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

[jerry33]

With Tesla still being pretty secretive about the Model Y and deliveries starting in a matter of weeks, do you think that there will be an announcement soon of a delivery event? Perhaps even highlight some of the features and differences compared to Model 3? Or will they want to avoid any comparisons to Model 3 that would “cannibalize” their sales. Hopefully we hear something announced by next week!

I don't believe Tesla is too worried about cannibalization because the real sedan market is in Europe, and there are many places where there is demand but no Teslas or not the model 3 config people are waiting for. Any cannibalization that happens in North America will be easily absorbed by other locations.

 

[AlexS]

Anyone worried about Q1 by any chance? Lack of federal tax credit, 1 week delay on Shanghai factory, etc.? Just curious to get perspective for short term Q1 as I have $ ready to be deployed, but trying to figure out if it makes sense to wait until after Q1 and before Investor / battery day in April...

no

 

[lascavarian]

Anyone worried about Q1 by any chance? Lack of federal tax credit, 1 week delay on Shanghai factory, etc.? Just curious to get perspective for short term Q1 as I have $ ready to be deployed, but trying to figure out if it makes sense to wait until after Q1 and before Investor / battery day in April...

Not knowing when battery investor day will happen is an unknown but it overall is a positive. Q1 likely to be dicey but battery news might be bullish. It is a very hard call as I see it. Too many unknowns to have much confidence. Wait, not wait, virus etc. Timing is a fraught endeavor.

 

[lafrisbee]

whew
The Real Driver Of Tesla’s $100 Billion Valuation Is The Dearth Of Innovation In The Auto Industry

 

[LJS22]

Anyone worried about Q1 by any chance? Lack of federal tax credit, 1 week delay on Shanghai factory, etc.? Just curious to get perspective for short term Q1 as I have $ ready to be deployed, but trying to figure out if it makes sense to wait until after Q1 and before Investor / battery day in April...

Concerned for the quarter itself. I think numbers will disappoint, but there seems to be a bigger picture forming. Elon has spent most of 2020 at SpaceX, so that’s a great sign that things are going according to plan.

All the cars being back ordered 6-8 weeks is strange if demand is a thing. The China stuff will hurt a bit, but what can you do. We’ll see this could be a big end of quarter push that Musk alluded to during earnings call. If they post decent numbers with a small profit that’s a huge victory

 

[StealthP3D]

It's a shame that Exxon et al don't do more with their Intellectual capital. They've likely been hiring some of the best chemists and scientists for decades. E.g. their scientists could relatively accurately predict global warming the best part of half a century ago.

It's a shame they don't devote some of that capital to battery science, they are in a better position than many to make rapid progress.

Batteries? Silly Tiger, batteries are for cell phones and radios, everyone knows oil is for cars.

 

[humbaba]

So Daimler's problems seem to be that of all the legacy makers. This is a prelude to what is coming for all. The WSJ link posted earlier is paywall, so I used Daimler : Profit Slump Pushes It to Slash Dividend -- 2nd Update | MarketScreener

Some thoughts:

With demand for cars falling world-wide, auto makers more broadly are cutting prices, making it hard to offset the rising costs of building electric cars with a vast array of digital features.

Here there is acknowledgement that there is a demand problem... for legacy vehicles. But, they then have to water down that point by implying that EVs are expensive due to having digital features.

It is also unclear whether Daimler's efforts will result in enough electric vehicle sales. Demand for plug-in electric cars in Europe remains weak, accounting for around 4% of new car sales last year, according to the European Automobile Manufacturers' Association.

Unfortunately there is still quite a bit of denial. In the previous quote they explicitly acknowledged that demand was falling world-wide for cars, but here they cite the 4% EV market share as "weak demand" rather than pointing out that the sales have been growing both in absolute numbers and percent of market. Maybe its because I'm not a (financials) analyst or journalist, but they way it was presented seems to be a rather strange way to define demand.

Daimler's woes reflect those afflicting the broader automotive industry. As the global economy has been weakened by trade disputes, political upheaval and the spread of coronavirus in China, demand for new luxury vehicles is also softening.

And, yet, Tesla seems to be growing sales in China. Funny, that.

Its almost like buyers -- whether through coercement by their governments, a concern for the environment, or a desire to have a vehicle that is overall better than legacy -- are either buying EVs rather than legacy vehicles, or deferring purchases for a more opportune time.

