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

[bdy0627]

38k is for robo taxi. For consumer version intenal cost, the price is off by 1.... in the ten thousand's place. (With some adjustment for 7k/wk rate)
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From the tear down :

I don't believe that's the current cost though. It has been pulled out of the financials. I thought it was somewhere between $35-38k. Could you, or anyone, show me from the actual financial numbers available what the cost of the SR+ appears to be?

 

[trentbridge]

Where Does the Car Dealer Make Money? | Edmunds

“So where does the majority of a dealership's profit come from? It's not from car sales, at least not directly. It's from the service and parts department, which accounts for 44 percent of the dealership's gross profits, according to NADA.”

I used to bring my gas car in for service about every 6 months.

Over two years in with my Tesla? Zero to date. I did have mobile service but that was to fix cosmetic issues after initial purchase.[/QUOTE]

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I believe Tesla could franchise repair shops/service centers in many states and foreign locations and allow those locations to buy and sell used Tesla vehicles..all new Tesla vehicles would be bought online but the service center would get a fee for prepping for delivery. This would generate working capital for the production side and remove the "services" segment from the accounting...this is the area where it appears Tesla is weakest...

 

[Krugerrand]

There are also many rational people willing to make logical choices but who are not on Twitter, YouTube, Facebook, etc.

That’s a willful choice, one way or another.

I’m not on Twitter; no account and yet I know what Elon Musk and Tesla and others related to those two are saying on Twitter.

I use FB minimally compared to most and yet I know what’s going on on that platform, know how it works etc...

Ignorance isn’t an excuse, it’s a choice.

They may well get their news from TV. But that doesn't necessarily mean they have a real block against Tesla.

I disagree. They kind of are against Tesla and all that it stands for. It might not be a direct link but for those who believe TV is the best/only place to get their news, they might as well be auditioning for the main character role in The Mule.

The important thing, imho, is that this population is very different than the current Tesla market yet is also attracted to the things that make Teslas great.

It seems some of you are thinking or even expecting that Tesla needs to sell cars to every demographic on the planet. While I’d love Tesla to do that for my own obvious personal gains (and the goal is to put electric in every single driveway/garage/front yard etc.), it’s not realistic especially if the human race plans on existing on this planet.

There’s so much more that has to be done in a very short space of time that a single Tesla just can’t conceivably do it all. It’s amazing how much they have done in the last ten years but good lord look what else has to happen!!!

Point being, Tesla has enough easier-to-reach potential customers to get cars to without having to spend money (better spent a million different ways) than in traditional manners like TV ads. Never mind the fact that the new generation doesn’t do TV like the current or previous generation. That whole industry is also transitioning.

Remember that a HUGE portion of Tesla sales are still in California. In many other places, it's hard to even see a Tesla in a parking lot.

There’s a lot of reasons for this, least of all not having traditional advertising.

 

[Maitri982]

Do both. Pitch it as a performance car to car aficionados. Pitch it as clean and green to people who fear the Keeling Curve and the enhanced greenhouse effect. There are probably other angles to attack, such as convenience, comfort, peace, economy. Different people, different priorities and concerns. If some help save our species unwittingly, I’m OK with that.

Many people buy cars just because of safety (e.g. Volvo). A simple ad: "Tesla broke the US governments crash testing machine so your family can be safe. Tesla...the safest cars on earth. Built right here in the USA. Good for your family. Good for the earth. Good for America."

 

[lascavarian]

Based on data from the IIHS, its occupants are safer in a crash than every other car ever tested [https://www.tesla.com/blog/...]. Think about that for a moment. This has nothing whatsoever to do with climate change, or whether one is left- or right-leaning.

Right here you lost me. EVs have to be better than ICE vehicles in basically every category to succeed quickly IMO. Culture has inertia and the nature of the change required demands that only overwhelming advantages can move the needle. Tesla does not have 50 years to wait for safety to become an overwhelming feature IMO. EM new from the beginning that the change that was necessary would have such requirements.

Andy Grove (of Intel) made the case that technology disruption required that disruptive products had to be 10x better to overcome the inertia of existing purchasing patterns (inertia).

I would make the case that going against overwhelming financial interests, cultural interests and political polarities was the very basis of the requirement that Teslas had to give a very high priority to many qualities like overall safety (and others).

