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

[Zaxxon]

having built a number of SaaS companies throughout my life I strongly disagree. The paradigm of recurring revenue is extremely powerful, similar to that of compounding interest.

Especially in the case where the base sale has already been made (the car) every $ earned through subscriptions is pure profit thanks to marginal cost of 0 assuming CAC of 0

Absolutely. Lots of people won't jump for $7k, but for, say, $100 for a week-long road trip? In.

But it’s not going to be 7k. It’s 7k today. Elon already said the price is going up again in June? July?

At what price does it become more than the average person will pay upfront? I think we’re already pretty close to that price now. .

We're definitely there now. $7k is > 10% of a fully-loaded 3. It's almost 20% on top of a base SR+. The trick is simply pricing the sub so as not to discourage up-front purchase for those who want it. But just to put a point on this, in my own case, I have FSD on my 3. . We do not have it on my wife's X. She would not use it nearly enough to make it worthwhile @ $7k. But when I'm driving, and especially when I'm on a road trip, I'd pay a reasonable fee to add it for the duration of the trip.

Another aspect of this is discouraging upgrading vehicles. In my own case, I've got a 2018 RWD 3, with FSD. Would I like to upgrade to an AWD or P? Sure. But I'm not willing to lose FSD, and I really don't want to raise the cost of upgrading by 35%-40% which is what having to re-buy FSD would do. (example: $50k AWD3 purchase price minus super-conservative $30k resale for my car = $20k upgrade cost. Toss out state tax credit and taxes as they roughly offset. $27k vs $20k is a 35% 'penalty' for me to keep FSD.)

A much harder sell since I don't 'need' AWD. Since Tesla removes FSD on cars they resell anyway (or they re-charge the new buyer for it), allowing either a subscription option, or a 'transfer on upgrade' option, seems like something they'd benefit from. And to go one step further--I really think allowing some form of transfer when a current owner buys a new Tesla would be a great loyalty thing. Other manufacturers just flat-out drop cash for loyalty purchases ($1k, $2k, or even more). Tesla could instead *charge* something reasonable, say $1k, to allow the FSD transfer. That's pure profit to them, and they can still sell FSD on the traded-in vehicle to the new buyer. Win for everyone.

 

[StealthP3D]

Headlines in media in the next couple of months about Tesla billionaire owner getting 2 billion in tax money from Texas (or anywhere else) would be really bad for Tesla. And that is how it would be presented in media.

Tesla appears to have weathered the last 4 years of intensely negative media coverage just fine. The people who are behind these negative stories have a two-fold purpose:

1) Attempt to create a negative public perception of Tesla.
2) Change the behavior of Tesla or governments in a manner that harms Tesla.

Tesla sells every car they make and incentives keep happening so I would say these efforts have largely failed and I attribute this largely due to the fact that Tesla has stoically soldiered on and resisted the temptation to fall under the spell of the naysayers.

While I'm reluctant to defend the current standard practice of granting tax incentives to entice companies to a specific region, I will say it's not as egregious as the direct funding that happens with stadiums designed for the benefit of billionaire sports franchise owners. In fact, there is a big difference. The first includes actual cash money owned by and collected from taxpayers while the latter is typically only tax breaks of tax money that wouldn't even exist if the factory located elsewhere. I think worrying about negative media coverage of the latter is just plain silly.

 

[Nocturnal]

Go home stock market, you're drunk.

Picked off a few of my leaps yesterday. Still holding a couple for after earnings but figured I'd bank some profit. I sold a June 1200 call last week. If it get's exercised I won't be too mad.

Headlines in media in the next couple of months about Tesla billionaire owner getting 2 billion in tax money from Texas (or anywhere else) would be really bad for Tesla. And that is how it would be presented in media.

The media is saturated with stories about companies getting tax money. IMO the headlines are more likely to be "Texas to receive influx of new jobs, helping poor job market"

 

[Green Pete]

Maybe I'm behind on this, but wasn't Q1 supposed to be a good quarter for solar roof sales? Is there not a good chance that installed roofs could make up for covid related car sales in Q1 and Q1 is great? I feel like we all frequently laud Tesla for all their products but now that those other products are going to start effecting the bottom line it's odd we aren't accounting for them

 

[phantasms]

Absolutely. Lots of people won't jump for $7k, but for, say, $100 for a week-long road trip? In.



We're definitely there now. $7k is > 10% of a fully-loaded 3. It's almost 20% on top of a base SR+. The trick is simply pricing the sub so as not to discourage up-front purchase for those who want it. But just to put a point on this, in my own case, I have FSD on my 3. . We do not have it on my wife's X. She would not use it nearly enough to make it worthwhile @ $7k. But when I'm driving, and especially when I'm on a road trip, I'd pay a reasonable fee to add it for the duration of the trip.

