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

[sundaymorning]

TechCastDaily’s new podcast is a 2 hour long interview with Matt Joyce who was at the autonomy event. Pretty good wide ranging discussion.

Blubrry PowerPress Player

Interestingly, Matt said Elon told a small group of investors that Tesla would hit 10x the current market cap in 3-5 years.

Did Elon mean to say we were going to hit (negative) -10x the market cap? It would seem that the stock is headed in that direction as he predicted. Which explains why he keeps shooting shareholders in the foot with ill-timed emails.

 

[RobStark]

Pretty good article on two private teams doing slightly modified stock car racing in Model 3 and another in Model S.

Tesla Model 3, Model S find success in America's toughest street-car race - Roadshow

Another article in Quartz

Researchers have no idea when electric cars are going to take over

 

[TradingInvest]

I can't wait for the Semi to hit the roads. It will be a slow rollout initially as customers get their feet wet.

After that, if the Tesla Semi performs as advertised, orders should be through the roof.

Given Tesla's track record, there is every reason to believe it will perform as advertised if not better.

I could be wrong... I hope they delay Semi and pickup truck. Semi takes a lot of batteries, also margin won't be good in small scale. Maybe hand build a few dozen for self use, continue to refine it.

1. Focus on FSD. They need to put huge effort into FSD development. Money should not be a factor to cause delay.

2. Build Model Y when they are ready. Model Y will likely to have better margin than Model 3, also the cost to bring Y to the market is relatively small. If the total demand for Y and 3 is much higher than 3 alone (I assume that's the case), it will bring down both Model Y and Model 3's cost.

3. Take care of service and parts supply.

4. Actively communicate with owners, investors and general public. Word of mouth is great, but the internet is much more powerful. There are 3.2 billion internet users. Tesla should find ways to utilize it. Tesla's scale is approaching 30 billion dollars a year, trying hard to save a few dollars in this area is foolish.

 

[Reciprocity]

I will say that for all the faults of Electrek I trust them to report accurately more than I trust Reuters. I suspect Electrek is correct and Reuters is wrong.

EDIT: Now that CNBC has posted the full email, I find that both Electrek and Reuters were wrong. :sigh:

Musk listed the net proceeds of the capital raise (2.4 billion, after paying for all the hedges and fees) and stated that this would last about 10 months if they kept doing as badly as in Q1 ( -$700 million/quarter)... which is simple math. (It's actually 10.2 months.) It was clearly an attempt to give employees perspective on how much money it is.

Nobody serious believes that they're going to do as badly as in Q1, which had two tax credit hangovers (US and Netherlands), seasonality, a delayed Project Raven, delivery failures, and writedown of old cars (though this last will happen repeatedly). But the point made to employees is that they must do better -- they have to get back to +$XXX per quarter rather than -$XXX per quarter.

It seems like a perfectly reasonable way to motivate employees.

Certainly it's FUD that MSM is happy to push. I think Elon should be more careful with his internal emails. Maybe just have managers meet with employees and communicate the need to cut costs and the new procedures. Then again, Elon knows it's going to leak so maybe be wanted it out there.

 

[sundaymorning]

I have to admit, as somebody who might be considering buying a Model 3 late next year (when my current lease ends), I have been watching this thread with interest. I am hoping Tesla will address this one way or the other.

I've been going through PPF and other options in my head, but for me they'd be an additional expense on an already (to me) expensive purchase. I'm not really sure how relevant this is to the UK conditions, but it's certainly occupied a lot of my thinking time.

It sounds like a badge issue, some owners in Montreal, Canada reported that their vehicles are fine in cold/snow climate.

 

[wipster]

Price, and they don't need range.

Geez, how much difference between a Leaf and a 3 SR? Seriously seems to me someone isn't doing their homework or just believing the FUD. I was never a fan of Ronnie the Popular but always loved the quote "Trust, but verify." Don't think a whole lot of verification was goin' on (sorry Jerry Lee).

 

[Prunesquallor]

Yes yes yes, let's get the boring commercial market where Tesla's efficiency shines,

You know. It would be interesting if the Tesla Semi was the product that really revolutionized Tesla’a brand in the US. I mean, semis are serious iron and if potential customers are working with Tesla to optimize that vehicle, it could be massively successful. No one is going to talk sh*t about these beasts when that start hauling. And there won’t be any of that “fanboi” crap either. Semi customers are in it to win it. If the range, charge times, and cost of ownership works for them, who is going to argue?

 

[Artful Dodger]

Thinking that the FUD in the media will go away once Tesla starts advertising is delusional. Remember how people said that the FUD, sell ratings and lowered SP targets on Wall Street were caused by the fact that Tesla was refusing to raise more money (from which Wall Street could skim off 10%). Last month they raised $2,7 billion. How did that work out?