Regardless, Daimler only appears to have been the weakest, but I don't expect Ford to be long in reaching a similar state. And others will follow, I expect at an accelerated pace due to the interwoven nature of their businesses.

 

[lafrisbee]

So Daimler's problems seem to be that of all the legacy makers. This is a prelude to what is coming for all. The WSJ link posted earlier is paywall, so I used Daimler : Profit Slump Pushes It to Slash Dividend -- 2nd Update | MarketScreener

Some thoughts:


Here there is acknowledgement that there is a demand problem... for legacy vehicles. But, they then have to water down that point by implying that EVs are expensive due to having digital features.


Unfortunately there is still quite a bit of denial. In the previous quote they explicitly acknowledged that demand was falling world-wide for cars, but here they cite the 4% EV market share as "weak demand" rather than pointing out that the sales have been growing both in absolute numbers and percent of market. Maybe its because I'm not a (financials) analyst or journalist, but they way it was presented seems to be a rather strange way to define demand.


And, yet, Tesla seems to be growing sales in China. Funny, that.

Its almost like buyers -- whether through coercement by their governments, a concern for the environment, or a desire to have a vehicle that is overall better than legacy -- are either buying EVs rather than legacy vehicles, or deferring purchases for a more opportune time.

Regardless, Daimler only appears to have been the weakest, but I don't expect Ford to be long in reaching a similar state. And others will follow, I expect at an accelerated pace due to the interwoven nature of their businesses.

and the reason IS!
The Real Driver Of Tesla’s $100 Billion Valuation Is The Dearth Of Innovation In The Auto Industry

 

[ninpb]

I don't believe Tesla is too worried about cannibalization because the real sedan market is in Europe, and there are many places where there is demand but no Teslas or not the model 3 config people are waiting for. Any cannibalization that happens in North America will be easily absorbed by other locations.

For long term, is cannibalization even a worry for tesla especially for the Y to the 3 being in the same economy/luxury class? Is teslas mo still made to order cars? Are the assembly lines for the 3 and Y interchangeable(with some modifications)?

 

[FrankSG]

Daimler AG reports loss and is slashing dividends tremendously.

Daimler’s Profit Slump Pushes It to Slash Dividend

Ford and Daimler are the first omens of what is to come. The next five years are going to be real ugly for traditional auto.

 

[humbaba]

I am. Well, not worried per se as I'll use that as an opportunity to buy some options and maybe shares but I think there are good odds we have some pain. Expectations are sky high right now. A bad Q1 will be spun as "demand problems" and all the casual investors and analysts that are just riding the bandwagon will likely decide that the sky is falling.

They mentioned that to the consumer the differences will be much more than we think. I'm curious to see what they meant by that. ​

I'm not sure what impact coronavirus will have on Tesla China's revenue, but I expect Q1 results to be spun as negative. The analysts and press will insist on comparing it to Q4, pretend that automotive seasonal weakness in Q1 uniquely doesn't apply to Tesla, ignore battery day, semi, etc., etc.

Before the latest round of FUD I put the probability of the foregoing as rather less. The press and analysts and fairly come around to, even if not really being positive, at least giving the FUD a rest. But Andrew Left and friends have shown that they are still capable of controlling the media narrative. I suspect that two things precipitated the recent attack: first, that $TSLA was doing so extraordinarily well. While long expected and overdue, the sudden rise was so sharp that it made some people (even here) nervous. This set the stage for an attack, to demonstrate through knocking the price down that it had been "overvalued." Second, the timing advantage of Q1 which is seasonally weak, though you wouldn't know that it was seasonal for Tesla by reading the press or following analysts.

Bottom line is that the rapid rise gave confidence to the bottom feeders that they could monetize it by knocking it down and set the narrative for Q1 and use an "I told you so" when QoQ deliveries fail to increase (no matter how much better it ends up being than 1Q19).

Am I worried? Yes, I am deeply concerned because I don't know how deep of a discount on $TSLA shares they are going to give me.

 

[LJS22]

whew
The Real Driver Of Tesla’s $100 Billion Valuation Is The Dearth Of Innovation In The Auto Industry

The auto industry wants to catch Tesla with their half assed attempts at going electric. Idk if they are waiting for Musk to stop expanding so they can copy his homework, or they are trapped between watching their companies die a slow death or a quick one.

