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

[aronth5]

Legacy auto has no incentive to make EVs

I recently watched the 3rd row podcast with elon and sandy monro... It was pretty good. However, I don't understand why people expect legacy automaker to make EVs. They have no incentive... whatsoever.

Actually they do with recent government announcements stating the phase of out fossil fuel cars. And of course the fact Tesla will steal sales just adds to the pressure. I do agree with the statement they have no reason to make EV's except for outside pressures.
Phase-out of fossil fuel vehicles - Wikipedia

 

[FrankSG]

Actually they do with recent government announcements stating the phase of out fossil fuel cars. And of course the fact Tesla will steal sales just adds to the pressure. I do agree with the statement they have no reason to make EV's except for outside pressures.
Phase-out of fossil fuel vehicles - Wikipedia
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The issue is that management is mostly compensated for meeting short term goals (earnings), and Wall Street also is mostly focused on short term (quarterly) numbers.

So even though governments have indicated that EV regulations will continue to get stricter throughout the next decade, OEMs are only incentivized to do the bare minimum and comply with regulations in the next 1, 2, maybe 3 years.

Wall Street cares more about the next quarter's profits and this year's numbers than what happens to the company in 5 to 10 years, and management has a similar attitude because their bonuses are based on the short term, and they may not even work for the same company anymore in 5 to 10 years, so who cares about what happens then?

 

[phantasms]

Cyber

Sexy

 

[StealthP3D]

Unfortunately, the other side of the coin is that cleaner air leads to fewer deaths (and overpopulation), lower demand for EVs by greens, and increased global warming according to some studies, as mentioned here:

Cleaning Up Air Pollution May Strengthen Global Warming

Except the article doesn't say what you are claiming. And there is no evidence that headway in reducing pollution levels would result in lower demand for EV's by "greens". It seems you just made that up.

And if cleaner air results in fewer deaths, which in turn means more overpopulation and more pollution, I guess it's helpless. Pollution is actually reducing pollution by killing more of us as we pollute more which, in turn, means less pollution! It seems we are in perfect balance! We should all just throw our hands up in the air in resignation because there is no point in cleaning up the air.

This kind of lame thinking deserves to die a quick death!

 

[Tachyon]

Sexy

SEXCY

 

[Tachyon]

SEXCY

SEXCYR

 

[BenPrice]

The issue is that management is mostly compensated for meeting short term goals (earnings), and Wall Street also is mostly focused on short term (quarterly) numbers.

So even though governments have indicated that EV regulations will continue to get stricter throughout the next decade, OEMs are only incentivized to do the bare minimum and comply with regulations in the next 1, 2, maybe 3 years.

Wall Street cares more about the next quarter's profits and this year's numbers than what happens to the company in 5 to 10 years, and management has a similar attitude because their bonuses are based on the short term, and they may not even work for the same company anymore in 5 to 10 years, so who cares about what happens then?

In contrast and with respect I disagree.

The market pulls risk forward and the types of investment vary, however, the majority of long term share price movement investments are long term.

There are tax implications to consider.

Tesla is at advantage right now due to its capital raise.

None of that was day trading retail scum (haha, me), it was long term (absolute apocalyptic minimum 30 days but likely 12 months at smallest)

Tesla is rising because Q3 2019 showed viability, Q4 showed domination, Q1 is showing resilience, Y, municipal batteries, and cybertruck show growth, and competition can (there is no appropriate forum accepted word) - it rhymes with ruck right off.

We’re watching risk being pulled forward and it’s why the biggest hitters; Blackrock, GS are piling on. Q1 financials don’t exactly matter (as long as Tesla maintains its cost efficiency and growth trends).

We’re watching the ascension.

The business model is proven, even in the darkest timeline.

Edit: I’m sticking with model P for the little due but letting the kids name him in the coming days. I’ll prob call him model P forever despite, rofl.

 

[XHabjab]

The Model X has always been my favorite car, but this Cybertruck is really trying its hardest to win me over.

Then again, I don't have a driver's license, so it's not like I'm gonna actually buy one any time soon.

Unless... self-driving is here soon, Tesla expands to SEA, and most importantly TSLA stops being so damn attractive.

Wait a minute ... You live in Singapore. It is (almost) impossible to buy a Tesla vehicle there. You don't have a driver's license, and don't own a Tesla (?).
Yet you have written the arguably best financial articles about TSLA and have about 99th percentile knowledge about the company.
There's a significant story to be told there. What are some of the details?

