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

[ZachF]

OT, tariffs



Wrong. The importer loses when import tariffs are stupid.

If you are an importer and you manufacture lots of widgets, putting tariffs on imported widgets can be beneficial to your domestic widget industry. Fine. This is the sort of tariff which China and Mexico imposed on the US.

If you are an importer and you manufactuer NO widgets, putting tariffs on imported widgets just hurts you. THAT is the sort of idiot tariffs Trump has been implementing.

China will sell the US exactly the same amount of exported goods and US consumers will just pay more for them.

This is total nonsense. You're suggesting not only that there is zero price elasticity to all the things we import from China, but that they are also a monopoly producer with no alternative suppliers globally to what they produce.

You need to read up on previous trade wars. The surplus countries lose the most. Its very simple math. The US got hosed worse than any other during the great depression because of this.

 

[Maitri982]

Yes, but it's a super small team of a dozen designers or so, based at Tesla Design in Hawthorne. Keep in mind that they're not only in charge of all the MCU UIs but also the Tesla website, the app, etc.! The team size is maybe a 1/10 or 1/20 of what it actually should be, compared to FB, AAPL, GOOGL, MSFT …

From what I've heard, people are overworked, tired and fed up with the fact that they're reporting to either Franz or Elon – neither have much clue about UI design. The modus operandi is a toxic, top-down "We want to ship feature X so you better make it work SOMEHOW" approach.

Their poster boy, Andrew Kim, left in December '18 to work for Apple. He was in charge to revamp the Model S/X interface for the M3 and Semi.

It's a common myth among those who don't know anything about software development that just adding more people will solve your problems. Nothing could be further from the truth. In fact adding more people beyond a certain amount can greatly slow down development and create less good solutions. Small teams of 4-8 people work best in my experience...if they are all top notch. In fact there is an inverse relationship between number of coders and time-to-delivery/quality-of-code once you get above a certain threshold.

Another thing people don't understand is that one excellent coder is worth more than 5 OK ones. The excellent one will be able to do things that none of the other 5 coders could do...in fact things that maybe 500 OK ones couldn't do. And they will do it better and in a cleaner way so it runs fast and can be more easily maintained. The job as a manager is to find these people, treat them well and keep them. Also to challenge them else they get bored. But finding them is very very hard. I am sure tesla has some of these top notch people.

But these excellent coders are not designers usually. They are good at "designing" code, but not end user solutions. That's a different skill set and in fact is also very hard to do. Often the trick is doing very hard things but obscuring the complexity of that behind the scenes so the end user experience is clean and as-easy-as-possible. This can be very very hard to do given complex requirements. It's also the reason most software sucks...bad design.

As far as the "We want to ship feature X so you better make it work SOMEHOW" approach.". That's their job. Not sure what is at issue here. Management wants some feature and its the staff's job to design and implement it and to do it well. What else are they supposed to do?

Your posts here show what your real intent is and its not as a investor who is long the stock. That's fine, but stop being a wolf in sheep's clothes because you are not fooling anyone.

 

[ZachF]

OT, world economics



Oh, it's too late. China's the only world superpower now. The US has a precise sum total of zero leverage in trade negotiations with China; that was lost when Reagan decided to outsource production to China back in the 1980s.

Most people in the US haven't noticed, just like many people in Britain still seem to think they have an Empire.

This is total nonsense not born out by simple economic math. You're letting you hatred of the Donald get your confirmation bias out of hand.

 

[Dan Detweiler]

Fun fact: the writers of the Constitution chose the term “President” as the outcome of trying to think of a title that would bestow as little respect for the office as possible. It comes from the word “preside”, as in the President presides over the executive branch, and was decided to be sufficiently weak sounding.

They were all-consumed with trying to prevent having anything even approaching a king.

For the record, I share our Founders’ healthy distrust of the head of the executive and do not “respect” the office, any more than any other public employee office. This was as true under Obama as it is now.

Totally agree with your statement. My respect for the office comes from its role as the head of one of three equally powerful branches. Same as the Speaker of the House or Chief Justice.

Dan

 

[Krugerrand]

Like the Woody Allen quote says, “Confidence is what you have before you understand the problem.”