 

[Cosmacelf]

For long term, is cannibalization even a worry for tesla especially for the Y to the 3 being in the same economy/luxury class? Is teslas mo still made to order cars? Are the assembly lines for the 3 and Y interchangeable(with some modifications)?

No, not a worry, and yes, it appears that the assembly line between the 3/Y is flexible enough that they can at least batch different builds.

 

[lascavarian]

Unfortunately there is still quite a bit of denial. In the previous quote they explicitly acknowledged that demand was falling world-wide for cars, but here they cite the 4% EV market share as "weak demand" rather than pointing out that the sales have been growing both in absolute numbers and percent of market. Maybe its because I'm not a (financials) analyst or journalist, but they way it was presented seems to be a rather strange way to define demand.

Falling demand is the fatal conundrum for those trapped in the ICE world. Tesla has impressed enough to cause some contemplation among ICE buyers. Should I buy now or wait? Easiest is to just wait a bit more and that is a killer for the industry. Every day EV gets stronger and ICE gets easier to keep delaying. Every month there are more chargers and better battery tech so the trend turns toward the EV future.

 

[dl003]

Additionally, articles from the mainstream media can be used to bolster our case that we are more of a religion than a business.

I wouldn't be surprised if colleges begin to study leadership and culture at Tesla as a newly spawned type of organization.

 

[humbaba]

and the reason IS!
The Real Driver Of Tesla’s $100 Billion Valuation Is The Dearth Of Innovation In The Auto Industry

sadly, walled off. No summary? (No, I don't allow ads, but the reasoning for that is OT)

edit: sure, I see the headline, but that just invites speculation as to what they mean by "dearth of innovation"

 

[S3XY]

I admit, a future 350 mile Model Y AWD sounds awfully tempting. If can keep depreciation below 20% I'll probably swap. And if not, my Model 3 LR is shaping up to be a fine long term car for us.

Especially when it's worth $200k with FSD.

 

[Cosmacelf]

The auto industry wants to catch Tesla with their half assed attempts at going electric. Idk if they are waiting for Musk to stop expanding so they can copy his homework, or they are trapped between watching their companies die a slow death or a quick one.

I know you were being flippant, but the reason they can't catch Tesla is they aren't as competent as Tesla is. For a whole bunch of reasons (legacy constraints being a big one). Analysts kept saying just wait until Big Auto starts competing and then watch out. The reality is the exact opposite. Big Auto just isn't as good as Tesla.

 

[Chocochip]

Some thoughts:

Here there is acknowledgement that there is a demand problem... for legacy vehicles. But, they then have to water down that point by implying that EVs are expensive due to having digital features.

Unfortunately there is still quite a bit of denial. In the previous quote they explicitly acknowledged that demand was falling world-wide for cars, but here they cite the 4% EV market share as "weak demand" rather than pointing out that the sales have been growing both in absolute numbers and percent of market. Maybe its because I'm not a (financials) analyst or journalist, but they way it was presented seems to be a rather strange way to define demand.

And, yet, Tesla seems to be growing sales in China. Funny, that.

Do not expect "journalists" to understand the EV market, or the EV technological superiority, or any other subtlety. Whenever I read one of these "reports" I try to separate the actual facts being reported from the reporter's or editor's opinion on those facts. Problem is, sometimes those opinions are presented as facts, so there's extra work involved in following up and reading the same news from different sources. It's also that they try really hard to sound like they know what they're talking about, even when (or even though) they don't.

In this specific instance, the journalist saw 4% sales of EVs and thought "hm, 4% is a small number... that's very weak demand!", and probably never bothered to check what that number was one, two and three years ago, and what the resulting growth looks like.

The only reason this type of reporting has a negative effect is because the majority of the population gets its information from these sources, and then become convinced this is the state of EV adoption and of the auto market in general. People don't have the time or interest to dig deeper than a short story on their favourite financial news website, so in a way these journos are opinion-formers.

 

[lafrisbee]

sadly, walled off. No summary? (No, I don't allow ads, but the reasoning for that is OT)

edit: sure, I see the headline, but that just invites speculation as to what they mean by "dearth of innovation"

Allen AdamsonContributor
CMO Network


The headlines about the valuation of Tesla seem to multiply along with the company’s share price. As the electric-car maker’s market value recently topped $100 billion, it’s clear that Elon Musk has driven Tesla into a new zone. ...

Mod: Copyright image and most of article deleted. @lafrisbee, you're new here, but to all, do not do this. It's illegal and against the terms of service. --ggr