Another aspect of this is discouraging upgrading vehicles. In my own case, I've got a 2018 RWD 3, with FSD. Would I like to upgrade to an AWD or P? Sure. But I'm not willing to lose FSD, and I really don't want to raise the cost of upgrading by 35%-40% which is what having to re-buy FSD would do. (example: $50k AWD3 purchase price minus super-conservative $30k resale for my car = $20k upgrade cost. Toss out state tax credit and taxes as they roughly offset. $27k vs $20k is a 35% 'penalty' for me to keep FSD.)

A much harder sell since I don't 'need' AWD. Since Tesla removes FSD on cars they resell anyway (or they re-charge the new buyer for it), allowing either a subscription option, or a 'transfer on upgrade' option, seems like something they'd benefit from. And to go one step further--I really think allowing some form of transfer when a current owner buys a new Tesla would be a great loyalty thing. Other manufacturers just flat-out drop cash for loyalty purchases ($1k, $2k, or even more). Tesla could instead *charge* something reasonable, say $1k, to allow the FSD transfer. That's pure profit to them, and they can still sell FSD on the traded-in vehicle to the new buyer. Win for everyone.

This! I’ve got nearly 30k miles on our M3. I’d love FSD but I’m not sure how much longer I’d keep the car. If it could transfer I’d manipulate myself into buying before the price upgrade.

The Adobe reference earlier was interesting. Yeah I’d rather buy Adobe creative suite for life but not if it could be installed on one computer and when I upgraded the machine I’d have to repurchase. Give me the floppy drives [lolz] or give me the subscription.

I have faith that Tesla will make a change in the future.

 

[Nocturnal]

Maybe I'm behind on this, but wasn't Q1 supposed to be a good quarter for solar roof sales? Is there not a good chance that installed roofs could make up for covid related car sales in Q1 and Q1 is great? I feel like we all frequently laud Tesla for all their products but now that those other products are going to start effecting the bottom line it's odd we aren't accounting for them

Yes but we have no idea what "good" is because solar has been such a small contributor for so long. They hit 1k a week in production in march, but obviously that didn't happen in April. So maybe they produced 8k in Q1? Now idea how many of those were installed. A roof is equivalent to a model 3 though in cost so if they were all installed that could be a big boost.

 

[StealthP3D]

Maybe I'm behind on this, but wasn't Q1 supposed to be a good quarter for solar roof sales? Is there not a good chance that installed roofs could make up for covid related car sales in Q1 and Q1 is great? I feel like we all frequently laud Tesla for all their products but now that those other products are going to start effecting the bottom line it's odd we aren't accounting for them

I think after years of delay in the solar roof market people are discounting the prospects here. So an upside surprise is certainly possible.

 

[MP3Mike]

Absolutely. Lots of people won't jump for $7k, but for, say, $100 for a week-long road trip? In.

I hope any subscription comes with a minimum one year term.

Another aspect of this is discouraging upgrading vehicles. In my own case, I've got a 2018 RWD 3, with FSD. Would I like to upgrade to an AWD or P? Sure. But I'm not willing to lose FSD, and I really don't want to raise the cost of upgrading by 35%-40% which is what having to re-buy FSD would do. (example: $50k AWD3 purchase price minus super-conservative $30k resale for my car = $20k upgrade cost. Toss out state tax credit and taxes as they roughly offset. $27k vs $20k is a 35% 'penalty' for me to keep FSD.)

Why do people keep saying this like their FSD value just evaporates when they sell/trade-in their old car? When you trade-in your Model 3 you would get most of the FSD value back to apply towards your upgrade. Obviously if FSD has gone up in cost it won't cover 100% of the cost, but most of it should be covered. If your car is only worth $30k with FSD, then it must only be worth ~$25k without.

 

[ByeByeJohnny]

Tesla appears to have weathered the last 4 years of intensely negative media coverage just fine.

Well, since you don't even want to acknowledge that it's a different world, at least for the next year or so, I don't think we're gonna agree.

 

[Prunesquallor]

I haven't seen ANYBODY say (or imply) that everything should open in a week. Although I'm sure pockets of that kind of crazy people exist somewhere.

What I've seen people advocate for here is that low-risk economic activities (like manufacturing) start to ramp back up. Because the current status quo is not sustainable for the length of time that would be necessary if we were to wait for COVID-19 risk to completely go away.
...

Exactly. We’re starting up Friday with businesses limited to 25% occupancy for two weeks. Then, if everything is stable, 50%, etc. Turning up the gain with enough time for feedback seems logical to me. Staying totally locked down until? When? Seems like a good way to guarantee a healthy, broke state.

 

[dl003]

Well, since you don't even want to acknowledge that it's a different world, at least for the next year or so, I don't think we're gonna agree.

