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

[RoadsterPlease]

low volume open today, I promised myself not to worry about the weekly fluctuations in the stock price this summer. If the price should drop below 220 before the Earnings call I'll buy more, until then I'll just try to relax and hope people understand the vision.

 

[Chocochip]

BTW., I suspect an interesting topic for the "Battery Investor Day" will be whether Tesla is going to keep the cylindrical form factor or might switch to prismatic cells - which are cheaper/faster to manufacture and have higher volumetric density.

I think the default assumption should be that they are going to stay with the 21,700 format, but the probability that they might use something else is higher than 0% - because if Tesla starts making their own cells the industry standard compatibility and outside supplier arguments become much less important, and the overall complexity and cost of raw materials to battery modules, with the physical properties of the final product, becomes the key parameter.

The cylindrical cells Tesla uses are not about industry standard compatibility. 2170 is, indeed, an industry standard, but used at a much smaller scale (before Tesla started producing them) than the 18650 standard. In effect, 2170 can be considered as Tesla's proprietary format. They are clearly producing the highest volume of 2170 cells in the world.

This format is more about:
1. Effective cell cooling. A cylindrical cell has a much higher surface-to-volume ratio compared to a prismatic cell, is typically much smaller than a prismatic cell, meaning the total cell surface available for cooling is higher, enabling the modules to be cooled more effectively for high-C charge or discharge cycles.
2. Failsafe design for the module and pack. I don't remember the exact numbers, but basically the Model 3 battery pack has by far the largest number of parallel connections (96, I think?), meaning that a very significant number of cells must fail before the pack becomes unusable (distributed risk). Contrast that with the Bolt or the i3 which have cells mostly connected in series. I believe Sean Mitchell had a video following a presentation given by Sandy Munro that he attended, where he discussed a comparison of the different battery pack architectures.

Edit: as correctly pointed out by @ggr cylinders have a smaller S/V ratio compared to prisms; I got it completely backwards, to my great embarrassment. Let's not talk about this or bring it up in the future, OK?

 

[Krugerrand]

To be honest, I think an electric cyberpunk pickup is going to be a bridge too far for many potential customers. Right now, an "amazing" pickup feature is a tailgate with a fold-out step .
Another huge factor is going to be the date that Rivian trucks are available. If availability dates and costs of the Tesla and Rivian pickups are comparable, I think Rivian, with a more traditional appearance, wins.

You’re just thinking about the plumber/electrician and their every day boring work trucks. There is a pretty decent segment of truck buyers who will be head over heels for a cyberpunk-bladerunner truck; for instance those who like to fancy up their trucks, compete or go mudding etc...

And that’s not even taking into account functionality, performance or TCO metrics of this cyberpunk-bladerunner truck that can hit a point for professionals who decide the looks aren’t the most important.

Or, if I was a professional who used my pickup everyday for work, had that truck covered in my business name and phone number, I might actually think a cyberpunk-bladerunner truck would get more eyeballs on my moving billboard and thus more customers!

I’m getting one of these futuristic trucks and I don’t fit in any of those above groups. I’ll never be a customer of a Rivian even if I couldn’t tell the difference between one of their trucks and a F150. There’s nothing appealing about it to me.

Be careful how you perceive everyone else’s reality. Be careful how you perceive the future sales of a product you’ve never seen nor been available for anyone to purchase, ever.

 

[dmvevguy]

I bought in last week I guess at a high of 234, should've waited. I hope we are profitable for earnings, which I suspect we will be, and short-term SP surge up.

 

[Chunky Jr.]

I think the market is overreacting to Elon answering "Yes" when asked if there is a limited time for consumers to buy a Tesla once FSD is fully solved. The implication is that prices will increase significantly for a car that can function as a robotaxi.

 

[LJS22]

low volume open today, I promised myself not to worry about the weekly fluctuations in the stock price this summer. If the price should drop below 220 before the Earnings call I'll buy more, until then I'll just try to relax and hope people understand the vision.

