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

[tslagreen]

There’s no recession, and there will not be a recession. Unemployment low, strong earnings, etc.

“Wah trade war wah bonds”

Lol get out of here. I see so many freaking Tesla’s being sold. It’s insane. INSANE. The growth has become exponential here in the northeast. I was going to start a challenge: I would buy a share every time I see a Tesla. Nope not happening. I see 20-30 a day while casually driving/shopping at Costco and the mall...

The year is 2030 and the S&P just broke the 1 million level following an algo-induced short squeeze after Trump tweets, “President Ivanka headed to China to negotiate an even better deal for USA. Chinese seriously intimidated because she’s hot.” It has now been 12 years, a trade deal is nowhere in sight and despite a global economic collapse, the market still rallies 2% every time Trump tweets that a deal is close—which happens just about every day. The occasional down days are the result of rumors that the UK has scrapped yet another BREXIT plan.

Definitely can confirm the boom in Teslas everywhere. I am in MA and have also seen a ton this summer. I have owned a Model S since 2015 and my once rather lonely stays at the charging stations have been replaced with almost full stations charging next to 3s, Xs and Ss. Good to see!
Reminds me of the rather basic investing philosophy of Peter Lynch - buy the companies you come across in daily life (assuming you also do some due diligence).

 

[Artful Dodger]

in a recession people & businesses stop or delay buying new cars as it’s one of the easiest discretionary spending items that can be cut. It doesn’t matter whether it’s ICE or EVs, a recession will be terrible for all car companies regardless.

"It's a recession when your neighbor loses his job; it's a depression when you lose yours." -- Harry S Truman.
​

Full employment in the USA. This is no more a recession than the Fall Phreak-out was last year. It's a Wall St. games, and its called "milk the cowz". Now Wall St. is ransoming the Economy to get the interest rate cut they want from the Fed. Same way they got their $15T bailout in 2008-9 by threatening to crash the economy. SSDD.

 

[Singuy]

Because of this: “Warning signs that the U.S. economy could be barreling toward a recession quickly became alarm bells Wednesday after the Treasury bond yield curve—a key indicator that has preceded every major downturn over the past five decades—inverted for the first time since the Wall Street crash of 2007.”

I wouldn’t brag too much about corporate taxes being low and interest rates near rock bottom. Those are levers that should be pulled only when we are IN a recession to help lift us out. Now when we have another recession, we cannot use those.

Unemployment and spending habits can quickly change in a matter of months. People can be extremely fickle.

Yeah it's BS. You do realize the last recession was so bad that companies that ended up alive did so by triming fat and added a stupid amount of efficiency which is leading to record profits year after year.

This in conjunction with interest rates being so low, there are very few alternatives to equities that can get you a return beyond inflation.

 

[SO16]

Definitely can confirm the boom in Teslas everywhere. I am in MA and have also seen a ton this summer. I have owned a Model S since 2015 and my once rather lonely stays at the charging stations have been replaced with almost full stations charging next to 3s, Xs and Ss. Good to see!
Reminds me of the rather basic investing philosophy of Peter Lynch - buy the companies you come across in daily life (assuming you also do some due diligence).

Still pretty sparse in West Michigan but is increasing. The anti Tesla laws have worked quite well here....unfortunately.

 

[Thekiwi]

There’s no recession, and there will not be a recession. Unemployment low, strong earnings, etc.

“Wah trade war wah bonds”

Lol get out of here. I see so many freaking Tesla’s being sold. It’s insane. INSANE. The growth has become exponential here in the northeast. I was going to start a challenge: I would buy a share every time I see a Tesla. Nope not happening. I see 20-30 a day while casually driving/shopping at Costco and the mall...

The year is 2030 and the S&P just broke the 1 million level following an algo-induced short squeeze after Trump tweets, “President Ivanka headed to China to negotiate an even better deal for USA. Chinese seriously intimidated because she’s hot.” It has now been 12 years, a trade deal is nowhere in sight and despite a global economic collapse, the market still rallies 2% every time Trump tweets that a deal is close—which happens just about every day. The occasional down days are the result of rumors that the UK has scrapped yet another BREXIT plan.

Be careful comparing a company’s performance with the stock performance during a recession. Apple fell from $28 a share to $12 a share in the last recession, a nearly 60% fall, and that was AFTER the iPhone was released.

