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

[Fact Checking]

Windows CE was released in 1996. Symbian 1998, and iOS was as late as was 2007

Before you laugh, I need to remind you at that time windows was still the King. And symbian was used in Nokia phones.

Neither Windows CE nor Symbian created a new market: they competed in the established phone market.

The iPhone and iOS created the new market of smartphones with touchscreens, and Apple has enjoyed the fruits of the resulting first mover advantage, all one trillion pieces of it.

The new market of smartphones was inaccessible to Windows CE and Symbian, and by the time Microsoft and Nokia released their own smartphones it was too late: Apple captured 90% of the smartphone market profits for the next 10+ years.

So in that sense Windows CE and Symbian are like ICE car makers: they are established players in a dying market Tesla is not competing in.

Tesla is dominating the newly created EV market, where the late coming ICE makers have trouble competing.

To go back to the original argument:

This is the key point - Tesla's superior business model. In terms of actual on-road performance Tesla is 9 years behind Waymo, but tech history teaches us that being first to develop a new capability doesn't matter. The better business model almost always wins.

Yes, it's the first product in a new high-tech market segment that gains the "first mover advantage", not the first technology.

This is why Microsoft won their PC monopolization war: they were businessmen first, technologists second.

This is why Apple eventually bested Microsoft: Steve Jobs was a product architect first, businessman second, technologist third.

This is why I think Tesla is going to prevail over the ICE industry, Elon is like Steve Jobs with empathy. "Product first" is written large in all companies of Elon, and a product by Elon always has to come with a top notch, first principles business plan.

I'm super excited about Tesla Insurance, not primarily because of the effects on Tesla's finances and SP (it will take years to take off), but because this is the first time since PayPal that Elon is launching a major high-tech financial product.

If the past is predictive, we might see something special - maybe not in the offering itself (which might look deceptively conservative, like a Model S), but under the hood.

 

[Lycanthrope]

That’s actually a parody account

Ah, I wondered why BabyCharts has suddenly unblocked me...

It's difficult to differentiate between the real TSLAQ accounts and the parody ones...

 

[cliffski]

I find it laughable that people would refer to waymo as in any way a competitor to tesla with a serious face. Sure, they have robotaxis now! and if you want to go from one point in downtown pheonix arizona to another point in downtown pheonix arizona, they can do that! oh yes!
But what (gasp) if you want to go somewhere else in pheonix? or (double gasp) somewhere outside pheonix! or (treble gasp!) somewhere in another state!

As a humble computer programmer who has worked on large projects, I can understand that coding a quick hack for a specific situation is an order of magnitude easier than a general solution that works in every circumstance. Waymo are doing the former, and shopping it around investors who are too dumb to know better, and selling a stock price as their product. Tesla is doing the latter, and actually selling a product as a product.

The moment you are geofencing, you put a hard limit on the scale of the system, and totally destroy any adaptability on a day to day basis. The waymo system is a *nice trick*, but it is not even in the same product category as what tesla are working on.

Personally I'm not *that* excited by driverless cars as an investment, but people who value waymo at > 1% of TSLA are just unaware of how things actually work.

 

[Lycanthrope]

The decision on where to build the Model Y may be made in a couple weeks. We are well aware of the labor situation affecting Panasonic right now, but there are other factors which may influence the site selection. So here's some insight into how water rights/availability in the GF1/Reno area may affect that decsion, written by a long-time Carson City, NV resident and GF1 "outsider" 'carsonight':

carsonight * 2 days ago

"I'm not trying to win an argument or put you down. I'm simply explaining how things work out here in the driest state in the nation.

"The industrial park has a certain quantity of water rights. Understand that water rights are bought and sold in acre feet. One acre foot is enough water to cover one acre to the depth of one foot, and is considered sufficient water for two residential dwellings or four apartments. The current price of an acre foot of water rights is something between $50k and $100k. This assumes that somebody has them and is willing to sell them. Before somebody can get a building permit they have to present proof that they have the water rights, even in town.

"The difference is that once that building permit is given the town takes responsibility for providing water, whereas those outside the city limits are subject to junior status as a holder of water rights. This means if there is a severe drought and the water table drops too far, they will be the first to not be allowed to pump water out of a well anymore. The industrial park has senior water rights, but if the drought is severe enough they too could lose their right to pump water.

"Both Reno and Sparks have acquired water rights by acquiring ranches peripheral to the city limits. The water rights came with those. There is very little in the way of additional farms or ranches to acquire. Reno tried to acquire water rights in the Honey Lake Valley in California, 60 miles north, but California put the kibosh on that. Las Vegas is trying to acquire water rights from northeastern Nevada, 400 miles away, something that is bitterly opposed there.