Nothing to worry about. All markets are expected to be down today. Earnings call will likely be the next mover (positive or negatively)

 

[ggr]

Sounds to me like the investment side isn’t done buying yet.

“There was much higher demand and deliveries than I predicted, but I was right because it all came from Q3 and Q4.”

Palm, meet face.

Logic flies in the face of increased order backlog.

 

[LJS22]

I think the market is overreacting to Elon answering "Yes" when asked if there is a limited time for consumers to buy a Tesla once FSD is fully solved. The implication is that prices will increase significantly for a car that can function as a robotaxi.

The market doesn’t care about FSD yet. There are many non related Tesla things hurting the market today

 

[Prunesquallor]

That assumes that Rivian will not experience their own version of production hell. They also will not have Model S and X sales to help with the cash flow needed to solve it.

They’ve got Ford/Amazon.

 

[ggr]

Effective cell cooling. A cylindrical cell has a much higher surface-to-volume ratio compared to a prismatic cell, enabling it to be cooled more effectively for high-C charge or discharge cycles.

Actually a cylinder has a lower surface-to-volume ratio than any other cross-section. (A sphere is the absolute minimum, but probably not terribly useful for batteries, although I once saw a study about how to make spherical cells that you could just pour into a container and they would self-organize.) But the distance for conductivity to get heat out is also minimized, so yes, they can be cooled more effectively.

 

[madodel]

When electric cars are relied upon for 70-90% of all miles traveled, I'm sure gas vehicles will still make up over 50% of all registered vehicles but they will be spending more and more time in garages, used for Sunday drives or occasional towing/hauling. Gas stations will still need to exist at reasonable intervals or else entire routes will become off-limits to gas vehicles or require very careful planning to avoid range anxiety. Also, fueling stations will need to exist all over to service the remaining local usage of gas vehicles in rural areas. Since the volume of fuel sales at the remaining fuel stations will continue to decline, it's only natural that profit margins will need to increase (higher fuel markups). Refineries will also have higher mark-ups as gasoline becomes more and more of a specialty product. Even if oil prices remain low due to lack of demand and excess production, gasoline at the retail level will cost a lot more than the historical relationship between the price of oil and gas would indicate.

People who cling to gas vehicles during this period will flip from being the poverty-stricken to the relatively well off who can afford the higher cost and don't care about the negative stigma. Any poor people still driving fossil cars during this period will drive on a strictly "as necessary" basis because it will be so much more expensive than it is now.

I had my Model X at a local car show yesterday. Got a lot of complements but even some of those folks said they could never bring themselves to give up their gas cars. But several said that Tesla represented the future that all cars were headed to. Also got the impression that some folks may have found my Tesla offensive as several cars made a lot of obnoxious noise racing past on the street my car's space backed onto. Or maybe they always drive like idiots. The guy next to me who had a Grand Torino there kept telling me that my Tesla could blow past any of the ones showing off.

 

[shootformoon]

In his model, tesla would always pull forward demand because he refuses to recognize the real growth curve of the EV adoption. Right, in 2021, tesla would be pulling forward the 2025 demand.

Maybe stock analysts became politicians. They just say things to cover his base/ass. Because their clients do not ask for logic or self-consistency.

Adam Jonas has found a new narrative (took him a week to come up with this one): record Q2 is pull-in from what would have normally been H2 sales:

“We update our TesIa earnings forecast following better than expected 2Q deliveries. At this stage, we have assumed the 2Q beat pulled forward demand from the remainder of the year, leaving our full year delivery forecast unchanged at 347k units. Reiterate EW and $230 PT.”

Adjustments to the model:

Deliveries. Tesla beat our 2Q delivery estimate by 13,622 units. We removed 6,500 units from 3Q and 7,200 units from 4Q. We now expect 3Q deliveries to fall sequentially to 91,300 units before recovering slightly to 97,200 units in 4Q. Model mix and price deterioration take our forecasted Y/Y revenue growth to down 3% for 3Q and down 2% for 4Q.