I have mentioned the example of carbon monoxide poisoning which is a direct result of combustion when using a ICE vehicle as intended. Our cowboyish/Marlboro Man culture has diminished safety at almost every turn. EVs have to turn this cultural world view toward rational approaches like your vehicle not coming with an inherent risk of death through intended byproducts. If you can't turn opinion on such an easy lift, what hope is there for a heavy lift like altering the path of climate?

So the safety profile of the Tesla vehicles is a direct result of politics and the necessity of accelerated addressing of climate issues ...IMO.

I appreciate you thoughtful post and passion but I see it differently and I hope my perspective is understandable.

 

[Maitri982]

I'd like to add that I consider this a valid viewpoint: we cannot know whether it's possible up to the moment it's done.

There were a lot of doubters of SpaceX's "can rockets be landed safely and reused economically" thesis, and those were rocket scientists.

This is all interesting, but EM nor Tesla ever said this is what they want to do. They stated explicitly they want to compete with a service like uber/lyft.

 

[Silentk]

Ride the Lightning: Tesla Motors Unofficial Podcast: Episode 200: My Elon Musk Interview

(51 mins in) Elon: Ideally pickup truck will have a maximum starting price under $49,000 (or less).

Goal is to be "functionally better than an F150 and faster than a 911" is what I think he said!

 

[Maitri982]

I'd like to add that I consider this a valid viewpoint: we cannot know whether it's possible up to the moment it's done.

There were a lot of doubters of SpaceX's "can rockets be landed safely and reused economically" thesis, and those were rocket scientists.

Also note that historically Elon expressed more doubt about the ability to reuse rockets than about FSD. (!) So if you trust Elon's off the cuff remarks about future technologies I think that should count for something.

.

I really like your posts FC, but you know better than to engage in logical fallacies. Just because A=B it does not follow that C=D. In other words, the fact that he was indeed able to land rockets despite disbelievers has zero to do with FSD cars.

Also, the fact that he is displaying more hubris on FSD may be a inverse indicator. Neroden pointed this out and I had actually not thought about it until he did. The more boasting that Musk does the less likely what he is boasting about will occur. The more reserved he is the more likely it will happen.

Listen...I *want* FSD to work. i am just playing devils advocate here with some basic assumptions people are making because they have a great chip and bunches of data. I don't yet know if that is enough to get us what we want...whether with or without people in the car.

 

[SoGA Fan Club]

Folks, there are 47 superchargers under construction in the US and that number has been growing weekly. 47 is the most I have ever seen under construction at any time (been watching closely since there was only 13).

What company invests in infrastructure if it only has 10 months of cash left? I can only say that I am very confident of the future.

New record today - 48. Two new superchargers under construction were added, while one under construction went live.

 

[neroden]

That’s an micro-optimisation that saves maximum 100 gates or so. It saves a 3bit input to 4 bit output logic circuit. Compared to the massive amount of adders and multipliers, it’s a drop in the bucket.
We know very little about this chip. E.g. is it pipelined or not, and if it is, how many pipeline stages? This optimisation would only make sense if was critical to reach a certain clock speed, and the arithmetic functions are more likely(due to their complexity) to dictate the clock speed than the instruction decoder.

I'm not sure exactly what adder and multiplier designs they used, but I know they decided to use 8-bit data calculations, and there are some very fast designs. Wire speed is likely to be a major limitation.

They implied that they weren't pipelining within the NN core, or at least had very few pipeline stages. From one of the slides:

"Every Clock"
"Activation data is read into the formatter"
"Weight data is read"
"9216 multiply adds"

There might well be pipelining outside that core. But having no instruction decoder for the code operating on the NN core is probably worthwhile.

 

[neroden]

New record today - 48. Two new superchargers under construction were added, while one under construction went live.

Still waiting for North Dakota :-(

 

[neroden]

Wow that's an amazing offer.

If you drive a zillion miles a year. Otherwise, it's an offer which costs Tesla very little. I believe they now exclude taxi/Uber/Lyft use specifically (after some really heavy Supercharger abusers in the first couple of years.)

However, it seems to be a very *attractive* offer, so it'll probably move the inventory. Good business move.

