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

[Matias]

Time to buy.

Again?!

 

[Drax7]

Let me state the obvious, Compelling products ( s,x,3,y, semi, roadster, pickup) and services (FSD), that disrupt the market, coupled with increasing revenues and profits, will improve that value of the company.

First step, meet q2 deliveries indicating production and demand are fine and improving.

If not, then it all gets delayed until it is .

Fear of missing out, FOMO, is less compelling until
They have a great quarter.

 

[Maitri982]

This stock price is absolutely totally and utterly insane. Compared to the market cap of uber / lyft... tesla stock is totally insane. The stock market is a heavy manipulated joke right now.

"the market can remain irrational longer than you can remain solvent"

 

[Wooloomooloo]

Tesla won’t be impacted by tariffs. As per Bloomberg, the Auto parts tariffs is still EXEMPTED!

Specifically on the Chinese side, or broadly? Because of course they're impacted broadly - they use steal don't they? They import raw materials.

 

[capster]

advertising is not about raising demand. it's about deterring FUD.

Huh?

Tesla is being peed upon from a great height. They’re not going to stop that by pissing back.

Maybe they should put on a raincoat, mainly they should keep hewing at the base of the tree that supports those doing the peeing.

 

[StarFoxisDown!]

*Where*?

Tesla took Model 3 reservations in a number of countries where they still aren't shipping anything at all. They're going to have to eventually ship to those countries, at least (which increases fixed costs, of course, but once you've taken reservations, you pretty much have to do it).

I do think getting to combined Model 3/Y sales of 1 million/year will require actually delivering to those countries.

So are you saying "US/Canada/Western Europe/China" demand would stop at 700K cars/year? Because if so, OK, you might be right.
But if you're saying "worldwide total demand", I certainly disagree.

I really can't understand the Model 3 demand worries, even here. To hear some people here realistically think that Model 3 demand is only 5-6k/week is mind boggling due to a simple fact...…….the SR has only just started production for US, isn't available for China and only recently opened orders in Europe. As you mentioned, lots of countries still haven't gotten a chance to start ordering yet. I don't know why people don't get that the SR is going to be the majority of the sales.....it was always going to be. The fact that Tesla has been selling 5k/week of Model 3 while mostly only selling variants that are 50k or above is amazing to me.

 

[Wooloomooloo]

This stock price is absolutely totally and utterly insane. Compared to the market cap of uber / lyft... tesla stock is totally insane. The stock market is a heavy manipulated joke right now.

Even the most optimistic Uber analysts and investors don't expect Uber to start making money until 2025 at the earliest. Further investment in Uber is really about sunk costs at this point. You have a company where practically none of the people who driver for them can afford to live on what they earn, a company that makes no money and has no plan to do so, a company that openly conducts hostile business practices in the marketplace, and one that is not exactly disrupting the existing market, as completely destroying it and replacing it with something unsustainable.

Uber is the diametric opposite to Tesla, and yet...

The market needs a kick up the ass - maybe a 30% correction will do the trick.

 

[Big Blue 1011]

I have been thinking how the day regulators, developers, and the public unanimously decide "FSD has been achieved". How is this suppose to work?

I am wondering how any company besides Tesla having any authority on the matter? When you only have 10 million or 15 million miles to show for, how can this data be used to determine safety and completion when Tesla can just give regulators 10-20 billion miles to look at?

I mean in the grand scheme of things, having 10 million miles of safety record compared to 20-30 billion is like me in my car with my hands off the wheel for 10 seconds and claim I have achieved autonomous driving because during those 10 seconds I had zero crashes.

And if regulators tell Waymo "I need at least 1-5 billion real world miles in order to tell us how safe your FSD really is"...how will they achieve that if it took them 10 years to hit 10 million miles?