Gross margin. We left our 2Q19 auto gross margin unchanged at 20.0% (ex regulatory credits) and 21.5% including credits. We forecast 3Q and 4Q auto gross margin on an ex-regulatory credit basis to be 20.6% and 20.9% respectively.

What I don’t understand is how he thinks Tesla is fundamentally overvalued but still has a $230 target for the stock. Isn’t that where we are today?

 

[Tslynk67]

I think the market is overreacting to Elon answering "Yes" when asked if there is a limited time for consumers to buy a Tesla once FSD is fully solved. The implication is that prices will increase significantly for a car that can function as a robotaxi.

I don't believe what Elon says and I don't think the markets do either. Today's SP is all about the poor macro and low volume. That being said, $TSLA is doing well against the Nasdaq.

As to the "limited time to buy a Tesla", this doesn't jive with me at all and seems to go against the Mission, also the idea of selling them for $200k all of a sudden, doesn't make sense.

As said up-thread, there's a huge %age of the population that want their own car and don't want to lend it out, that's a fact which will likely not change while they're alive. Maybe for younger generations, born into the new mobility world, it's OK, but not for everyone.

So Tesla need to make as many cars as they can with as low a price as it feasible whilst maintaining good margins for future expansion.

IMO, etc.

 

[powertoold]

I don't think it goes against the mission because once there is a fully autonomous electric car, people wouldn't want to own cars and would just use the ride-sharing service. This would reduce emissions per person.

 

[keydiver]

OT
Be sure the flash drive is operating properly. My wife was recently hit in a parking lot - not her fault - I thought it would be captured on video but apparently the flash drive broke a week before the accident. The driver in the other car was rude. It would have great to have video evidence to share with the police.

Even my new 128 gig flash drive seems to get full or corrupted too quickly. I'm hoping Tesla corrects this in a future update. Once I see the camera icon on the screen is no longer red, I take it in the house and reformat it. Has anyone found any solutions to this issue?

 

[Prunesquallor]

I’m getting one of these futuristic trucks and I don’t fit in any of those above groups. I’ll never be a customer of a Rivian even if I couldn’t tell the difference between one of their trucks and a F150. There’s nothing appealing about it to me.

Be careful how you perceive everyone else’s reality. Be careful how you perceive the future sales of a product you’ve never seen nor been available for anyone to purchase, ever.

Actually, the demographic I had in mind was mid/upper-income professional who uses it primarily as family vehicle (extended cab) with infrequent loads of plywood from Home Depot. I had an Explorer Sport Trac for 10 years and it was a great vehicle. An electric version of THAT I would have bought rather than a Model 3.
Maybe I just can’t envision what’s coming out of Musk’s head. Tesla has been successful by avoiding weirdmobiles, and my perception is the pickup crowd is pretty traditional.

 

[ProfTournesol]

Even my new 128 gig flash drive seems to get full or corrupted too quickly. I'm hoping Tesla corrects this in a future update. Once I see the camera icon on the screen is no longer red, I take it in the house and reformat it. Has anyone found any solutions to this issue?

I had some issues with cheap ass usb sticks, but with usb 3.0 (sandisk) never had an issue again

 

[Tslynk67]

I don't think it goes against the mission because once there is a fully autonomous electric car, people wouldn't want to own cars and would just use the ride-sharing service. This would reduce emissions per person.

Most people, certainly older folks, want their own car. The population as a whole isn't yet ready for ride-sharing.

 

[Tim S]

Same % as home owners who hop on airbnb.

People don't rent out their house during the day while they are at work. They might with their car.

 

[TMThree]

Get a usb to SATA connector for $9 on amazon, then buy a 240GB SSD for $40 and call it a day. Now you have proper media that is designed to handle high writes instead of low end flash memory that dies quickly.