Same way it always works out. Like this:

 

[printf42]

FYI, this is going to be a warranty cost issue and may require some minor car redesign (replacing paint with plastic). Tesla again didn't do enough cold weather testing.

Model 3 paint wearing off

It’s actually pretty common for even economic cars to have PPF patches on certain areas, if Tesla decides they want to address this, they can do so too. It would add costs to the car, but not by much, mainly labor costs to apply it properly.
Or if they do it only before delivery in certain markets, its cost would be close to nothing.

 

[EinSV]

I could be wrong... I hope they delay Semi and pickup truck. Semi takes a lot of batteries, also margin won't be good in small scale. Maybe hand build a few dozen for self use, continue to refine it.

1. Focus on FSD. They need to put huge effort into FSD development. This is Tesla's future. It's unacceptable if this is delayed because they have to save money.

2. Build Model Y when they are ready. Model Y will likely to have better margin than Model 3, also the cost to bring Y to the market is relatively small. If the combined demand for Y and 3 is much higher than 3 alone (I assume that's the case), it will bring down both Model Y and Model 3's cost.

3. Take care of service and parts supply.

4. Actively communicate with owners, investors and general public. Word of mouth is great, but the internet is much more powerful. There are 3.2 billion internet users. Tesla should find ways to utilize it. Tesla's sales is approaching 30 billion dollars a year, trying hard to save a few dollars in this area is foolish.

i respectfully disagree. The nice thing about the initial Semi rollout is that it will be very small compared to the ultimate size of the program. Not a few dozen but low single digit thousands to fulfill their initial orders, hopefully ramping into the six figures 2 or 3 years later. (There might be an initial stage of a dozen or two prototypes maybe as early as later this year).

Because the Semi will replace so much diesel use, it will advance Tesla's mission as much as and maybe more than any other product in their roadmap. Long distance hauling is also an excellent FSD use case with compelling economics.

Jerome has said they are going into production next year and that sounds perfect to me.

I agree they need to also focus on FSD and Model Y, but those are likely separate teams - it's not an either or.

As far as your fourth item, I am not sure if you are suggesting they should spend money on advertising or some sort of media strategy instead of the Semi. If you are, I think that would be very unwise. IMO, they should continue to play the long game and make the smart investments for the future like the Semi -- which should be a clear category killer and very profitable. If the choice is to spend $ on advertising or working on development of the products in their roadmap, I'd put the money in products 10 times out of 10.

Tesla's disruptive, ludicrous growth -- faster than any other large company in the U.S. and probably the world-- has come from compelling products. With just the products in the pipeline and building out GF3 and GF4, they can easily maintain that outlier growth for years to come.

 

[Krugerrand]

I can echo @Webeevdrivers experience, my brother in law placed an order for a Leaf here in Quebec and it's months of waiting.

As an aside he did not even consider a Model 3 because "they have a two year wait list" and "they closed all their stores anyway".

In reality there is a Tesla service center/store not even a mile from where he lives. Throwing up my arms in the air.

Hey, at least he’s not your flesh and blood.

 

[Webeevdrivers]

Geez, how much difference between a Leaf and a 3 SR? Seriously seems to me someone isn't doing their homework or just believing the FUD. I was never a fan of Ronnie the Popular but always loved the quote "Trust, but verify." Don't think a whole lot of verification was goin' on (sorry Jerry Lee).

There is no real difference in range between a Leaf Eplus and a model SR. The model 3 feels however like it is a whole generation ahead. Also handles better, accelerates faster and looks better. (Then again I am partial to the look of a sedan). Price is comparable.

However some (my wife and I) May have practical reasons for buying something like the Eplus. Last week we ordered a Leaf Eplus SL with every bell and whistle after multiple test drives of various EV’s including four test drives in Tesla’s (two in a model 3). It doesn’t mean we didn’t love the Tesla and appreciate it for what it is. It just doesn’t do what we need it to do as good as the Leaf. It does some things remarkable better but overall it’s the wrong choice for us. I think some Tesla owners will now want to have us removed from this board but c’est la vie. We will continue to recommend any Tesla to any one who asks...just too many things that we would have missed by not getting the Eplus. Having said all of that we are probably an edge case in our needs.

Jmho.

 

[JohnDinger]

I could be wrong... I hope they delay Semi and pickup truck. Semi takes a lot of batteries, also margin won't be good in small scale. Maybe hand build a few dozen for self use, continue to refine it.

I agree. If Elon is as serious about aggressively cutting costs as his email tone suggests, then the Semi should go on hold.