That can be true, but it doesn’t mean that confidence has to or does wane once the problem is understood, which is the underlying ‘message’ (that confidence goes for a crapper when the problem is understood).

I know this as a matter of fact in my own line of work, which has me constantly problem solving. And because problem solving is what I essentially do and have done for decades, I’m always confident I can find a solution for every problem whether I know what the real problem is or not - because I’ve literally never not been able to solve a problem. Like ever.

Sure, it’s possible that some day I’ll be presented with an unsolvable problem, but even if/when that day comes it won’t discount the 99.9999999999999999% of times I solved the problem. Nor will it affect my confidence.

Summed up; smart Alec quotes like the above are just that and don’t represent the whole picture.

 

[ZachF]

Summed up; smart Alec quotes like the above are just that and don’t represent the whole picture.

 

[Krugerrand]

Companies should always try to give conservative targets then over achieve them. In many cases, it's better to not mention them until you are done. Investors should keep expectations low, then be positively surprised. If a company gives high targets then can't achieve within the predicted timeframe, it's the supporters who suffer the most.

I feel Tesla has been doing the opposite for quite a while. I understand there are all sorts of reasons to set high expectations. In the end it's not worth it.

That is akin to telling someone to keep their standards low and expect the same low standards from everyone else, so they and everyone else never fail to meet them, then can act shocked and awed when those low standards are met.

 

[Krugerrand]

Many thanks for proving my point.

 

[ZachF]

Many thanks for proving my point.

 

[Doggydogworld]

Last quarter they got worked into a frenzy because Tesla had not given any guidance. This quarter there was clear guidance: 90.000-100.000 deliveries.

Q1 S/X guidance was very clear - "slightly less than Q1 2018" (21,815). So 21k, give or take a few hundred.

Model 3 guidance was fairly clear:

"Model 3 vehicles produced should increase sequentially in Q1."
"Model 3 production volumes in Fremont should gradually continue to grow throughout 2019 and reach a sustained rate of 7,000 units per week by the end of the year."
"deliveries will be lower than production by about 10,000 units due to vehicle transit times"​

This translates to 5500/week or ~70k production and 60k deliveries in the quarter. 81k total S/X/3 deliveries matches full year 360-400k guidance using a smooth 81/90/100/110k quarterly rate.

People here thought Tesla would blow guidance away based on the Bloomberg tracker, AlphaHat, Carsonnight, Vincent's photos of lines at Chinese DMVs and a bad Canadian sales report. Wall Street analysts and bears though Tesla would miss guidance badly based estimates channel checks (especially in China) and InsideEVs numbers. One side had good data, the other had bad data. Simple as that.

 

[lascavarian]

Is there anyone who truly thought ASPs weren't going to drop a lot as the pent up demand for higher trims was supplied?

I can take the position that this is an unknown and far from a safe assumption. Personally I spend 3x times what I had ever spent on a vehicle before and data was suggesting that there was a trend supported by trade-in brands that validated that people were lining up to buy up.

There are several reasons to support the logic of buying up to top trims.

For me, I did a study of the history of EVs within the evolution of combustion based engines starting with external combustion - steam. Progressing from there to ICE and fossil fuel development and the development of modern branding. There are patterns.

There was proof that Tesla had broken a trend line when they did not go bankrupt nearly immediately and that cast doubt on assumptions built on past trend lines. Who in 2002 for example, would have seen a a mobile phone priced at $1,000 or $800?

Rationally, a Model 3 (battery pack @ 300k to 500k miles of life) doing 15k miles a year will last pretty easily north of 25 years and if driven 12k per year up to 40+ yrs in some cases and even then it is only a battery swap that might be needed.

This realization rocks the purchase price rationale. Given fuel cost saving and reduced maintenance and extending the purchase years a bit, it is possible to rationally buy a MUCH more expensive vehicle and this is even before the safety profile and FSD are taken into consideration.

I understand the tendency to project that ASP will drop after early adopters are satisfied but it is hardly a given and I think there are forces that might suggest otherwise.

So I would say that there may be new trends developing that break from older patterns and we don't really know what that means to ASP.

