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

[PeterJA]

I know that an autonomous electric vehicle taxi is going to be far cheaper to operate than an ice one, but it feels like the defining success of the future of the automotive industry is going to be autonomy rather that electric.

I agree.

My question was to say, what are the facts that show Tesla is ahead of the game on self driving.

@FrankSG ’s Investment Thesis contains a pretty good summary (scroll down to the Autonomy section):
My Tesla Investment Thesis: Why Tesla is the most exciting thing going on in the world today

Briefly:

1) Tesla's autonomy-training fleet is orders of magnitude larger than any competitor's, and is growing exponentially. Competitors must pay for every (expensive, lidar-based) vehicle they add to their training fleets, while Tesla's customers are paying Tesla to grow Tesla's training fleet.

2) Tesla's vision-based approach to self-driving is usable worldwide, while competitors are restricted to geo-fenced areas (such as Phoenix, AZ) that they have mapped with high precision. Tesla cars are learning roads in general, not just following high-precision maps.

3) Tesla’s vastly larger fleet on roads worldwide is learning how to handle rare situations (“corner cases”) that competitors cannot encounter without driving many more miles and environments.

4) Tesla’s self-driving supercomputer is dramatically better than the competition, according to ARK Invest’s analyst who studied Nvidia. And Tesla is already designing their next-generation chip.

5) Tesla is attracting geniuses to design their hardware and software. Several surveys list Tesla and SpaceX as the most desirable employers for engineers, and Tesla is hiring only 1% of job applicants.

6) Tesla’s fleet can self-drive (in shadow mode) more miles in one day than competitors can do in years, which will allow Tesla to be first to convince regulators of their system safety.

7) Tesla plans to have a customer-owned fleet of at least one million autonomous-capable cars when they switch on full autonomy with a software update. This will allow Tesla to offer robotaxi service in many areas before competitors.

Have I missed anything?

It wouldn't be ideal but if mass produced autonomous taxis would at least help keep any company afloat while they figured out how to convert their second gen taxis to EVs.

This idea and many others are discussed in a new book by Julian Cox, whom some folks may remember from Seeking Alpha battles and a Cleantechnica lecture:

Julian argues that the only way automajors might survive the transition to EVs is on profits from their own robotaxis… because autonomy will rapidly destroy their old business of selling non-autonomous ICE cars. Those cars will mostly become worthless except for scrap almost overnight.

These ideas have huge implications for the world economy, politics, and Tesla. Julian’s book is highly technical, but full of deep and wide thinking. For example, in chapter 20 he argues that automajors (unlike Tesla) initially cannot sell fully autonomous cars to the public, but can only use them for their own robotaxi fleets. The logic is compelling.

‎Future History of Energy and Transportation

 

[NicoV]

With the latest Dutch data available, it seems like NL/Spain/Norway is close to the record deliveries of last quarter: EV registration statistics for The Netherlands, Norway and Spain

 

[neroden]

Have I missed anything?

OK, I'll give you a counter-argument. "Autonomous cars" are basically a service business. And Tesla is really, really poor at providing consistent service communications.

(That said, I still don't think any of the other companies are anywhere.)

 

[PeterJA]

OK, I'll give you a counter-argument. "Autonomous cars" are basically a service business. And Tesla is really, really poor at providing consistent service communications.

I agree your service experience sounds godawful, but it is not universal (according to others here) and is clearly a growing-pain, not intrinsic to Tesla. The "service communication" in Tesla Network will be mostly automated, like it is in Uber and Lyft.

 

[FrankSG]

This is really good, actually. This guy did his homework. Journalists, take note -- this would be a good place to start in understanding Tesla.

P.S. The only thing he's missing is an explanation of the basic way an economies of scale business works. That is, high fixed costs, profit on each car sold, but need to deliver more cars in order to cover fixed costs. He may have thought this was too obvious to explain, but I've discovered that highly paid "business reporters" and "financial analysts" don't understand it.

Thank you for that amazing compliment! I'm glad that all the work I put into it is being appreciated by the community.

I appreciate the feedback. I touch on this a little bit in the Risks -> Profits section, and compare Tesla to Amazon from 5-10 years ago a few times in the post, but I indeed did not go in depth about this. Maybe something for a future post.

 

[EVNow]

With the latest Dutch data available, it seems like NL/Spain/Norway is close to the record deliveries of last quarter: EV registration statistics for The Netherlands, Norway and Spain

Total of 9,644 vs 10,434 last quarter (8% down).

