to buy a shirt for him and I thought "let us pop by the Tesla store, I might as well place my order from there - before next week's expected FSD price hike". So getting home after having suddenly spent (or agreed to spend) 60k € I had quite a few impressions that I did manage to write in my first post on this.

The Model 3 tow bar option is not yet official, since there is no price on it nor any written info. I assumed my tow bar question would be kind of exotic, so it had a long build up (explaining exactly why I expected it to be offered "soon"), and the Tesla sales person actually said "Anhängerkupplung" before I did.
So I have to assume that the question is very common around here.

He didn't have any info on a coming Tesla insurance in Germany, but did recommend a cheap one specialized in BEVs,
emover24 – Versicherungen für Elektrofahrzeuge

I asked about delivery times for four color variants (blue/black w. black/white) of the LR AWD and was told that the delivery time was not influenced by this and something about the Teslas being on ships - which could just mean they had no knowledge regarding (coming) inventory in the store.

With ongoing test drives it was not clear to me how many employees were at the store while I was there, but the three people I saw were pretty busy helping out several interested parties and the sales person I spoke with was clearly not trying to spend extra time with me. I believe I was the only one to complete an order while I was there.

After he confirmed that anyone could walk in from the street and place an order with an initial payment of 2k €, I explained that I felt it was strange that I as a day one reservation holder would need to effectively pay 3k € to place my order. As such I argued that we should cancel my reservation on the spot, so I would effectively have to make an additional payment of only 1k€. He tried to argue that the reservation refund would take 3-4 weeks, by which time I would be paying the total amount anyway. I said that my refund of my Tesla Solar Panel earlier this year had taken only a few days (and that I cancelled after a year of having gotten no information regarding delivery time). We left it at that, with me somewhat uncertain whether this policy was due to a shortage on cash or just an inability to process these things together. But to learn more, I did cancel my reservation on the same day. So if Tesla goes insolvent before I take delivery of my Model 3, then my obstinacy was the straw that broke the camel's back.

Also, I said that as a foreigner I had my savings in another (Euro)-country, so I asked if I could transfer my payment to Tesla in that country. This was absolutely not possible (and no big deal for me, just curious).

Further, for my 2k € payment, they suggested I should make execute the transfer via their computers in the store. Without wanting to waste time explaining that I would never enter my personal banking credentials on a foreign computer, I just said I did not have the information with me. They mumbled something about payment within 7 days.

So it seems the Tesla sales staff have instructions to really try their best to get the 2k € initial payment done while customers are in the store. Fair enough.

Lastly, in spite of me asking for an email with a screenshot of my order confirmation page, the Tesla person was not able to take the screen shot (and entered my order confirmation code into a paper note book of his). He was trying to do a copy paste of the order confirmation page into a text processing document, which he couldn't get to work. I was not impressed by that. At that time the store was filling up, so I assume that my only copy of my order confirmation page is the super-low quality photo I took with my cell phone.

PS. Added the Tesla insurance recommended to me in Munich.

 

[Pras]

My rough estimate is as following (in the long run):
Gross profit from selling a $50k Model 3 is $10k;
10 years insurance profit on this car $8k;
If used as robo-taxi, 10 years gross profit $300k.

How did you come up with 10 year $8k per car? Any rough logic?

I see it as for $50k car insurance will be $150 a month ($1800/year), and the combined ratio will be 95% (best in industry). Say investment gains in 6%, they can profit 10%, which is only $180 a year for 10 years is $1800.

Also if the insurance take rate is only 20-40%, the per car equation is even lower. Am I missing something?

 

[T@oo]

He didn't have any info on a coming Tesla insurance in Germany, but did recommend a cheap one specialized in BEVs.

I would be interested in this companies name.

 

[lklundin]

"acre feet" - how quaint and archaic!

Yes.

More disappointingly, it is not stated how this volume translates into an actual supply of water. Surely, acquiring the water right does not mean you get to receive that volume of water once.

So per what unit of time does does this volume of water come? per day? per year?

PS. Is the rainwater that falls on GF1 collected and used, e.g. for flushing toilets?

 

[lklundin]

I would be interested in this companies name.

emover24 – Versicherungen für Elektrofahrzeuge

 

[TradingInvest]

So if we are talking about 10+ years long term outlook: income will only be as high if Tesla's solution is going to become a de-facto monopoly, and they can price their taxi services to around the pricing of human driven taxi services.