Further, my head swims with the thought that a million mile battery which is in the wings where the life of the vehicle could be north of 50 years pretty easily. Could it be rational to make the vehicle the most valuable purchase in a marriage instead of a home that is high maintenance and can't be taken with you?

 

[Krugerrand]

Why not just go to a political forum to discuss politics? But, it's typical of the tolerant types to not give a d@mn about what anyone else thinks.

Um...a tolerant personality would tend to care what other people think.

 

[MABO]

Well, I’m seeing tons of reports now of Model S/X ordered in April with no delivery scheduled and no VIN. Odd thing to be making S/X that there’s no demand for and then not shipping them to the people that ordered one...

I'm one of those folks (I've seen several others just on this forum as well). We called Tesla this week. They thought we'd get a VIN in about 2 weeks and delivery a few days later. I'm guessing the production cutover isn't all that simple. But if the latency is half a quarter, or so, it's not that bad. I do think this will hit Q2 as another weak S/X quarter. That will be seen as a negative. But if there really is pent up demand, Q3 should be strong for S/X as they catch up to hard backlog.

 

[RFernatt]

Yep. All we have here are opinions on both sides and that's cool. Musk had confidence in 2015 with AP1 and then life happened. So, keep your timelines to yourself until you have fully understood and solved the problem to 98% (and the two percent isn't critical). Especially when the problem hasn't been solved by anyone to this point. I can be a fan and not be an apologist for the missteps. Demo the tech if you want (not sure I even agree with that), but don't put dates on it. It's not like most in the market are buying that line any longer. Until you can put up, shut up, especially when you've proven you can't forecast.

And that's my opinion, YMMV.

 

[Pezpunk]

Um...a tolerant personality would tend to care what other people think.

It’s a tired sarcastic dig at liberals, common from people who operate in a conservative fishbowl. Usually some form of “SO MUCH FOR THE TOLERANT LEFT!” Shouted by someone upset that their misogyny or racism was called out. Ironically, it’s ONLY sarcastic conservatives who talk about “tolerance”. Real progressives / liberals know tolerance is a red herring. There’s no good reason to be “tolerant” of bigotry or stupidity.

 

[Singuy]

This is total nonsense. You're suggesting not only that there is zero price elasticity to all the things we import from China, but that they are also a monopoly producer with no alternative suppliers globally to what they produce.

You need to read up on previous trade wars. The surplus countries lose the most. Its very simple math. The US got hosed worse than any other during the great depression because of this.

There really isn't. China HAS became the monopoly producer because their infrastructure for mass production is unmatched. If you ever kickstart anything, you'll realize everything being kickstarted are being produced in China because they can manufacture from your prototype to mass production in 5 months time. They can pretty much do this with high or low tech goods because the amount of skilled workers in China blows other low cost countries out of the water. People keep saying "oh they have moved production to other third world a long time ago". Yeah?. I challenge you to find goods(besides some clothing) that are made in other countries at your local mall. You'll find that over 90% of everything you find at the mall is from China. They have became the blood line of consumer goods and you can't just tell Indonesia "hey I need 50 million toilet scrubbers by next shipment".

 

[Dan Detweiler]

It’s a tired sarcastic dig at liberals, common from people who operate in a conservative fishbowl. Usually some form of “SO MUCH FOR THE TOLERANT LEFT!” Shouted by someone upset that their misogyny or racism was called out. Ironically, it’s ONLY sarcastic conservatives who talk about “tolerance”. Real progressives / liberals know tolerance is a red herring. There’s no good reason to be “tolerant” of bigotry or stupidity.

I gave this a "like" because it literally made me laugh and I like laughing.

So, just for kicks, who gets to define bigotry and stupidity?

Dan

 

[Anstandswauwau]

It's a common myth among those who don't know anything about software development that just adding more people will solve your problems.

1. I'm working in this industry, for what, 25 years now? Your attempt to school me on this very topic, is at best cute, at worst, offensive. So if you have any dignity, I wouldn't mind an apology.
   
   
2. I never actually said that, but thanks for putting words in my mouth.

Yes, it's a common misconception by outsiders that productivity increases linearly with the headcount, when, in fact, the opposite is true – as you correctly stated. BUT this is not the issue with the Tesla UI team, I can assure you, knowing people first hand that worked for and with them:

They are simply overworked und understaffed for the amount and scope of their work they have to deliver.