If we have the same kind of result in rest of Europe we are looking at ~21k.

 

[FrankSG]

If you enjoyed reading that thesis, I'm just pointing out that the author is also on TMC ( @FrankSG ).
My Tesla Investment Thesis

He deserves our support.

Thanks! I appreciate the shout-out!

 

[Webeevdrivers]

Some partially Tesla related info. Some of the local facebook groups have accounts of what we found out when we put down our deposit on an Eplus Leaf SL last month. All the allotted 2019 Eplus Leafs have been sold or assigned in this province. Now anybody wanting one is being told 10 months as even most of the 2020’s allotted to the province have been pre-sold. (We have to wait till Feb for ours). The Kona customers are getting similar responses but shorter waits and there are still a few on Vancouver lots. But the Tesla angle is that many in the discussions are just saying screw it and are ordering Tesla’s which they can get in a month to 6 weeks. Tesla is still the only mass manufacturer of EV’s and its starting to show in a big way.

Right now about 8 percent of all new auto sales in B.C. are Electric. Just conjecture on my part but for the rest of the year I bet 90 percent will be Tesla’s. I think within a couple years our poor Leafie will be surrounded by a sea of model 3’s. We’ll be the poor cousins. .

Seriously though. Compared to a year ago there are a BUNCH of model 3’s driving around our little town. Kinda cool. .

 

[PeterJA]

I'm glad that all the work I put into it is being appreciated by the community.

Your essay is very appreciated by this community member. I sent it to relatives vulnerable to media disinformation. Terrific job, Frank.

Ideas for future additions/updates:

1) The potential of a Tesla App Store.

2) Synergy with SpaceX engineering and services (Starlink satellite internet).

SpaceX helps Tesla with materials engineering
(SpaceX and Tesla cooperate on advanced materials – NextBigFuture.com)
and maybe design (such as cold-gas thrusters in the next Roadster).
Musk: Roadster to go 0-60 in 2.1 seconds "before thruster option"

11-minute video about potential App Store and Starlink:

 

[JusRelax]

So apparently my credit union has implemented Tesla-specific auto loans, which have a higher rate than normal auto loans:

I believe this is because they've received an unusually high amount of loan requests for Tesla vehicles, and they know they can charge increased rates for Tesla loans than normal vehicle loans. #nodemandmybehind

 

[brantse]

So apparently my credit union has implemented Tesla-specific auto loans, which have a higher rate than normal auto loans:

View attachment 424981

I believe this is because they've received an unusually high amount of loan requests for Tesla vehicles, and they know they can charge increased rates for Tesla loans than normal vehicle loans. #nodemandmybehind

Are you sure they are charging a higher interest rate, or a discounted rate. Alliant Credit Union has historically offered discounted rates on Tesla loans, I'm sure as they've found most Tesla purchasers to be lower risk than the average.

 

[mrdoubleb]

Total of 9,644 vs 10,434 last quarter (8% down).

If we have the same kind of result in rest of Europe we are looking at ~21k.

Except the Netherlands did a crazy record and both Norway and Spain were down more than 8% from Q1. So the question is, whether the Dutch numbers are the outlier or Norway and Spain are.

 

[LJS22]

What’s with all the Sunday Tesla articles telling us that delivery numbers are unimportant for reasons ranging from profit matters to Tesla should be more like BMW? It’s like they want everyone to ignore the numbers Tesla is about to post. I have no idea why they’d want that. Odd journalism

It doesn't matter whether Tesla delivers 90,000 cars or 900,000 in the 2nd quarter — what's more important is whether Tesla goes mass-market or stays luxury

“Before you conclude that I'm about to insist that BMW is in trouble, don't. BMW isn't in trouble. But BMW serves as a useful guide to what kind of car maker Tesla should be.” Lol

 

[Christine69420]

Except the Netherlands did a crazy record and both Norway and Spain were down more than 8% from Q1. So the question is, whether the Dutch numbers are the outlier or Norway and Spain are.

March was an unusual month in Norway where years of TM3 orders were delivered. I don't think anyone expect the Tesla wave to run that high every quarter.

So far today 4 new Teslas registered today - 1 x TMS and 3 x TM3. So 3732 Teslas registered this month compared to 5828 in March. Still pretty good numbers. But quite wavy with 1017 last month.

 

[MABMAB]

Is there a better place to share?

LOVE THE 2nd PIC, priceless, could do an ad just with it.

