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

[MarcusMaximus]

Speaking as an ice-fisherman, I will say that on some larger lakes, the access point may be a paved boat launch, but by far most of the lakes I drive onto have pretty treacherous access points. They're typically a short, steep hill with badly rutted, bumpy tracks. The shore is a combination of roots, sand and rocks buried in snow. The way down onto the ice is a somewhat scary descent, but the way back off the ice is worse as you often have to take a run at it to ensure enough momentum to make it to the top of the hill. Then there's the navigating backwards downhill when you don't make it. I won't even get into what it's like in the spring when it starts melting along the shoreline...

The rough part of the access is usually quite short: 20-30 metres. However, for that stretch there's a tremendous amount of each wheel going up over rocks, roots and bumps in the snow/ice and dropping back down the other side, it's an incredibly bumpy ride, often with bangs from the underside of the vehicle. When I saw the photo I suspected immediately that the battery pack dropped hard onto a rock while getting onto the lake.

What's new to me is that I thought there was a titanium plate protecting the underside of the battery. It now sounds more like that simply protects the front underside of the battery but not the whole underside. That would offer adequate protection when hitting an object on a paved roadway because the object would hit the front edge and either be crushed or pushed aside, but not when off-roading and the vehicle is frequently dropping down onto rocks in the trail/streambed as the wheels go over uneven terrain. Is this correct?

Makes sense. No Tesla vehicles to date are designed to handle off-roading. I’m hopeful that the Y will at least partially address that.

 

[UncaNed]

You are not saying profit because of that $250k deposit, right. That is not a P&L figure.

P&L?

 

[MarcusMaximus]

I am disappointed in Elon for this:
Elon: “No I was playing a fool on Twitter!”

He chooses to use his twitter account as a mouthpiece to speak to the many of us investors, and for him to be sending out misinformation that way is ...well... disappointing.

Change my mind.

Misinformation? He changed his name to “Elon Tusk”. Exactly what information(mis- or otherwise) did you glean from that?!?!

 

[neroden]

Ihor Dusaniwsky on Twitter

"long shareholders selling is the overwhelming reason behind today's price dump."

I am curious who the "stupid longs" are going to turn out to be. Objectively, there's been non-stop good news lately. $35K model produced earlier than expected. Tesla is confident enough to cut prices. Musk is focused on the service issues. Delivery logistics in China and Europe are getting straightened out. The excess expenses from stores/salesmen are being eliminated. The Grohmann pack machine is up and operating (or will be very soon). Gigafactory Shanghai appears to be on schedule (!!!) and has extremely cheap loan financing (rumor 3.9%). This is absolutely the wrong time to sell the stock. So I wonder who's falling for the FUD? Institutions, individuals, who?

 

[Tslynk67]

I think it was me asking earlier as well. No answer thus far

I know, I was being a smart-ass, like Dan...

 

[dw4ngg]

What is everyone's thoughts on monetizing all the potential new owners with the price drop? I forgot what happens after my 1-yr LTE expires but that is an example of a monthly subscription svc I’d gladly pay for. Also, I’d pay for streaming video services like Netflix or espn etc. the screen could also utilize augmented reality. Anyhow, lots of things to monetize and create continuing revenue. Thoughts?

 

[MP3Mike]

What's new to me is that I thought there was a titanium plate protecting the underside of the battery. It now sounds more like that simply protects the front underside of the battery but not the whole underside. That would offer adequate protection when hitting an object on a paved roadway because the object would hit the front edge and either be crushed or pushed aside, but not when off-roading and the vehicle is frequently dropping down onto rocks in the trail/streambed as the wheels go over uneven terrain. Is this correct?

That is correct.

 

[jerry33]

What's new to me is that I thought there was a titanium plate protecting the underside of the battery. It now sounds more like that simply protects the front underside of the battery but not the whole underside. That would offer adequate protection when hitting an object on a paved roadway because the object would hit the front edge and either be crushed or pushed aside, but not when off-roading and the vehicle is frequently dropping down onto rocks in the trail/streambed as the wheels go over uneven terrain. Is this correct?