My prediction: The first regulators to dip their toes in the pool will start with a controlled expansion of the Waymo style autonomous driving for all comers, including Tesla. That is, heavily mapped areas, backed by significant experiential data and accompanied by safety drivers. Dependent upon positive results, they will allow expansion of the area into less fully mapped routes, but still accompanied by safety drivers. Etc Etc. When they are ready for full driverless, they will go back to the fully mapped, limited geographic areas and slowly expand once again. IMO, it will take years before FSD is fully implemented.

Full disclosure: I have predicted the NY Giants will win the Super Bowl every year since 2000. I've been right 2 times out of 20. By that measure, anything less than 90% disagrees will be considered a successful post .

 

[Nocturnal]

Finally glad to see we are finally getting the MAGA we were promised.

Which industries would you have in mind? Asking for a friend in China.

Hamberders perhaps?

The problem is that they just wind up giving impacted industries welfare. That's what has been happening with the soybean farmers.

He was on Bill Maher recently...I just watched about 2 minutes of it which is all I could take...but he said the earth is not warming at all. That that's a fabrication. Unbelievable

So now the "science" of reading thermometers and comparing the readings to prior years is fake news. Not much you can do with a guy like that.

The worst part isn't that they disagree with the science (which is pretty much settled) but that they think it's some massive conspiracy. They are like anti-vaxxers.

Which industries would you have in mind? Asking for a friend in China.

Hamberders perhaps?

The problem is that they just wind up giving impacted industries welfare. That's what has been happening with the soybean farmers.

Even the most optimistic Uber analysts and investors don't expect Uber to start making money until 2025 at the earliest. Further investment in Uber is really about sunk costs at this point. You have a company where practically none of the people who driver for them can afford to live on what they earn, a company that makes no money and has no plan to do so, a company that openly conducts hostile business practices in the marketplace, and one that is not exactly disrupting the existing market, as completely destroying it and replacing it with something unsustainable.

Uber is the diametric opposite to Tesla, and yet...

The market needs a kick up the ass - maybe a 30% correction will do the trick.

Plus no moat/competitive advantage. Anybody can build a phone app tomorrow to compete with them.

 

[neroden]

If I remember correctly, Tesla planned for 500k model 3 per year expecting ASP $42k and targeting 25% GM when at full production. It seems to me that even if the plan has to be modified some, it can still be more than ok. Let's say it's 400k at ASP $45k, 20% GM. That seems pretty realistic to me. Does anyone have a huge problem with those numbers? That should allow nearly $1B in gross profit, even with an average cost of about $36k per model 3. I'd be ok with that.

Yeah, that's more or less where I am. The main problem here is Tesla simply hasn't managed to produce that many cars per year -- and won't until Shanghai starts producing.

 

[neroden]

I remember thinking the same thing. My role as a product designer/architect killed the purist in me.

Can we consider bugs for a minute? It is possible to create every conceivable test case, and wring out a product until it is bug free. By the time you finish, your company is out of business, or the underlying technology of your product is hopelessly obsolete.

While there are always better algorithms, here was mine: identify the product capabilities -> required technologies -> desire, where desire will cause a purchase. Get that product to market as quickly and cheaply as possible. Fix anything that will cause enough potential customers to reconsider purchase. Make the product cheap to fix or improve in the field.

With all this in mind, every minute fixing anything that only matters to .1% slows down the next feature that matters to most. Slowing down opens the door to your competitors. They might get the right product out, while you work on unimportant stuff. If so, you die.

Tesla gets this mostly right. Nobody can be perfect.

If Tesla had all the money, all the factories, a mature product, a mature market, these kinds of things could become make or break. At this point I think they are better off fixing bigger issues.

In my opinion, the top issues for Tesla, financially, are, in order:
(1) producing enough cars
(2) being able to deliver them efficiently
(3) having service available everywhere
(4) communicating properly with customers
(5) not infuriating customers with pathetic software

Of these, they seem to be working hard on #1-3 and they don't really use the software UI team at all. Meanwhile, #5 is the cheapest and easiest to fix. If the software team is all working on #4, fine, I'll give them a pass... no evidence of this though

 

[electracity]

One reason Tesla stopped pushing Fremont and turned their focus to Shanghai, IMHO, is so they could qualify additional Chinese parts vendors. They then plan to use those vendors to reduce parts cost back in Fremont. That won't pay off for a while, though.