 

[XHabjab]

Correct. Tesla Insurance is underwritten by the company (State National Insurance) giving the refunds. USAA is refunding 20% of those same two to my family as well.

AAA for us, 20% as well.

 

[abasile]

Now I feel I didn’t buy enough of the dip.

Ditto here! I was buying the dip in small tranches, expecting that the market malaise would take longer to resolve and possibly get worse. We could be in for another big dip, or not. Impossible to tell.

Unfortunately, the other side of the coin is that cleaner air leads to fewer deaths (and overpopulation),

I agree with Elon Musk that overpopulation is not really an issue in the long term (assuming adoption of sustainable energy etc.). Birthrates are continuing to plummet around the world. If anything, governments may end up having to do more to encourage people to have children, as the Russian government is already doing. The solar system has ample resources to sustain a large human population for quite a while. It's also worth mentioning that those who advocate for "population control" generally value their own lives and would not desire to die prematurely.

 

[MC3OZ]

Ditto here! I was buying the dip in small tranches, expecting that the market malaise would take longer to resolve and possibly get worse. We could be in for another big dip, or not. Impossible to tell.


I agree with Elon Musk that overpopulation is not really an issue in the long term (assuming adoption of sustainable energy etc.). Birthrates are continuing to plummet around the world. If anything, governments may end up having to do more to encourage people to have children, as the Russian government is already doing. The solar system has ample resources to sustain a large human population for quite a while. It's also worth mentioning that those who advocate for "population control" generally value their own lives and would not desire to die prematurely.

IMO the technology base determines the sustainable population, for example with the same population, there are different outcomes using Fossil Fuels, or using Renewable Energy and EVs...

I often find population is bought into the debate as a distraction from the key issue, sustainability.
What is 100% sustainable for a population of 1 Million, is usually 100% sustainable for a population of 1 Billion.

As we have no direct control on population at present, it is way more sensible to focus on sustainability....

The other consideration is that sun-light and many other sustainable resources are not supply constrained, being sustainable also ultimately means lower cost in more ways than one.

 

[ZeApelido]

Amazing, after Chanos mocked Elon on Twitter today, I mocked his short position, and now TSLAQ is putting me on their "list". I feel so proud!

 

[MC3OZ]

We can also see that sharing resources like Robo-taxis makes sense even though we are all typically private car owners used to owning our own cars... music and things like that moving from a physical medium to digital download, is another example.

So one limit of the worlds population is how much we are prepared to share things....

An event like COVID-19 will cause many to re-access what is important, many will conclude sustainable is more important...

When Tesla has working Robo-taxis that gives many running an old ICE car, perhaps who can't afford, or get an EV, an alternative option, that option is cheaper, more sustainable, does less environmental damage, and makes better use of the world's resources.. that combination will appeal to many..

 

[PeterJA]

The issue is that management is mostly compensated for meeting short term goals (earnings), and Wall Street also is mostly focused on short term (quarterly) numbers....

...We’re watching risk being pulled forward and it’s why the biggest hitters; Blackrock, GS are piling on [to TSLA]....

I think you're both right. Ford and GM made lots of noise about going electric, but don't plan to do it anytime soon.

Detroit's near future based on SUVs, not EVs, production plans show

They created a facade to try to entice the Blackrocks, but don't dare stop their dividends to invest the needed billions in conversion to electric. They must know they can't compete with Tesla, so they aren't really trying (as Porsche just declared) and must be hoping they're too big to fail. Because of Corona, we may find out soon if they're right.

Edit: The Porsche declaration is described here:
Tesla, TSLA & the Investment World: the 2019-2020 Investors' Roundtable

 

[brianhn1]

The car has been out a month, TSLAQ has been trying really hard to pick bones out of that “ugly egg”, but all what they can say is about ventilators.

I can't understand why Tesla donating mask and ventilators is even painted negative but if we look at GM/Ventec ventilator costs...I don't think gov't even got an at cost deal. Back in March... GM says it's already moving fast despite Trump's use of wartime act

Ventec, which is negotiating with the government to provide more ventilators, said it only changed numbers and prices at the request of government agencies, which asked for a range of quantities and prices. The company said it’s selling the ventilators...at distributor cost, and it has offered scaled down versions for a lower price.
...
Ventec isn’t sure if it will make any money on the devices, which generally sell for $18,000 — far less than ventilators used in hospital intensive care units that can cost $50,000. Johnson says GM has no intention of making a profit.

