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

[Fact Checking]

Tesla puts "Construction in progress" at $700M. Mostly GF3.

Construction in progress is primarily comprised of tooling and equipment related to the manufacturing of our products and Gigafactory Shanghai construction. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use.
​

If 50% of the entire $700m is depreciated over 5 years it is a small number per quarter (<$10M). That number is too small to affect Q4 results in any significant way. In Q1 '20, at even 1k/wk, it is just $640 per vehicle over a quarter. At 3k/wk that number goes down to $200.

So, I think they will just start delivering. The optics are clearly more useful than $10m hit.

I believe this is the composition of the $700m:

• Less than $500m is GF3 Phase I, as guided repeatedly and confirmed in the last Cc.
• Around $100m additional construction already underway at GF3: the battery workshop for example - to be completed by March.
• At least $100m of Model Y construction costs - underway at multiple sites at Fremont.

The ~$600m related to GF3 are the "primary" drivers of the $700m sum - yet consistent with my $490m estimate of GF3 Phase I.

In any case we seem to agree about the around $10m Q4 impact and the optics of starting deliveries in Q4, which is the important part.

 

[MC3OZ]

Correct, but people are putting value on FSD(because you know it's like the only SOFEWARE option Tesla sells with 100% margins).

Most people putting s non-zero value of FSD will not sell shares below $420 or have a price target north of $420..

I don;t think an isolated incident involving an inattentive driver will change their opinion...

If we are talking about informed investors, most of them have already been shaken out by previous waves of FUD.

If we are talking about Shorts opening new positions, that is nothing we haven;t seen before, many times over.

 

[Fact Checking]

What I am missing is I thought I invested in a high growth tech company with margin scalability of 60%+ and not a car manufacture that needs to make/sells lots of cars just to keep the lights on. Everyone else who thinks Tesla is a cheap buy today I believe thinks like me. If not then I don't know what we are doing here. Car manufacturing has very low opportunity of massive margin expansion. Apple got their valuation from a ton of software sales and really high margin products. Tesla needs to go that route and not the Toyota route.

Your complaints are misplaced, Tesla has been going that route for the last ~5 years.

Still your original claim is false, which you still didn't retract or correct:

TSLA current valuation is tied to FSD. It's certainly not tied to car manufacturing.

This is false, and as an investor you should be happy that TSLA is still only valued as a car company and is worth $330: your "tech company" thesis is yet to be recognized, and you already have profits on your investment.

Once real FSD valuation is recognized in TSLA it will be a massive event.

Not advice.

 

[Beltsbear]

What I am missing is I thought I invested in a high growth tech company with margin scalability of 60%+ and not a car manufacture that needs to make/sells lots of cars just to keep the lights on. Everyone else who thinks Tesla is a cheap buy today I believe thinks like me. If not then I don't know what we are doing here. Car manufacturing has very low opportunity of massive margin expansion. Apple got their valuation from a ton of software sales and really high margin products. Tesla needs to go that route and not the Toyota route.

Seriously?

Tesla is growing (much) faster then Apple, in fact more like Amazon in their hypergrowth phase.
Tesla has huge margins like Apple (unlike Amazon).
Tesla is selling products with five digit price tags unlike Apple.
The room for growth is ridiculous unlike Apple.
The combination of those four is literally unheard of.

I need to buy more stock.

 

[EVNow]

Correct, but people are putting value on FSD(because you know it's like the only SOFEWARE option Tesla sells with 100% margins).

Just to make sure we are talking about the same thing, what is the "FSD" you are referring to ?
1. The current FSD option Tesla sells for $7k, that can be recognized once City NOA is delivered
2. Robotaxi dream with level 4/5 autonomous driving

(1) is built into the price. (2) is not.

 

[Singuy]

Seriously?

Tesla is growing (much) faster then Apple, in fact more like Amazon in their hypergrowth phase.
Tesla has huge margins like Apple (unlike Amazon).
Tesla is selling products with five digit price tags unlike Apple.
The room for growth is ridiculous unlike Apple.
The combination of those four is literally unheard of.

I need to buy more stock.

Apple Iphones has like 60%+ margin and their App store margin is a whole new ball game. So I don't know what you mean by Tesla's 22-23% margin is like Apple's.

 

[Krugerrand]

Are you saying you bought Tesla putting zero weight in the possibility of FsD?