In addition to the costs to get the lines going, the Semi also requires significant updates to the Supercharger network.

Truckers can drive a maximum of 11 hours before a required 10-hour break (in the US; EU is different but similar). Semi needs to be able to drive for at least 10 hours straight and recharge to 100% in 10 hours.

I'm not sure existing Superchargers can support this, especially if they take stalls away from Tesla drivers.

 

[JohnDinger]

It just doesn’t do what we need it to do as good as the Leaf. It does some things remarkable better but overall it’s the wrong choice for us.

Can you be more specific? What does the Eplus have that the Model 3 doesn't?

 

[wipster]

There is no real difference in range between a Leaf Eplus and a model SR. The model 3 feels however like it is a whole generation ahead. Also handles better, accelerates faster and looks better. (Then again I am partial to the look of a sedan). Price is comparable.

However some (my wife and I) May have practical reasons for buying something like the Eplus. Last week we ordered a Leaf Eplus SL with every bell and whistle after multiple test drives of various EV’s including four test drives in Tesla’s (two in a model 3). It doesn’t mean we didn’t love the Tesla and appreciate it for what it is. It just doesn’t do what we need it to do as good as the Leaf. It does some things remarkable better but overall it’s the wrong choice for us. I think some Tesla owners will now want to have us removed from this board but c’est la vie. We will continue to recommend any Tesla to any one who asks...just too many things that we would have missed by not getting the Eplus. Having said all of that we are probably an edge case in our needs.

Jmho.

I appreciate your choice, seriously. The difference being is that you did your homework, knew what you needed, and drove both (if not more) BEV's before making a decision. The brother in law described earlier appears to have done very little if any of that.

To quote Hudson and Landry, "I just couldn't live like that."

 

[Prunesquallor]

it’s mostly clickbait for traffic and ad rev, period.
it’s faster, frankly easier, to make a hit piece while the buzz is negative- than it is roll up your sleeves and do, like, you know, research...

in the time it would take a ‘journalist’ to do that in order to write a story or series about what tesla is actually doing...they could write 4-5 pieces that are going to get more web traffic. theres no incentive for that in this current model.

At some point this becomes (I’m serious) Pulitzer Prize stuff. Lisa Falkenberg of the Houston Chronicle won the Pulitzer for Commentary by exposing the corrupt Harris County Grand Jury selection process. There are a lot of parallels: supposedly trustworthy institutions (independent media, regulated stock market, state free enterprise) being corrupted to the detriment of citizens.

 

[jerry33]

It’s actually pretty common for even economic cars to have PPF patches on certain areas, if Tesla decides they want to address this, they can do so too. It would add costs to the car, but not by much, mainly labor costs to apply it properly.
Or if they do it only before delivery in certain markets, its cost would be close to nothing.

They did try it. It didn't work out well.

 

[ruralectric]

You say this as if there is a demand problem. Perhaps Tesla is actually production constrained. As far as I can tell the FUD isn’t having a huge impact. My sphere of friends and acquaintances doesn’t seem to be affected by it that much. Not enough to find buying and owning a Tesla to be undesirable.

I have no idea what the current demand is for Tesla vehicles and my guess is neither does anyone else since we don't have visibility into the number of pre-orders on the books. My post had nothing to do with demand, except to the extent that if Tesla doesn't get more proactive on the PR front today, then it could very well affect demand tomorrow.

There have been many unforced errors, I don't need to list them, and they suggest that the only PR strategy that Tesla has is pretty much determined by whatever Elon happens to be randomly tweeting about (like joking about the sex in an X vid), or by the contents of leaked e-mail.
There is nothing proactive or strategic about leaked internal memos with hyperbole that can be twisted by the media (including TMC, see Report: Musk Orders Company to Cut Costs - Tesla Motors Club "Tesla Chief Executive Officer Elon Musk told employees on Thursday that the company will run out of cash in 10 months if it can’t cut costs."). This kind of stuff has a cumulative negative affect on the brand, and is completely unnecessary.

 

[Right_Said_Fred]

From this point on no more discussion in the investor thread about paint and patches.

Mod

 

[jerry33]

I agree. If Elon is as serious about aggressively cutting costs as his email tone suggests, then the Semi should go on hold.

In addition to the costs to get the lines going, the Semi also requires significant updates to the Supercharger network.

Truckers can drive a maximum of 11 hours before a required 10-hour break (in the US; EU is different but similar). Semi needs to be able to drive for at least 10 hours straight and recharge to 100% in 10 hours.

I'm not sure existing Superchargers can support this, especially if they take stalls away from Tesla drivers.

The initial Semi purchasers will be short haul, not long haul. It will take some time before long haul catches on for a variety of reasons, including they will need their own SC network.