 

[neroden]

Tesla CTO JB Straubel excercises ~$3 million in options as office presence called 'scarce' - Electrek

yikes I've always said I wouldn't worry too much about the exec departures/company culture as long as JB and Franz stick around but this is basically Tesla's longest employee. I'd guess he's spending more and more time on his own recycling startup.

would explain why he's been selling all those shares though I guess

if this isn't true though, and he's just been spending more time at Giga or Maxwell it highlights the incompetence of Tesla PR.

I will agree on the incompetence of Tesla PR.

I would *expect* Straubel to be focused on Maxwell and the Gigafactory, so what would he be doing in HQ?

 

[VValleyEV]

David Brook's recent book, Love Your Enemies: How Decent People Can Save America from the Culture of Contempt, is highly recommended here.

Terrific post. Small correction:

The book’s author is Arthur C. Brooks, not David Brooks.

I just purchased a copy. Reading the introduction snagged me, good general appeal independent of political orientation.

 

[tschmidty]

I'd like to add that I consider this a valid viewpoint: we cannot know whether it's possible up to the moment it's done.

There were a lot of doubters of SpaceX's "can rockets be landed safely and reused economically" thesis, and those were rocket scientists.

Also note that historically Elon expressed more doubt about the ability to reuse rockets than about FSD. (!) So if you trust Elon's off the cuff remarks about future technologies I think that should count for something.

Finally, if we are doubting whether a computer can drive a car safer than humans we should also consider how really, incredibly, stupidly bad drivers we humans are. We humans falsely believe that we can drive safely, and kill more than 1 million people a year trying ...

Even if the safety and regulatory bar is unfairly set much higher for an FSD car than for human drivers, isn't all that high.

So yes, I think this is another "computers won't be able to beat the chess world champion" kind of moment. They won't be able to, until they do, and then they leapfrog human chess players in ways that were hard to imagine originally.

Think about this: in two decades an FSD car will have enough processing power to file an insurance claim with estimated damages before the (at that point inevitable) crash actually happens. It might perform an online data exchange with all the other vehicles involved in the (inevitable) crash to change its behavior in the final 500-1000 milliseconds before the crash: which other car to crash into, which passengers/occupants are more vulnerable and should be protected more.



Sorry about my previous snarky reply, but I still think this is patently false if we consider safety an exercise in risk management.



Some people use taxis for leisure and convenience, but many people are using them due to urgency and the ability to arrive quickly point to point.



The point is that Tesla is free to make the business decision to require actual passengers to hold a driving license and act as a safety driver during a trip with passengers and possible valuable goods on board, at least in the initial phase. Just like AirBNB insists on the renting guest to hold a valid passport, credit card and requires them to sign a contract to be liable for damages at the host's home.

If the 'FSD car driving empty' experience is super safe to everyone but is simply inconvenient to its occupants - for example there's a nonzero percentage of trips that end in a 'remote driver' having to intervene, or a car having to park itself because it cannot continue, then it would be an entirely valid decision for Tesla to not carry passengers in that phase - even if it was 100% safe according to safety thresholds they (or regulators) are using.

I.e. as others here have remarked on it, my point is that the Tesla Network could be introduced as an automated car rental service initially. This already unlocks a healthy revenue stream, this market is ~28 billion dollars per year in the U.S. alone:

Car rental industry in the U.S. - revenue 2017 | Statistic​

If we assume that the U.S. is about 20% all car rentals then the global market should be beyond 100 billion dollars.

Tesla would likely be able to match traditional car rental pricing, expand the market, and generate higher margins, due to the automated fleet management and the much more convenient "the rented car can drive to you" aspect.

Eventually they would offer full taxi service as well - but my point is that the "FSD rental car" technological milestone is easier to reach and is a stepping stone to an automated taxi service and "you can sleep in your car while it's driving" FSD autonomy levels.