"You mentioned collecting water off of roofs. Understand that between April and September or October there is very little rain. Most precipitation falls in the winter and the snowpack in the mountains is very critical, because that determines if there will be water enough in the summer. Lake Tahoe has a dam that holds water to a certain elevation above its natural rim, which is determined by federal law. Reno has storage enough through Lake Tahoe and reservoirs for 3 years of no snowpack. I've seen droughts that lasted that long.

"Sparks would be the one to decide if they want to acquire property 10 miles east of the city limits to build residences there. That would mean that Sparks would have to extend full city services that far, and would not gain any water rights by so doing. Honestly I do not see that happening.

"Water rights here are critically important and most people in the know are conversant on them. I remember a few summers ago when the owner of a ranch in Carson City tried to sell 30 acre feet of water rights to Douglas County, the next county to the South. There was a storm of controversy! You would have thought Benedict Arnold had risen from the dead and walked again! The sale was rescinded."​

Cheers!

"acre feet" - how quaint and archaic!

 

[SPadival]

Done via tweet.

Marcus Maximus on Twitter

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.

 

[Artful Dodger]

"acre feet" - how quaint and archaic!

Indeed, especially when we need seven league boots right now. But I think the new S is already sporting 6 league boots.

Cheers!

 

[CorneliusXX]

I disagreed because I feel it’s no way to treat one of the top minds and greatest contributors to this century. Elon gets off on Twitter, it’s his reward. Take it from him and why should he bother? It has to be spontaneous.

Further, I’m tired of people failing to recognise the thousands of positive tweets versus two questionable. Let he who has never posted an error cast the next stone.

As Elon said: if you **** one horse

Elon Musk on Twitter

 

[SebastianR]

I'm super excited about Tesla Insurance, not primarily because of the effects on Tesla's finances and SP (it will take years to take off), but because this is the first time since PayPal that Elon is launching a major high-tech financial product.

If the past is predictive, we might see something special - maybe not in the offering itself (which might look deceptively conservative, like a Model S), but under the hood.

I like this piece of speculation. And I'm sure there is money/value in it. Think about it, if even a (traditional, conservative) Danish insurance company gives you a 5% discount on your car insurance if you have Autopilot (and they don't have access to the data), then a player that has access to the data will for sure be able to make a killing with it.

See the two prices with and without Autopilot here:
InsureMyTesla

 

[lklundin]

"Meet the rebel mechanic opening up his own Tesla repair shop"

I have seen that man work, I would never let him touch my Tesla.

But for a salvaged car I guess he could be OK.

 

[lklundin]

Wait what? Is this going to be an official Tesla tow bar?

Yes, both the Model 3 and the Model Y will have an optional tow bar.
For the Model 3 tow bar option it is unknown if this only applies from a certain build date.

There is a couple of reasonably reliable sources here:
Tesla Model 3 - Wikipedia

 

[Matias]

Here in China, FUD is at the peakest level ever. When I open my market newsfeed (in Chinese) in the morning, of the 30-50 news worldwide I got 6-10 negative Tesla pieces, that's 20-30% of all market news, just insane, most hit pieces on US media and SeekingAlpha got translated into Chinese and pushed to me.

But luckily nobody dare to publish anything against EV industry in general, since our communist government is so pro-EV and control all media very tightly.

That is probably mostly linked to the algorithm thinking you’re interested about that kind of news. Someone other, who isn’t interested about Tesla, would get different news feed.

Filter bubble - Wikipedia

 

[Pras]

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.

 

[HG Wells]

Any Pier 80 updates ?

Only one model 3 in inventory within 200 miles of Atlanta !

 

[TradingInvest]

Except that accessing the biggest and arguably most important market in the EU as a foreign (US....) marque, and EV at that - will greatly improve consumers acceptance if the factory is located there.

Think: to the general consumer a great EV by the Apple of EVs actually built in Germany to perceived German quality standards and by German workers will enjoy significantly better acceptance than the same great EV by the Apple of EVs built in the neighbouring low-cost production economies. There is a reason (in addition to the political one) that the Big 3 (BMW, Daimler, VW Group) still build the majority of their cars in Germany, instead of running for the low-cost countries.
Of course don’t look too closely to their supply base.....that has long spread all over the world.

Maybe from your US perspective: do you think Tesla would have done equally well if Fremont (or GF1) was located in Mexico?

Apple devices are produced in China, seems to be pretty successful.

 

[TheMrX]

Yes, both the Model 3 and the Model Y will have an optional tow bar.
For the Model 3 tow bar option it is unknown if this only applies from a certain build date.

There is a couple of reasonably reliable sources here:
Tesla Model 3 - Wikipedia

I see today my delivery have been delayed to may 17th, will try to push to have same paperwork than lklundin. Will let you know how that goes.

 

[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?

 

[[email protected]]

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.