 

[SO16]

Yeah it's BS. You do realize the last recession was so bad that companies that ended up alive did so by triming fat and added a stupid amount of efficiency which is leading to record profits year after year.

This in conjunction with interest rates being so low, there are very few alternatives to equities that can get you a return beyond inflation.

I do hope you’re right!!!!!

 

[Artful Dodger]

Electric Vehicle Q3 Progress Over Q2 - All EVs

So much for the US Federal EV Tax Credit demand cliff. Telsa's cost cutting measures and production efficiency improvements have allowed them to reduce retail prices in step wtih the reduced incentives.

Gee, I wonder if that could possibly have been what the authors of this Legislation had in mind years ago? Stimulate EV production, then let them move forward on their own? Brilliant, when it works.

Cheers!

 

[Singuy]

I do hope you’re right!!!!!

The last recession was very unique and scary for any corporation because the BANKs stop lending money to weather a run on the bank reality. That's the bloodline of any corporation so it was a do or die moment. This is why so many people complain about "record profit and record productivity and yet stagnant wages". Yeah no *sugar*.. corporations really had to pull miracles to stay alive and of course those measures remained because it's good for business.

 

[LN1_Casey]

Be careful comparing a company’s performance with the stock performance during a recession. Apple fell from $28 a share to $12 a share in the last recession, a nearly 60% fall, and that was AFTER the iPhone was released.

Well, for long term thinking, Apple is still around, at $200+ a share, a global recognized company, one of the FAANG companies. There are even very like minded (and some say better) products than the iPhone, and almost no one has a flip phone any more.

Think about the same thing happening to Tesla.

 

[KarenRei]

Article on CNN with projected electric car production for the year 2025.
Has Tesla only producing 412,000 per year in 2025.

The race to the electric car is just getting started
View attachment 441993

Next year they'll probably beat that number *by the end of Q3*, let alone needing a whole year - 5 1/2 years in the future - to do so.

(average 110k cars/quarter from Fremont + 3k/wk from GF3 - not even that bullish)

 

[LN1_Casey]

Electric Vehicle Q3 Progress Over Q2 - All EVs

Man, just look at the sheer numbers of Tesla vs. everyone else. Even the other companies who did better QOQ than them, Fiat and Hyundai, only did so because they went from 20 sold to 40 and 77 to 150. That's less, combined, than Model 3's sold in a *day*.

To be fair though, there is 31 days in July vice the 30 days in April, so if you want day for day, it was about the same. Haha, though another 95k+ quarter isn't a bad thing!

 

[anthonyj]

Be careful comparing a company’s performance with the stock performance during a recession. Apple fell from $28 a share to $12 a share in the last recession, a nearly 60% fall, and that was AFTER the iPhone was released.

But there won’t be a recession

 

[pyromatter]

 

[mongo]

Still pretty sparse in West Michigan but is increasing. The anti Tesla laws have worked quite well here....unfortunately.

Southeastern Michigan is fairing better. Saw 3 Teslas on a 5 mile commute home last night (not freeway either)

Michigan itself is not fairing well since Ohio gets most of the sales tax. On a 50k ASP, Ohio gets $2,875 and Michigan gets $125.
Dumb. That's the equivalent of income taxes on a resident earing >$60k a year.

 

[Chocochip]

Next year they'll probably beat that number *by the end of Q3*, let alone needing a whole year - 5 1/2 years in the future - to do so.

(average 110k cars/quarter from Fremont + 3k/wk from GF3 - not even that bullish)

This reminds me of what (I think) Dawkins said, about how religious beliefs have had to regularly adjust to scientific discovery throughout the ages, rather than the other way around (for instance, no mainstream religion nowadays still claims that lightning and thunder is a manifestation of the wrath of gods).

Similarly, EV market growth estimates have had to - and will have to - constantly adjust to Tesla's reality. Kinda fun to watch!

 

[humbaba]

Can't wait for battery tech day... I can't help but wonder how it will be possible for the other companies to scale up BEV production given their reliance on ICE and ICE service revenue. I just don't see anyone making batteries in volume.

I was hopeful for Porsche and Audi, and I hope that they find success with BEV...
Perhaps there will be a Chinese company with a low cost city car that will go worldwide.