Selling a ventilator at distributor cost means there has to be a profit made. In 2019, a Ventec VOCSN ventilator has a distributor price of $14,500 (MSRP $26,050). It looks like they are selling at average cost of $16,333. ($490 million divided by 30,000 ventilators).

Ouch. I wished there wasn't so much politics involved, it scares Elon and co to push their own ventilator solution out sooner. And I bet it would be a lot cheaper..

I mean look at how much a Ventec power supply costs?!? Probably a $10-20 part sourced from China...

I'm sure Tesla and co could pump enough batteries and be way cheaper than $495.

So GM is looking good in the news by riding on the coattails of Ventec, but a few minutes search brings up some questions. Ventec just basically took a desperate deal with GM to mass produce Ventec's ventilators and now benefit by having a lifetime demand on after sales accessories (possibly overpriced). GM probably took their cut and made a nice chunk out of this to be hidden in their huge losses for Q2. Nevertheless, Tesla is not promising to build their own ventilator in large numbers because of the potentially damaging political and public backlash (unlike GM here). I don't like to dig negative news on two companies and gov't trying to bring ventilators to market in record time to save lives (but probably at excessive cost), but that's why you don't see this reported anywhere else (unless if it's Tesla doing it, it seems).

 

[Krugerrand]

Well, that's awfully generous and responsive of Tesla/Elon considering that most of those cars had their FUSC benefits expire many months before CV was even a thing.

People can be such complainers about the smallest of things! Eeeeew! My free Supercharging expired! Boo-hoo! Now I have to pay to use the company's Superchargers like everyone else! Boo-hoo!

Yes, mine disappeared with everyone else’s and should in fact been gone several months earlier. Then I saw the tweet, checked my APP, and just like that they were back with the May 31st expiry.

It is very generous of Elon/Tesla and I feel the same way about people who whine and complain (about anything).

 

[FrankSG]

In contrast and with respect I disagree.

The market pulls risk forward and the types of investment vary, however, the majority of long term share price movement investments are long term.

There are tax implications to consider.

Tesla is at advantage right now due to its capital raise.

None of that was day trading retail scum (haha, me), it was long term (absolute apocalyptic minimum 30 days but likely 12 months at smallest)

Tesla is rising because Q3 2019 showed viability, Q4 showed domination, Q1 is showing resilience, Y, municipal batteries, and cybertruck show growth, and competition can (there is no appropriate forum accepted word) - it rhymes with ruck right off.

We’re watching risk being pulled forward and it’s why the biggest hitters; Blackrock, GS are piling on. Q1 financials don’t exactly matter (as long as Tesla maintains its cost efficiency and growth trends).

We’re watching the ascension.

The business model is proven, even in the darkest timeline.

Edit: I’m sticking with model P for the little due but letting the kids name him in the coming days. I’ll prob call him model P forever despite, rofl.

I agree with most of that. Of course there are many long term investors. If 90% of investors decided to sell in and out of positions every quarter, the stock market would be much more volatile. Companies like Amazon and Netflix wouldn't be trading at the multiples they're trading at either, if no one looked at the long term.

However, I still think large parts of 'Wall Street' are too focussed on the short term. In the case of legacy OEMs, I don't think the market would've reacted well if a year ago Ford had said:

"We're canceling our dividend indefinitely, and for the next 5 years we expect profits to take a hit and cash flow to be severely reduced as we halt all investments in ICE technologies and start to heavily invest in EVs."

But perhaps that'd wouldn't be so much due to the market being too focussed on the short term, and more so due to the market being forcefully awoken to the fact that Ford is ill positioned for the future?

Maybe you're mostly right. I've been a TSLA investor for the past 5 years and perhaps that has instilled some bias into me, because in the case of TSLA the market and Wall Street analysts have been very focussed on short term financials and just didn't understand TSLA's long term potential.

 

[FrankSG]

Wait a minute ... You live in Singapore. It is (almost) impossible to buy a Tesla vehicle there. You don't have a driver's license, and don't own a Tesla (?).
Yet you have written the arguably best financial articles about TSLA and have about 99th percentile knowledge about the company.
There's a significant story to be told there. What are some of the details?

Technically I'm staying in Kuala Lumpur at the moment, but Singapore is where I want to settle down and live for the rest of my life. I've spent 12 months in Singapore before, and I'm trying to move there ASAP. I think I should be able to in the next 1-2 years.