Otherwise if there's competition then robotaxis will set the price of taxi services to below that of human taxi services, human taxi services will gradually die out and robotaxi services will conduct a usual race to the bottom, prices somewhere around the price of expected capital returns.

I.e. the very long run lower price target for a $50k capital investment will be ~5% of the capital, $2.5k/year, or $25k over 10 years.

But in the initial phase they will track taxi services pricing, and will generate 10x higher returns - especially if Tesla becomes the dominant leader in the segment, which they have every chance to achieve.

If safe and convenient robo-taxi is achieved, I guess the adoption rate will be a reverse function of per mile fee. If the fee is $1 per mile, the demand probably can reach 2 trillion miles per year. If the fee is $0.4 per mile, demand could reach 6 trillion miles per year.

Tesla said their own cost will be less than $0.18 per mile (tire, electricity, depreciation, etc.) My calculation arrived at the same number. If only Tesla has large scale robo-taxi services, they can charge $1.2~1.5 for a long time.

If 4~5 companies all achieved FSD, in theory nobody will make much money on robo-taxi, in reality their own per mile cost will make a big difference.

A $100k robo-car that can last 300k miles will have an all-in per mile cost $0.46, the company has to charge above that number to break even. Meanwhile the company with $0.18 cost can happily charge 0.4 and take the whole market - $2.4T revenue and $1.32T gross profit.

The third scenario: other companies started FSD ride sharing, but Tesla Network somehow get delayed for a long time.

The true winner need to get both right: a large scale FSD network; per mile cost is very low. It may be a good idea for Tesla to quickly start a pilot taxi program in one city, initially supply safety drivers in the cars. They probably can gain a lot of insight by doing this, also can help to sell cars in that city.

Ultimately, the most important thing is to achieve safe low cost FSD. Tesla is missing the last piece, which is the hardest piece.

 

[Krugerrand]

But never used or abused socks.

That is correct, for such would be cruel and unusual punishment. Disappointing socks, reasonable pants, maligned underwear; all perfectly acceptable. Used or abused garments are just, well...saved for the likes of Wallstreet, the media, the Whitewalker King, etc...

 

[Singuy]

So about Tesla insurance.

Allstate provides a discount plus sustained discount using their drive wise system that monitors when you drive, how fast, and how many harsh braking events.

Tesla can monitor you in a whole new level. I wonder if they will change your rates on the fly for doing risky things like max acceleration events and how often you run red lights. Essentially the car pretty much knows everything about you.. even know if you are cheating on your spouse or not. So I don't really know how hardcore they are willing to go with this. Once underwriting is assessing risks of an individual, the sky is kind of the limit.

 

[TradingInvest]

How did you come up with 10 year $8k per car? Any rough logic?

I see it as for $50k car insurance will be $150 a month ($1800/year), and the combined ratio will be 95% (best in industry). Say investment gains in 6%, they can profit 10%, which is only $180 a year for 10 years is $1800.

Also if the insurance take rate is only 20-40%, the per car equation is even lower. Am I missing something?

Tesla's accident rate is 4~5 times lower than national average, this will continue to improve with new FSD HW and SW. They could charge way below other insurance companies and still have a combined ratio below 50%. I know this sounds strange, seems to me we are going to that direction. Also Tesla can easily tell who are the crazy drivers, if these few don't improve, they will see high premium or have to move to other companies.

 

[HG Wells]

Headline: Shortsville Times

Nature attacks electric car in attempt to get more CO2.
Massive Tree Crushes Hyundai Kona Electric, Occupants Not Hurt: Video

 

[Hock1]

I have a pinned tweet since Apr 7

S Padival on Twitter

Couple of people close to Musk follow me.. so hopefully, it has been brought to his attention.

I'm sorry I missed your April 7 tweet. I also, on a couple of occasions, have proposed a rights offering as a way of raising cash. IMO, it would have to be a non-renounceable offering in order cause a problem for the shorts. In such an offering, the rights would be distributed to the holders of 173M+/- shares on a predetermined date. With, say 35M shares short at the moment, 208M shares (in aggregate) are now held long. With a non-renounceable offering, I believe the shorted shares would have to be returned to the rightful owner, who is expecting to see those rights show up in his account on the distribution date. WRT forcing shorts to buy in, I have also proposed a spinoff of some part of Tesla (say, charging network, Tesla Network, or other) as a way to make this happen. Of course, this wouldn't raise any cash for Tesla, but I believe would cause serious problems for shorts. AIMO

 

[Aieukl378]

Huge short squeeze and min 10% rally if Elon announced he's quitting twitter...then on to 300s.