Yeah, they all make big claims and have been for years with nothing to show for it. I've long believed their achilles heel in this regard is how everything is outsourced which drives up costs.

Q.
Is there concern out there about competition for Tesla? It seems every "killer" is more of a lame duck with low production volume.

My concern is the lack of competition. We'll see how the Taycan holds up when it actually becomes available, but so far it seems to be the most compelling "Tesla killer." The Bolt appears to be on life support while the Leaf keeps soldiering on: neither one is a true competitor.

Q.
I have seen video of Model 3's on AP driving on what looks like city streets and two lane roads. Are there different versions of AP for the Model 3, relative the the Model S and X?

Yes, if you find an old Model S with AP1 that is different. I drive my Model 3 using AP on city streets and two lane roads. One thing I've noticed is that while you cannot engage autosteer without lane markings it will drive just fine if they disappear. This has gotten some distance with in-town driving before the inevitable braking occurs.

Q
Is the macro environment as ominous as I think it is? I am fearful.

While I can observe the effect of macros on $TSLA I lack the experience to make any predictions about what macros will do. That said, $TSLA can and has ignored macros completely. For example, late last year when macros were tanking $TSLA was going up. Of course, the reverse is also true where $TSLA will tank on no news while macros take off.

So I guess I don't see any reason to be fearful due to macros. No one really knows if/when $TSLA will follow them, though in general it does. The thing is, if macros are down then -- relatively speaking -- other investments are down. It sucks if $TSLA goes down more than others, but I'm not sure $TSLA even made it past 3rd place for losers yesterday.

If you are going to have to cash out of $TSLA then doing so while its down sure sucks, but over the next 5-10 years it will almost certainly reach new highs.

 

[Unpilot]

If you are going to have to cash out of $TSLA then doing so while its down sure sucks, but over the next -1-2 years it will almost certainly reach new highs.

I fixed that for ya.

 

[humbaba]

Southeastern Michigan is fairing better. Saw 3 Teslas on a 5 mile commute home last night (not freeway either)

Michigan itself is not fairing well since Ohio gets most of the sales tax. On a 50k ASP, Ohio gets $2,875 and Michigan gets $125.
Dumb. That's the equivalent of income taxes on a resident earing >$60k a year.

When I was in Michigan I think the only time I saw a Tesla was at a supercharger. And even those I met who expressed an interest in my car were muted in a "the walls have ears" kind of way. Detroit has a lot of influence and they do not like Tesla. Cutting off the nose to spite the face sounds very much like what I saw.

(As an aside on how divorced from reality things appear to be, I was told in no uncertain terms that all GM vehicles would be autonomous without steering wheels by 2025. This while Cruise has finally officially admitted they won't make their 2019 deadline.)

 

[humbaba]

I fixed that for ya.

I wasn't meaning to sound pessimistic, it was more of an expression of "in the long term this is only going up."

 

[Artful Dodger]

Next year they'll probably beat that number *by the end of Q3*, let alone needing a whole year - 5 1/2 years in the future - to do so.

(average 110k cars/quarter from Fremont + 3k/wk from GF3 - not even that bullish)

Yup. Nobody will remember a Aug 2019 click-bait article on CNN.com by Oct 2020, but CNN gets their click$ today. Sweeet...

412K/yr is about 1,059 Model 3s per daily average production, or approx. 7,413/wk. There's a good chance Tesla Fremont does that before GF3/Shangai produces its first Model 3. In fact, there's a non-zero chance Fremont exits 2019Q3 at that run-rate.

BTW, a run-rate of 7.4K/wk equates to about 27.2 GWh/yr of battery packs (@66KWh avg per pack). We've heard separately from Tesla that GF1/Sparks is at that run rate already. And those bty packs aren't just piling up, they're going into cars. So with 90 production days in Q3, that's approx. 95,310 Model 3s produced in the quarter, less a few for hiccups of course.

Panasonic said they'll be at 35 GWh/yr run rate at GF1 by early 2020 (I think that'll be timed to support inaugural production of Model Y). Those 7.8 GWh/yr of extra cells would allow an initial run rate for Model Y of about 2.1K/wk. Ooh that'll be good to start, but obviously we're gonna need more cells. And a bigger boat.

Cheers!