Um...yeah. I bought vast majority of my shares in 2012.

 

[Singuy]

Just to make sure we are talking about the same thing, what is the "FSD" you are referring to ?
1. The current FSD option Tesla sells for $7k, that can be recognized once City NOA is delivered
2. Robotaxi dream with level 4/5 autonomous driving

(1) is built into the price. (2) is not.

Robotaxi is priced in for Tesla longs. You know the type who doesn't sell no matter the FUD or how much Tesla is losing money because they think the stock is worth 4k one day? The type who buys Tesla shares no matter if it's 200 dollars a share of 400 dollars a share because they think it's a bargain compared to 4k? Yeah those longs. You, me, and almost everyone on this forum.

 

[Fact Checking]

Reporting site:
Someone on Twitter is engaging in abusive or harassing behavior

Sample tweet that could be referenced in the report - here he's claiming that he can get away with it because Musk won:
Elon Musk is A Child Rapist - Can't Sue on Twitter

In the Twitter app you can also report tweets directly, by tapping on the small corner widget next to the tweet.

You can also select multiple tweets to report, and you'll get notifications about the review process.

Two abusive users got banned in the last two days that I (and probably others) reported this way.

Important: if you want to report TSLAQ abusers too, then you need to visit the TSLAQ block list owner and block him:

Machine Planet (@Paul91701736) | Twitter​

This way he cannot put you on the TSLAQ block list and won't be able to hide their abuses from you.

​

 

[Fact Checking]

Robotaxi is priced in for Tesla longs.

For every retail long that bought for robotaxi FSD there's at least 10x more institutional investors who didn't buy or sold because they don't believe in the long term autonomy plans and consider them an unnecessary expense, risk and distraction.

In terms of TSLA pricing effect, the bigger group's effects dominate.

I.e. I believe the "robotaxi FSD valuation" component priced into TSLA is currently near zero or even negative.

 

[StealthP3D]

Who the heck said it's a doom Monday? I just don't think there will be a short covering +5% or 8% kind of day. You guys are really taking what I am arguing out of context.

Not a single soul mentioned or alluded to a +5% or + 8% Monday (except for you). What we have heard repeatedly is how the reporting on a single car crash (in which the driver was charged for negligence) will significantly impact TSLA shares negatively Monday morning.

Please stop with the illogical nonsense! What's tiring is your repeated assertions that your scenario is supported by the facts and reality. Keyword: repeated.

 

[Beltsbear]

Apple Iphones has like 60%+ margin and their App store margin is a whole new ball game. So I don't know what you mean by Tesla's 22-23% margin is like Apple's.

In 2020, when you count what is coming from FCA and FSD you will find you are wrong. Also, Apple only makes 60% gross on a few products, not the most popular ones.

 

[agloutney]

Geez talk about thread drift! Flying in alternate law isn’t a whole lot different than flying in normal law minus a few protections which a competent pilot wouldn’t get close to anyways. It’s basic flying 101 to not stall it. Side stick or not is pretty irrelevant I think since anyone can override the other which he would have done if he knew what he was doing.

 

[MC3OZ]

For every retail long that bought for robotaxi FSD there's at least 10x more institutional who didn't buy or sold because they don't believe in the long term autonomy plans and consider it an unnecessary expense, risk and distraction.

In terms of TSLA pricing effect, the bigger group's effects dominate.

I.e. I believe the "robotaxi FSD valuation" component priced into TSLA is currently near zero or even negative.

In the wider Tesla community including many owners and some investors most don't expect working Robo-taxi's anytime soon if at all..

There is plenty of "healthy scepticism", in fact most go out of their to express doubts, based on the current failings of AP...

I expect working Robo-taxis in 5 years, and I'm at the optimistic end of the scale,.....

My impression is Tesla owners and investors have limited knowledge of this topic, the general public including most share analysts are even more clueless.

Only a handful of people including Elon and Karpathy have any real idea of where progress is currently at...and how long it may take.. everyone else, including me, is guessing to some extent...

Something this uncertain with so many doubts expressed frequently by so many, isn't priced in.

 

[Singuy]

Not a single soul mentioned or alluded to a +5% or + 8% Monday (except for you). What we have heard repeatedly is how the reporting on a single car crash (in which the driver was charged for negligence) will significantly impact TSLA shares negatively Monday morning.