I've applied for an MBA program, as well as a Bachelor's degree program as a back-up (dropped out of uni the 1st time ~9 years ago). I should hear the outcome in 2-3 months. Finding a job in Singapore to get a work visa could be another way to move there, but work visas aren't that easy in Singapore, so I'm trying the business school/uni route first.

I indeed don't have a driver's license. I grew up in The Netherlands where bicycles are the main form of transport. I did take some driving lessons at some point, but my instructor was the biggest idiot I've met in all my years on this planet. He kept yelling at me and telling me how to live my life, which is something I absolutely can't stand. I didn't really need a license anyway, so I just quit.

Since then, I've lived in London, Tokyo, Singapore, and Kuala Lumpur. The first three have amazing public transportation, and I love public transportation, so I've never needed a car. Kuala Lumpur's public transportation is rather bad, but taxis here are cheap, I live in the city center so I walk 99% of the time, and I'd rather buy more TSLA than a car anyway.

I have driven in Teslas a few times though. A month or so after I first invested in TSLA, I visited the Tesla Tokyo Aoyama store. I told them that I had no driver's license, but that I was a TSLA investor and a huge fan of Elon, and asked if I could get a test drive anyway. They made an appointment for me and said they would drive me around, but I ended up bringing a friend who drove. The friend said he would've bought a Model X on the spot if he hadn't just bought another SUV/CUV already I went a 2nd time with another friend, and also took my dad when I visited The Netherlands a few years ago. Every time I take a trip (most recently Taipei), I drool over and count all the Teslas I see And the first tourist attraction I go to in any new city is the local Tesla store

But yeah, at this point I don't expect I'll ever get a driver's license. I'm fine with public transportation and the occasional taxi, and soon self-driving will make a license even more useless to me.

And thanks for the kind comments about my blog posts and knowledge! <3

 

[CorneliusXX]

I’ll be disparaged, but I respect Left and Citron.

They’re highly effective.

I don’t like everything. But they’re highly effective.

None of this is or will ever be fair or straightforward.

Side note, help me sneak a Tesla inspired name for this little guy I just picked up today. Wifey was NOT okay with Model P.

R3X

 

[Words of HABIT]

Technically I'm staying in Kuala Lumpur at the moment, but Singapore is where I want to settle down and live for the rest of my life. I've spent 12 months in Singapore before, and I'm trying to move there ASAP. I think I should be able to in the next 1-2 years.

I've applied for an MBA program, as well as a Bachelor's degree program as a back-up (dropped out of uni the 1st time ~9 years ago). I should hear the outcome in 2-3 months. Finding a job in Singapore to get a work visa could be another way to move there, but work visas aren't that easy in Singapore, so I'm trying the business school/uni route first.

I indeed don't have a driver's license. I grew up in The Netherlands where bicycles are the main form of transport. I did take some driving lessons at some point, but my instructor was the biggest idiot I've met in all my years on this planet. He kept yelling at me and telling me how to live my life, which is something I absolutely can't stand. I didn't really need a license anyway, so I just quit.

Since then, I've lived in London, Tokyo, Singapore, and Kuala Lumpur. The first three have amazing public transportation, and I love public transportation, so I've never needed a car. Kuala Lumpur's public transportation is rather bad, but taxis here are cheap, I live in the city center so I walk 99% of the time, and I'd rather buy more TSLA than a car anyway.

I have driven in Teslas a few times though. A month or so after I first invested in TSLA, I visited the Tesla Tokyo Aoyama store. I told them that I had no driver's license, but that I was a TSLA investor and a huge fan of Elon, and asked if I could get a test drive anyway. They made an appointment for me and said they would drive me around, but I ended up bringing a friend who drove. The friend said he would've bought a Model X on the spot if he hadn't just bought another SUV/CUV already I went a 2nd time with another friend, and also took my dad when I visited The Netherlands a few years ago. Every time I take a trip (most recently Taipei), I drool over and count all the Teslas I see And the first tourist attraction I go to in any new city is the local Tesla store

But yeah, at this point I don't expect I'll ever get a driver's license. I'm fine with public transportation and the occasional taxi, and soon self-driving will make a license even more useless to me.

And thanks for the kind comments about my blog posts and knowledge! <3

@FrankSG, Kudos for you for recognizing the best fruit in the orchard without ever having tasted the fruit.