It's going to be a different world but I fail to see the same world that you do. I see a world where corporations get all kinds of help from the government so why is it so bad that Tesla also gets one to CREATE new jobs, not to KEEP existing ones?
Shareholders don't particularly care what the press says. We care about growth and financial incentives. Everybody hating on Tesla has already done so. Why do we cut off our nose to please them? The press will only stop talking smack about Tesla once it's no longer in their interest to do so. Incentives will help Tesla get to that place more quickly by growing quicker and becoming more profitable. Until then, Tesla can refuse all kinds of help and still be a big fraud.

 

[MTL_HABS1909]

I hope any subscription comes with a minimum one year term.



Why do people keep saying this like their FSD value just evaporates when they sell/trade-in their old car? When you trade-in your Model 3 you would get most of the FSD value back to apply towards your upgrade. Obviously if FSD has gone up in cost it won't cover 100% of the cost, but most of it should be covered. If your car is only worth $30k with FSD, then it must only be worth ~$25k without.

To me it makes a lot more sense for Tesla to tie the ownership of the FSD license to the owner and not the car. It provides an incentive for a Tesla owner to stay with Tesla for any new car they buy going forward as they’ve invested thousands of dollars that they would lose by switching brands (since its not tied to the value of the car). When Tesla then sells the used car, they can sell a license to the new owner (probably at a higher price if it’s gone up again), which will in turn incentivize them to stay with Tesla.

 

[Zaxxon]

Why do people keep saying this like their FSD value just evaporates when they sell/trade-in their old car? When you trade-in your Model 3 you would get most of the FSD value back to apply towards your upgrade. Obviously if FSD has gone up in cost it won't cover 100% of the cost, but most of it should be covered. If your car is only worth $30k with FSD, then it must only be worth ~$25k without.

FSD brings very little value at resale, especially to Tesla.

 

[dl003]

Allowing the owner to transfer FSD to the buyer or to a new car for a fee ($500 - couple grands) would be nice.

 

[MP3Mike]

To me it makes a lot more sense for Tesla to tie the ownership of the FSD license to the owner and not the car. It provides an incentive for a Tesla owner to stay with Tesla for any new car they buy going forward as they’ve invested thousands of dollars that they would lose by switching brands (since its not tied to the value of the car). When Tesla then sells the used car, they can sell a license to the new owner (probably at a higher price if it’s gone up again), which will in turn incentivize them to stay with Tesla.

The problem with that is that unless the license is linked to a particular human, and dies with them, the license will get transferred to next person and eventually the market will be saturated with licenses and Tesla will never sell another one; entirely cutting off a revenue stream.

 

[MP3Mike]

Allowing the owner to transfer FSD to the buyer or to a new car for a fee ($500 - couple grands) would be nice.

It already transfers to the buyer of the car, with no fee.

 

[MP3Mike]

FSD brings very little value at resale, especially to Tesla.

There is already an example of someone trading in Model 3s, that had purchased FSD, and they only lost ~$7k total from what they paid. So either FSD was properly valued, or Tesla didn't reduce the value for depreciation at all.

 

[ZsoZso]

Bulls are in charge.

855 on the way.

LETS GET READY TO RUUUUUUUUUUUMBLE!

(Power bull puppy feed my options)

Just put my equity at 800 to suck away these vampire dollars.

Rebuying at 801.

Pay the troll to cross the bridge.

Not so fast! We (bulls) have been warned that we are going to be very sorry very soon...
Why Tesla Stock Bulls Are About to Get Absolutely Wrecked

But Tesla stock bulls are about to bust their faces when this bubble pops.

ps: if you don't want to waste your time reading the hit-piece: it says Tesla is not a tech company, should be valued as any other car company and therefore it is fundamentally overpriced.

 

[MTL_HABS1909]

The problem with that is that unless the license is linked to a particular human, and dies with them, the license will get transferred to next person and eventually the market will be saturated with licenses and Tesla will never sell another one; entirely cutting of a revenue stream.

I don’t understand you’re point here. I’m saying the license belongs to an individual and to them alone, not tied to the car (i.e. cannot be sold or transferred to someone else).

 

[Zaxxon]

It already transfers to the buyer of the car, with no fee.

Not if you sell it to Tesla, it doesn't.

There is already an example of someone trading in Model 3s, that had purchased FSD, and they only lost ~$7k total from what they paid. So either FSD was properly valued, or Tesla didn't reduce the value for depreciation at all.

I mean, great? I've worked with Tesla directly and with others in the Denver area who have quoted out similar cars with and without FSD, so I know what i'm talking about. It is a fact that FSD does not add significant resale value when trading in, whether you toss a disagree or not.

On the private market, the situation could be different. But in the context of this discussion, which is incentivizing/disincentivizing owners to buy a newer Tesla, trading in carries a big pro in many states in that there's sales tax only on the difference. And therefore having to sell privately vs trading in is a big deal and would wipe out any benefit of a higher FSD resale value with a private sale since it'd come at the cost of sales tax savings.