Please stop with the illogical nonsense! What's tiring is your repeated assertions that your scenario is supported by the facts and reality. Keyword: repeated.

No, I said it'll put a damper on the "short covering" you were hoping for on Monday. Remember this was a response to that very comment. You think shorts will cover Monday. I think meh, it might trade flat cause the good news is countered by the bad news. Nothing more, nothing less.

Perhaps you took my tongue and cheek out of context when I said "shorts instead of *sugar* their pants will cream their pants". I mean if I were a short going into Monday, I would be scared shitless..but the AP crash news plus the entire MSM will be on my side so crisis averted. That's all I am saying.

 

[hacer]

Bill Gates still drives an old Ford Focus(?) when he retires, he doesn't care about cars all that much

 

[Singuy]

In the wider Tesla community including many owners and some investors most don't expect working Robo-taxi's anytime soon if at all..

There is plenty of "healthy scepticism", in fact most go out of their to express doubts, based on the current failings of AP...

I expect working Robo-taxis in 5 years, and I'm at the optimistic end of the scale,.....

My impression is Tesla owners and investors have limited knowledge of this topic, the general public including most share analysis are even more clueless.

Only a handful of people including Elon and Karpathy have any real idea of where progress is currently at...and how long it may take.. everyone else, including me, is guessing to some extent...

Something this uncertain with so many doubts expressed frequently by some many, isn't priced in.

You know Nvidia exploded because people were pricing in robotaxis using their chip because the CEO said so. Then it fizzled out as it's unlikely to happen. But there are still a good portion priced Nvidia with the slight chance that it may. This is what I mean by robotaxi priced in. Elon had some slides, people were skeptical..but hey throw in some bones just incase.

 

[Singuy]

In 2020, when you count what is coming from FCA and FSD you will find you are wrong. Also, Apple only makes 60% gross on a few products, not the most popular ones.

Happy to be wrong, all though FCA or any future credits are not sustainable so I wouldn't price those things in part of anyone's business model(nor is Tesla).

 

[StealthP3D]

Correct, but people are putting value on FSD(because you know it's like the only SOFEWARE option Tesla sells with 100% margins).

You keep trying to argue that this accident is going to help define the trading Monday morning. How about we watch what happens and then we can analyze it. Because I don't think a single Tesla crash is a net negative. If anything, the fact that he rear-ended a State Trooper parked on the Interstate and didn't cause a single injury is a testament to the crash safety of a Tesla. Did you see the rear end of the trooper's car? It was totaled. And it happened in the wee morning hours of a Saturday. Chances are he had been drinking excessively and just used the Auto-Pilot as an excuse so they wouldn't suspect impaired driving. I mean, how else do you miss a flare in the roadway and flashing lights on the parked trooper's car? Not by "checking" on your dog in the back seat!

 

[Fact Checking]

Flying in alternate law isn’t a whole lot different than flying in normal law minus a few protections which a competent pilot wouldn’t get close to anyways. It’s basic flying 101 to not stall it.

There were three competent, experienced pilots in the AF 447 cockpit, and all of them were trying to avoid the stall as any pilot would, but a nasty software bug tricked all of them into causing a stall until it was too late:

Air France Flight 447 - Wikipedia

"this led to a perverse reversal that lasted nearly to the impact: each time Bonin happened to lower the nose, rendering the angle of attack marginally less severe, the stall warning sounded again—a negative reinforcement that may have locked him into his pattern of pitching up", which increased the angle of attack and thus prevented the aircraft from getting out of its stall"​

This "Pull up! Pull up!" loud human voice warning is what convinced them to maintain the stall:

That aggressive "pull up!" warning sounded every time they were pitching down.

Just try out how good of an AF 447 pilot you'd make: play the above recording, turn up the volume, listen to that voice, imagine you are in pitch black dark conditions, falling into a bad thunderstorm with dangerous downdrafts, you are responsible for 228 lives, you are in the middle of the ocean where even an emergency landing is probably not survivable, you have conflicting computer screen output and very low air speed readings and fast dropping altitude, other human voices nearby trying to help you, and try to ignore the "pull up!" human voice command!

Even with the benefit of perfect hindsight it's hard, and they were the first ones to run into this particular stall scenario...