Also note that 'empty car FSD' unlocks a number of service improvements for Tesla themselves:

• A Tesla that has developed a fault that requires service inspection could drive itself to the service center while you are at work, could be repaired there and could drive back by the time you need the car.
• "Test drives" could be automated to a large degree: anyone who signs up to the Tesla Network as a user would be able to experience the car for a few hours with no pressure and a modest taxi fee. (Tesla could even incentivize the first few test drives of new Tesla Network users.)
• New car delivery could be automated, the empty car could drive to the home of the owner, who would take delivery or send it back.
• Various convenience features could be implemented: 'FSD car wash' and detailing, where the car would drive itself to the car wash facility on a Friday during work hours to get prepped for a weekend trip, etc.

All of these would come with incremental revenue stream or an improvement in the owner experience.

Another possibility for initial self driving.

Rental cars at airports.
Automated drop off and pick up.
Cars never exceed 35 mph to and from lots.

Same route every time.

As you arrive, GPS tracking on phone alerts lot to send car.
By the time you reach curb car has arrived. Phone is used as key for car. ETC

This exactly. If you could call your rental car from your phone as you are waiting for your bags and have it pick you up right outside the door! No more schlepping your bags across parking lots or waiting at counters. That would literally be a game changer right there. Since airports are (semi) controlled locations I imagine regulatory permission would be easier initially. Not to mention you now have a bunch of people driving Teslas.

 

[neroden]

Didn’t have any financial gain from calling this. So, not trying to say “I told you so.” But, quoting this to remind people what does and does not matter regarding TSLA. It’s very predictable but many optimists responded disagreeing.

Unlike with other established companies, for better or worse, there are simply only 2 numbers that will have a sustained effect: deliveries and profits.

I am not totally sure about that. I think cashflows will have an effect independent of profits. The China reservations translate to cashflow, so Wall Street may react when it shows up on the Q2 balance sheet which we'll see sometime in late July / early August.

FSD - doesn’t matter right now
Robotaxi - definitely not
China 3 - no. Someone here mentioned positive response from model 3 unveil and 100,000’s reservation numbers, but look at what happened to SP starting just a few weeks afterwards for the next 6 months. Nothing but down.

More or less agreed.

 

[neroden]

Profit, or cost of doing business in China? Myself, I wondered why it wouldn't be closer to $30K for Chinese. Why more there, or is it a new variant? Isn't Tesla making nearly all their parts, so couldn't be shipping 3rd party parts to China.

I do welcome a Tesla taking some profit (like what... 30-40% margins in China?), but history and mission tells me the long game is low as you can go. Not great for current stock prices, but Tesla is far from a "Niche" market as some bears suggested today.

If Tesla China is 100% US owned, does China get anything out of this (other than more choices in going EV and interest on a loan). What am I missing?

My father described it as "The Chinese government is annoyed at the slow rate of progress of their domestic EV manufacturers, and is giving them a large competitor to try to catch up with". I like his analysis. It fits with the government eliminating subsidies for short-range EVs and doing other things to try to force the domestic manufacturers to up their game.

 

[Fact Checking]

This is all interesting, but EM nor Tesla ever said this is what they want to do. They stated explicitly they want to compete with a service like uber/lyft.

Elon said he wants the AirBNB/Lyft/Uber model:

Elon Musk: "And - but then also have the ability for customers to offer their car and add or subtract their car to the fleet at will. It will be a company owned fleet - and the company-owned fleet with just be aware that aren't enough customer cars to be life out. So if we find like a particular metro, there aren't enough customers who are going to add their car to the shared fleet. And then, that's where we'll start rum them with a Tesla fleet. So that's why it's a certain combination of Uber, Lyft and Airbnb. And then we charge something probably comparable to, yeah, you have to say [Asterworks] [ph] or I don't know we tried 30% or something, in order for somebody to add the car to the fleet."
​

Car rental is similar to home rental in that sense.

I don't know whether they are planning to start it this way, or they want the full FSD taxi functionality straight away.

 

[neroden]

One strange thing is inventory for S is going up somewhat in U.S. 400->500->600(and I assume they sell some too). It seems these are not ravens, so where do they come from?

Maybe they are also clearing floor models?

They are definitely clearing floor models. They want floor models to be Ravens.

 

[neroden]

OT

1970s for the 8088.

Every Intel chip from their modern CPU series (and every AMD "Intel-compatible" chip) comes up emulating the original *8086*. It's interesting reading the boot-time code for Linux. There's a *hell* of a lot of cruft in that design...