Imgur

 

[mrmage]

OK, I'll give you a counter-argument. "Autonomous cars" are basically a service business. And Tesla is really, really poor at providing consistent service communications.

(That said, I still don't think any of the other companies are anywhere.)

The counter-counter-argument is the Tesla supercharger network, which is a good service.

Tesla knows how to create a top service business when they make it their priority.

 

[Green Pete]

I agree.



@FrankSG ’s Investment Thesis contains a pretty good summary (scroll down to the Autonomy section):
My Tesla Investment Thesis: Why Tesla is the most exciting thing going on in the world today

Briefly:

1) Tesla's autonomy-training fleet is orders of magnitude larger than any competitor's, and is growing exponentially. Competitors must pay for every (expensive, lidar-based) vehicle they add to their training fleets, while Tesla's customers are paying Tesla to grow Tesla's training fleet.

2) Tesla's vision-based approach to self-driving is usable worldwide, while competitors are restricted to geo-fenced areas (such as Phoenix, AZ) that they have mapped with high precision. Tesla cars are learning roads in general, not just following high-precision maps.

3) Tesla’s vastly larger fleet on roads worldwide is learning how to handle rare situations (“corner cases”) that competitors cannot encounter without driving many more miles and environments.

4) Tesla’s self-driving supercomputer is dramatically better than the competition, according to ARK Invest’s analyst who studied Nvidia. And Tesla is already designing their next-generation chip.

5) Tesla is attracting geniuses to design their hardware and software. Several surveys list Tesla and SpaceX as the most desirable employers for engineers, and Tesla is hiring only 1% of job applicants.

6) Tesla’s fleet can self-drive (in shadow mode) more miles in one day than competitors can do in years, which will allow Tesla to be first to convince regulators of their system safety.

7) Tesla plans to have a customer-owned fleet of at least one million autonomous-capable cars when they switch on full autonomy with a software update. This will allow Tesla to offer robotaxi service in many areas before competitors.

Have I missed anything?



This idea and many others are discussed in a new book by Julian Cox, whom some folks may remember from Seeking Alpha battles and a Cleantechnica lecture:

Julian argues that the only way automajors might survive the transition to EVs is on profits from their own robotaxis… because autonomy will rapidly destroy their old business of selling non-autonomous ICE cars. Those cars will mostly become worthless except for scrap almost overnight.

These ideas have huge implications for the world economy, politics, and Tesla. Julian’s book is highly technical, but full of deep and wide thinking. For example, in chapter 20 he argues that automajors (unlike Tesla) initially cannot sell fully autonomous cars to the public, but can only use them for their own robotaxi fleets. The logic is compelling.

‎Future History of Energy and Transportation

I really like this forum, but I wish there were more posts like this. Thank you very much for the effort you put into this.

 

[mongo]

OK, I'll give you a counter-argument. "Autonomous cars" are basically a service business. And Tesla is really, really poor at providing consistent service communications.

(That said, I still don't think any of the other companies are anywhere.)

Yes, but a service business that is majority software based with no human interaction (untill someone messes up your car, but they can outsource that).

 

[⚡️ELECTROMAN⚡️]

Is there a better place to share?

LOVE THE 2nd PIC, priceless, could do an ad just with it.

Imgur

I like the thumbs up.

 

[Fact Checking]

New What’s with all the Sunday Tesla articles telling us that delivery numbers are unimportant for reasons ranging from profit matters to Tesla should be more like BMW? It’s like they want everyone to ignore the numbers Tesla is about to post. I have no idea why they’d want that. Odd journalism

Everyone including the most deluded TSLAQ cult member expects Q2 deliveries to be much better than Q1 deliveries, so what we are seeing is attempts at "preemptive positive news nullification."

For the entirety of the last quarter they were running the gloom-and-doom thesis non-stop: that the Q1 drop is permanent, that Tesla is over, no growth whatsoever, that nobody wants to buy America's most satisfying car anymore now that it's even more affordable and is available to a 3x larger sedan market globally.

Now that Q2 delivery numbers are very likely going to falsify that false narrative rather forcefully, they are going to pivot to one of these:

• "Tesla might be delivering a lot of cars, but there's no profit in it!"
  
• "Q3'18, Q4'19 and Q2'19 were as good of a quarter as it gets, they are all outliers!"
• "Tesla is structurally unprofitable, they are never going to have three profitable quarters in a row!"

In other words, Tesla shorts and bears are going to do what they've been doing for the last 10 years:

Eventually investors might see through these self-serving lies, until then it's going to be ... volatile.