That's correct. The issue was the square battery front caused objects to dig into the pavement and push up through the 6mm aluminum tank armour. The titanium shield channels the objects to the side and prevents them from digging into the pavement. It won't do anything for a high centre strike.

 

[neroden]

This statement as the justification for the decision to close retail locations has me concerned. To increase sales beyond the existing early adopters it would seem that having MORE physical presence is needed not less. There are tons of people who will not buy a car online without talking to someone and seeing it in person first. To sell more cars they need to branch outside of the earlier adopters to regular people and physical locations are important for this outreach. My mother is one of these people. She's an older, conservative car buyer. She likes my Tesla and can afford it but there is not a single Tesla service center or retail store in her whole state and she won't buy one until there is.

Tesla still needs to expand service centers for geographical coverage. And I think maybe they're going to, after what Musk has said.

I don't think stores are necessary. Service centers are definitely necessary. I had to have two suspension repairs under warranty -- both obviously required a lift. (This is pothole city.) It must cost Tesla a fortune to truck my car 5 hours to the nearest service center and 5 hours back. It would be cheaper to have a service center within a couple of hours' drive.

 

[MarcusMaximus]

What is everyone's thoughts on monetizing all the potential new owners with the price drop? I forgot what happens after my 1-yr LTE expires but that is an example of a monthly subscription svc I’d gladly pay for. Also, I’d pay for streaming video services like Netflix or espn etc. the screen could also utilize augmented reality. Anyhow, lots of things to monetize and create continuing revenue. Thoughts?

Yep, that’s my thought exactly. Even with low(or even 0) margins on the $35k car, they’ll take your money on services.

Speaking of which, I wonder if “Tesla Music” is still in the works...

 

[neroden]

I called to order. Sales guy told me most are going for standard plus. Also 30-40 percent t are opting for autopilot.

Doesn't surprise me in the least; I'd go for standard plus!

 

[jerry33]

P&L?

Profit and Loss statement. aka Income statement

 

[KarenRei]

 

[dw4ngg]

Yep, that’s my thought exactly. Even with low(or even 0) margins on the $35k car, they’ll take your money on services.

Speaking of which, I wonder if “Tesla Music” is still in the works...

TBH this is why I really want an Apple partnership..... their capabilities and know-how mixed w/ Tesla's infrastructure is like a dream come true.

 

[StarFoxisDown!]

What is everyone's thoughts on monetizing all the potential new owners with the price drop? I forgot what happens after my 1-yr LTE expires but that is an example of a monthly subscription svc I’d gladly pay for. Also, I’d pay for streaming video services like Netflix or espn etc. the screen could also utilize augmented reality. Anyhow, lots of things to monetize and create continuing revenue. Thoughts?

To me, monetizing the Tesla screen won't start to really happen until FSD. Then I think you'll see things like Netflix and other streaming services. I'm sure Tesla doesn't want to be liable in situation like someone watching Netflix while on Autopilot. I'm sure there will be requirements that you have to have FSD running in order to watch Netflix or use apps while the car is in motion

Another big monetizing piece is that if someone wants to use their car in the Tesla Network service, they'll not only have to split the money with Tesla but they'll have to buy FSD(as well as Autopilot). That's a lot of revenue with super high margin!

 

[elasalle]

I am disappointed in Elon for this:
Elon: “No I was playing a fool on Twitter!”

He chooses to use his twitter account as a mouthpiece to speak to the many of us investors, and for him to be sending out misinformation that way is ...well... disappointing.

Change my mind.

One Man Advertising on 0$ budget ..

 

[neroden]

Luddite. Just kidding.



Yay for my guesstimates not sucking. The SR+ really seems like the sweet spot for folks that wanted SR, and the 40% haircut to base AP seems like a wise move to entice more buyers that may not have paid $5k. $3k of nearly full margin on a ton of orders is better than $5k of nearly full margin on half a ton of orders.

I'm guessing the ASP will be $40K-$45K. I think the most common variants will cost about $40K, and production cost will be about the same as for the $35K model. Therefore I predict a 13% gross margin on Model 3 for the next quarter. We'll see!