Exactly. Long term a robust Chinese supply chain is critical. I expect that even in batteries a Chinese firm can best Panasonic's price FOB Sparks. Batteries are very suitable for containerized shipping. High value per pound and volume.

 

[neroden]

Just shows us how far we have to grow. from 2% to 100% exponentially. It will take time, but it is happening. Is this timeframe realistic?.
2013 - 0.5% EV
2019 - 2.0% EV (4X increase over previous six years)
2025 - 8.0% EV (4X increase over previous six years)
2031 - 16.0% EV (4X increase over previous six years)
2037 - 32.0% EV (4X increase over previous six years)
2043 - 64.0% EV (4X increase over previous six years)
2044 - 100% EV

Yes, that is realistic, though I certainly hope your timeline is too pessimistic. We can't afford such a slow timeline.
Based on other data, my rule of thumb is a 4X increase in 4 years, not 6. But this is hard to predict.

 

[EVNow]

And I also wonder psychologically if it has an effect on Chinese customers.
China is a very centralized country, and the government influences everything. If the Chinese government start to cast a bad light on US products, I wonder if it can affect the choice of Chinese to buy a Tesla

The fact is China & US need each other. Trump needs a deal and Xi needs growing economy.

 

[neroden]

Notice of Effectiveness

Looks like a notice of effectiveness was filed on Friday, regarding the file number under which some of the Maxwell tender offer documents have been filed under.

Not sure what this means in this context, but I feel like it's worth noting.

I don't know that much about tender offers, but I believe this is the SEC "approving" the filing. This may be a sign that they're about to close. MXWL is trading as if the deal closing is a sure thing, so maybe the pro merger arb traders are reading this as a closure.

 

[ezevphl]

Yes, that is realistic, though I certainly hope your timeline is too pessimistic. We can't afford such a slow timeline.
Based on other data, my rule of thumb is a 4X increase in 4 years, not 6. But this is hard to predict.

Considering how many places are banning regular cars by 2030, I think the timeframe is definitely pessimistic.

 

[neroden]

That assumes the market cap for Uber and Lyft is reasonable. Apparently wasn’t when they IPO’d, as both are down by approx 20% in a matter of weeks (Lyft) and days (Uber). A lot of people who purchased real estate b/w 2004-2007 believed they were getting a good deal based on the sale prices of similar properties. We all know how that turned out,

I’m not suggesting one way of the other whether TSLA stock is over or undervalued today, but my determination would not be made by comparing its value to either of those two companies.

I have to agree with this. Uber and Lyft are pure fantasy companies at the moment, more so Uber than Lyft... not reasonable comparison points for anything

 

[neroden]

OT (road tax)

The state of Minnesota can't even get license plates and tab renewals done correctly because of their botched computer upgrade that has been in the works for 10 years. Titles are taking months to receive in some cases and they are often incorrect. No thanks. We do not have an annual inspection and I would hate for them to use this as an excuse to add one. Dealt with that in Virginia for 10 years. We don't need more bureaucratic infrastructure.

Minnesota could contract the whole process out to NY, where it goes smooth as butter and has for years.

 

[KSilver2000]

We'll have to wait until Q2 numbers to see if Q1 was just a anomaly thanks to cell restrictions and the S/X motor refresh.

Three weeks since the update to the S/X and no one from what I read has gotten a VIN even. Sounds a little troubling towards trying to reach those guidance numbers if the old S/X weren’t doing well, no? I doubt cell restrictions are holding back making the new S/X.

 

[neroden]

Tesla never reaches it's targets. Best case will be 80 000 cars, but probably around 70 000.

Maybe one day they will learn to give realistic guidance.

I'm actually guessing 72000 (S+X+3)