I'm 100 percent serious. Sorry but acting like a 15 yr. old on Twitter is only entertaining when your company is hugely successful and stock price isn't getting destroyed on a daily basis. Come to think of it it still isn't entertaining...unless you're also 15.

 

[Sancho]

Shiny new M3 goes into a parking lot I’m in yesterday. Owner gets out, people start asking questions. The guy is raving about handling, autopilot, superchargers, etc.

Last time I saw this kind of enthusiasm for a new car was when Lexus first came out. The first Lexus owner in the locker room raves about the car and gets everyone's attention. When the second owner starts raving, it’s harder to discount the first guy as a fanboy. By the time the third guy in the locker room has bought and is raving, the Lexus is a “hot car”.

If there was advertising stoking initial Lexus demand, I don’t remember it. I don’t recall knowing what the car looked like until I started seeing it in the parking lot.

Word of mouth from owners is everything in selling $40k products in large quantities. There’s no way to calculate “steady state demand” until almost every potential buyer knows at least three M3 owners. That will happen pretty fast, since it’s exponential, but that process is just getting started.

 

[Singuy]

I'm 100 percent serious. Sorry but acting like a 15 yr. old on Twitter is only entertaining when your company is hugely successful and stock price isn't getting destroyed on a daily basis. Come to think of it it still isn't entertaining...unless you're also 15.

There's some truth to this simplely because of all the restrictions he has over Twitter now. Him not violating the rules set forth does nothing for the stock. Him violating the rules only drops the stock. So there's really no upside for him being on Twitter since shorts will be applies every letter he now says on Twitter to the rules set forth. So now it's a game of just baiting him to violate in which the shorts are doing after EVERY tweet of his.

I am only talking about the stock price here. I still see value for him using Twitter as free advertisment for all his projects.

 

[Artful Dodger]

So we have talked alot over the past week about how NN-based computer vision will enable autonous driving.

Would any of our computer science experts share their opinion how Tesla can use their newly developed computer vision technology to aid manufacturing at GF3/Shanghai and for Model Y in a space/labor constrained environment?

Elon has hinted that manufacturing at GF3 would be 'more advanced', and 'best in the world'. Could this be robotic vision grafted onto automated assembly?

Does Tesla have the chops to integrate it's computer vision technology into existing manufacturing lines to replace labor while minimizing space? How big an 'ask' is this?

Elon dropped another hint during the Q1 conference call that the autonomous charging 'snake' is now possible with NN based computer vision. How big a jump is it from plugging in a charging cable to plugging in a wiring loom?

If possible, I think that would be a huge factor allowing the Model Y to be build at one of Tesla's existing facilities. Perhaps the new Tesla FSD computer will be in more demand than we initially thought?

Same hardware, different training. Train the NN with camera images, then it can drive a robotaxi. Train the NN with manufacturing process movies, then it can BUILD the robotaxis.

I bet computer vision based robots could relieve some production bottlenecks due to 'scare' labor on Panasonic battery cell lines at GF1 too. Jus' sayin'.

Cheers!

 

[⚡️ELECTROMAN⚡️]

I'm 100 percent serious. Sorry but acting like a 15 yr. old on Twitter is only entertaining when your company is hugely successful and stock price isn't getting destroyed on a daily basis. Come to think of it it still isn't entertaining...unless you're also 15.

He might have to vow to quit saying FSD is right around the corner, and that they will be profitable every quarter from here on out, also.

 

[gavine]

If Tesla Insurance proves successful, they will have bought another group of Tesla-haters....insurance company workers. Tesla already has plenty of haters bound to lose from the disruption:

- Fossil fuel industry workers
- Gas station owners
- Car dealers
- Auto mechanics
- Auto parts manufacturers, distributors and retailers
- Car tuners and aftermarket parts suppliers
- Dash cam manufactures
- Taxi services (future)
- Truck Drivers (future)

And next, insurance providers.

The disruption is great, but it invites a lot of haters who are bound to lose their livelihoods.

 

[Pras]

Tesla's accident rate is 4~5 times lower than national average, this will continue to improve with new FSD HW and SW. They could charge way below other insurance companies and still have a combined ratio below 50%. I know this sounds strange, seems to me we are going to that direction. Also Tesla can easily tell who are the crazy drivers, if these few don't improve, they will see high premium or have to move to other companies.

The lower average stats will be available for other insurance companies also, maybe less so, but they can match (reduce gap) that part in pricing the premium.