 

[dw4ngg]

To me, monetizing the Tesla screen won't start to really happen until FSD. Then I think you'll see things like Netflix and other streaming services. I'm sure Tesla doesn't want to be liable in situation like someone watching Netflix while on Autopilot. I'm sure there will be requirements that you have to have FSD running in order to watch Netflix or use apps while the car is in motion

Another big monetizing piece is that if someone wants to use their car in the Tesla Network service, they'll not only have to split the money with Tesla but they'll have to buy FSD(as well as Autopilot). That's a lot of revenue with super high margin!

I was thinking more for passengers or at least when parked or on camping trips/romance mode, etc. Separately, if they can get some good satellites in the sky w/ their own telecommunications svc, they could also provide hotspot to passengers.

Who doesn't want to do movie night in the Tesla overlooking the city or terrain, etc.??

 

[replicant]

The main reasons for people to visit a store are

1. see the actual car: not useful anymore now that Model 3s are being shipped everywhere
2. ask questions to sales advisors: increased EV education of the general public and the media, plus the fast growing driver base, makes it less useful too
3. request a test drive: but again, with all the Model 3 being delivered, anyone should be able to ask a friends/colleague to try their car

Closing the stores will certainly help with profitability, but it will also help the company launch their "shared customer fleet" (see Sharing in Master Plan, Part Deux).

Elon already announced this (source):

Musk's vision for the Tesla Network is for customers to be able to choose to either perform ride-hailing in their vehicle, like with Uber or Lyft, or simply rent out their cars to customers, similar to the crowdsource rental agency Turo and Maven. Musk doesn't mention Turo, but does compare the car rental in a similar capacity to Airbnb.

Opting in or out of the service will be easy for the customer, notes Musk. Customer vehicles or company-controlled fleets can be added or subtracted to the Tesla Network at will, meaning that it will likely be a setting on both the owner's app and the in-car infotainment screen. Telsa will charge a service fee while customers are generating revenue using the program; Musk spitballs this number to be around 30 percent to broker the rides on the Tesla Network service.

The service will also enable customers to fully rent out their vehicles as well. Again, a similar opt-in feature is expected and will join a fleet of vehicles owned by Tesla that will operate in the service when there aren't enough customer cars to get the job done.

What's needed to launch this "customer-owned vehicles" fleet? Very little, IMO:

• an update of the Tesla app (so non-owner can find and rent a car near them)
  
• an update of the car software (e.g lock things up, enable the interior camera too)
• a few legalities
• a fleet big enough to reach critical mass (see Network effect - Wikipedia).

For that last point, it's essential that the car becomes cheap enough for owners to not care if their vehicles is driven carelessly, and cheap enough for owners to want rent income and accept to do the checking/cleaning work.

Tesla could probably launch the service in California soon, as they will soon be enough Model 3 parked everywhere for anyone to find a car for renting.

How would that change Tesla's business:
- Tesla would get paid a % of each rental (doing nothing but insuring owners)
- competing with Uber and car renting company on cost (no need for Tesla to pay for cars or drivers, it's all done by customers)
- by selling a product that generates money for its owner, Tesla makes the Model 3 even more affordable, which increase demand, sales, the network effects, and the profitability of making the cars (virtuous cycle).

How could other automakers and ridesharing companies to compete with that?!

The earlier Tesla start the service, the bigger the moat...

hi Warren!

want some candy?

 

[PhaseWhite]

Tesla still needs to expand service centers for geographical coverage. And I think maybe they're going to, after what Musk has said.

I don't think stores are necessary. Service centers are definitely necessary. I had to have two suspension repairs under warranty -- both obviously required a lift. (This is pothole city.) It must cost Tesla a fortune to truck my car 5 hours to the nearest service center and 5 hours back. It would be cheaper to have a service center within a couple of hours' drive.

Agreed, Service Centers should be the #1 priority to increase addressable market. Hopefully they will still operate sales and test drives out of all service center locations. If through this move they are firing sales and support staff at the service centers then I would be doubly concerned. I don't think there's enough information yet to conclude everything included in the staff reduction is but part of my concern is that I've seen this move before by "smart" leadership to gut sales staff to reduce costs, only to have it reduce revenue/profit because the sales staff actually paid for themselves. (They were not cost centers, but profit centers)

Still holding my shares for the long term.