This is not general assembly where you can add a few hours of physical labour that you can sleep off the next day. Designers and engineers are productive for what, 4-6 hours net per day? Beyond that, they produce garbage and garbage only. Garbage that has to be fixed eventually. Letting them work 60h+ a week doesn't result in more amazing code or design, it results in more subpar work you can trash the other week.

Letting people work to a point where they fall asleep during mission-critical meetings – as I was told – is not a sign of great work ethics but rather of weak ass management.

There is no reason, no ****ing reason, why they shouldn't hire another 10-30 designers. There's a difference between being "spartanic" and "idiotic" and as things are right now, the Tesla UI team setup is clearly in the "idiotic" category – hence why design superstars like Andrew Kim are leaving.

As far as the "We want to ship feature X so you better make it work SOMEHOW" approach.". That's their job. Not sure what is at issue here. Management wants some feature and its the staff's job to design and implement it and to do it well. What else are they supposed to do?

Oh God, please tell me you're not in charge of … anything. This very thinking led to the demise of many, many enterprises during the dot.com-era. It's so outdated and obviously wrong, I'm actually dumbfounded.

But for starters: It's the "SOMEHOW" part that's the problem. UI- & UX-design is supposed to be holistically embedded in the very DNA of a company, bottom up – commanding "great design" top down simply won't cut it the long run. Now if your management orders to patch in feature X, Y, Z SOMEHOW it most likely will result in weak design decisions – and the name-giving "user" will notice.

See how properly design-driven companies like Google, Facebook and Apple are set up. They got it. You, obviously, don't.

Your posts here show what your real intent is and its not as a investor who is long the stock. That's fine, but stop being a wolf in sheep's clothes because you are not fooling anyone.

I've been super transparent in that regard, feel free to look it up. Thanks for the allegation, though!

 

[22522]

Yep. All we have here are opinions on both sides and that's cool. Musk had confidence in 2015 with AP1 and then life happened. So, keep your timelines to yourself until you have fully understood and solved the problem to 98% (and the two percent isn't critical). Especially when the problem hasn't been solved by anyone to this point. I can be a fan and not be an apologist for the missteps. Demo the tech if you want (not sure I even agree with that), but don't put dates on it. It's not like most in the market are buying that line any longer. Until you can put up, shut up, especially when you've proven you can't forecast.

And that's my opinion, YMMV.

The first two sentences were good.

Then, in a time competitive space, your suggestion will not work.

... JFK said, "Man on the moon in this decade."

Was that wrong to say?

...

 

[Krugerrand]

From 10,000 without a doubt, to always profitable, to never having to raise ,
To the opposite, undermines their projections.

Now Add Robotaxi and the appreciating car asset to that pile and it’s too much to ask.

Eventually they will restore their credibility , though it with take execution

It’s called fluidity. The Tesla pace is at a level of rapidity that very few can wrap their brains around it, yet alone believe and accept it. Case in point, you and many others here and pretty much the financial world at large.

NOTHING is (should be) static in the world, least of all Tesla. Get that into your head and you’ll stop being upset when Tesla/Elon changes direction.

The constant reevaluating at Tesla, pushing the limits, fearlessness to challenge anything and everything, to try and fail without remorse is such a stomach upsetting event to the status quo that they scream at the top of their lungs at every turn. And that constant screaming has sucked you into thinking that what Tesla/Elon is doing is bad, negative and just plain wrong, or you’ve always been a status quo person yourself.

What’s actually wrong is stagnation. What’s actually wrong is thinking that trying and failing is bad. What’s actually wrong it trying with all your might to shove a square peg into a round hole.

No matter how much they scream, no matter how much you complain or dream, Tesla/Elon are in fact going to do things their way. Always and forever. That is their nature. If your nature is the opposite, get out and save yourself the constant upset. You have less than zero chance of changing Tesla/Elon, resistance is futile, your wishes falling on deaf ears.

Even if momentarily perception of some changes that credibility has been restored through execution, I guarantee in the very next second that perception will be changed back by something Tesla\Elon does.