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

[Right_Said_Fred]

With SP below $187, SpaceX is now worth more than Tesla

Now we can have a race. First to 1 trillion.

 

[Carl Raymond]

The problem is everything thinks there's a demand issue.

This is an accurate sentence, I'm afraid. "Once Tesla scales up to _______ cars per month, then $$$$" is a thing a lot of us (and the market) have been anticipating and here we are hoping that 90k might bring the quarter to break even. I get the market's reaction and people wondering if it's even possible to make mass market electric cars profitably. Time is on our side though. Every day brings more interest, acceptance, and inevitability on the demand side and Tesla gets better at making the cars on the supply side.

Best to ignore deliveries, they blur the picture. Tesla produce as many 3s as they can and they all sell. That’s a given.

But Tesla did make a ‘mistake’ with model 3. They made it too good. People paying for the top of the range S and X expect the best specs.

Q3 and Q4 all focus was on the 3. 5000/wk took the company profitable, but only because S and X were still selling well. Come Q1, the Osborne effect kicked it, it’s winter, delivery challenges, new parts challenges. Back to loss. Ugh.

Tesla see the problem and rush to address it with Raven. (We know it was rushed because of the supplier lawsuit, where Tesla phoned through an old parts cancellation.) Flagship orders return, but it takes time to scale up once more. But the media is brutal. They now have ammo to attack the share price. They do so successfully.

We are in a hole, but there are two roads out. Scale up 3. Scale up raven S and X. Both roads are being taken.

Massive buying opportunity for anybody who accepts that the speed bump is in the rear view mirror, the accelerator is down.

Should Tesla have seen Ozzie coming? Perhaps. Did any of us? No, we were too excited about the 3 ramp. If you did see it coming and can point to a post made in 2018 supporting that, by all means be critical.

I bought at $184. I will buy more if the price falls. I will buy more if the price starts climbing.

 

[ZachF]

* they were also BMW owners, and understand people that areafraid to change. But Teslas are so much better, they kept saying "it's the future". They also told me: "Germans had a candle, and they improved it until it was perfect. But, at the end of the day, it's still a candle".

Succinct and true.

 

[LJS22]

Great visuals! Please somebody do this

Yea make sure to put a SpaceX rocket in the background too

 

[ZeApelido]

I wasn't sure at first, but every industry expert that doesn't work for a Tesla competitor and now Nissan agree with Tesla's approach.

Each Waymo car has 30k in Lidar equipment. That's an insane cost.

Um I don't think it's every expert. George Hotz and Anthony Lewandowski may agree with Tesla, but they are also biased in that it is also their approach.

We all know the Lidar used eventually will not cost 30k. It will be peanuts compared to the value added of L4/L5.

I'm not saying Lidar approach is going to win, I'm just saying no way it's near 100% probability that camera-based approach will win right now. Just be reasonable and talk as if its more like 50/50.

 

[sunny-value]

Or every time the price drops, fund managers see more relative value. The price is becoming more and more attractive every day.

The problem is that you an embedded implication that the company is near worthless in the short term - which i disagree with.

No, the intended imbedded impliccation is that in the short-term, the narrative of a potential restructuring story is dominating the imagination of fund managers. Narratives, not reality (and index/robot fund flows) dominate short-term price movements. If the reality is that value continues to build up, then a different set of fund managers might start to get interested. All the funds in Tesla currently are of the "growth" and "tech" name variety (or index funds). The ones who might pick it up as it heads down would have "value" in their name.

 

[TradingInvest]

You're making the mistake that shorties do by segregating the EV and ICE markets.

Rivian doesn't have to be better then Tesla necessarily, just close enough, but better than ICE.... Something that will be easier and easier to do as time goes on and EV tech get better and batteries get cheaper.

Study NIO, you might change mind. NIO's EVs are better than ICE vehicles, but Tesla will produce Model 3 and Y in China, which will be better than NIO's EVs and cost less. That's a big problem for NIO. It's difficult for them to price their cars. Buyers are not stupid.

Tesla's lead in EV technology and software is substantial. it's not going to be easy for others to catch up.

If the demand for EV pickup truck is half million a year, and Tesla can only supply 10% of the demand, then your argument would make sense to me.

 

[ZeApelido]

Do you have any concrete reasons to believe that? (Despite many thinking lidar is necessary) Do you watch the recent videos on autopilot on youtube? Progress is really impressive. I like for example the channel Tesla Driver.

I don't have to watch videos, I do believe progress is impressive.

The problem with FSD is that anecdotes do not mean data. If a camera only approach can reconstruct 99.99% of the scenes, that is still not going to be good enough! I have faith that Tesla can aggregate all the key data to ramp up camera-object identification accuracy as much as possible giving the data and deep RL methods, but how could I possibly be confident its going to get to a certain number of .99999 digits? I work in ML and I would be insane to be so confident in the eventual accuracy of my work.

You have to assume probabilistic outcomes. If the camera based approach is only 99.99% reliable, where does that leave Tesla in terms leveraging the technology? I am more optimistic it means people will pay some more money for L2 (maybe L3) that can handle more roads.

It will NOT allow robotaxis (outside of constrained environments). Thus the financial valuation changes.

I am not saying Tesla will not achieve L4/L5 with cameras. I am saying I would give it a 10% chance. The "expected value" of valuation (say $4000/share if successful) given that would still be much higher than the current stock price, so it is a rationale bet.

But enough with the crazy talk, you crazies

 

[Fred42]

I haven’t needed any repairs, so not sure how the process works (thank goodness). But, are they really pre-painting all body panels? Seems impractical given how they’re streamlining processes. But, if they really are, then definitely good for those needing repairs. Though some paint shops around me do better paint work than factory paint jobs.

The factory paint should match better with the rest of the car.

 

[LJS22]

Um I don't think it's every expert. George Hotz and Anthony Lewandowski may agree with Tesla, but they are also biased in that it is also their approach.

We all know the Lidar used eventually will not cost 30k. It will be peanuts compared to the value added of L4/L5.

I'm not saying Lidar approach is going to win, I'm just saying no way it's near 100% probability that camera-based approach will win right now. Just be reasonable and talk as if its more like 50/50.

Lex Friedman makes a good case for both but agrees with camera based approach for long term solutions in autonomy. I think the chip to camera processing will eventually be able to hold more unique situations that drivers come across Day to Day and improve far past the capabilities of LiDAR. I think the people who agree with Tesla in this approach view LiDAR as a great short term solution but ultimately will be limited. Once camera based approach surpasses LiDAR then it’s essentially a closed case. The question is does the technology pass it in 1,5,10, or 20 years. If you’re Elon the answer needs to be in the next 5 years and he’s betting by rate of improvement it will take place in the next 12-18 months.

 

[saniflash]

The factory paint should match better with the rest of the car.

the older the car, the more likely it is that the factory paint does not match with the color of the rest of the car, faded due to sunlight etc.

 

[Spacemanspliff]

Study NIO, you might change mind. NIO's EVs are better than ICE vehicles, but Tesla will produce Model 3 and Y in China, which will be better than NIO's EVs and cost less. That's a big problem for NIO. It's difficult for them to price their cars. Buyers are not stupid.

Tesla's lead in EV technology and software is substantial. it's not going to be easy for others to catch up.

If the demand for EV pickup truck is half million a year, and Tesla can only supply 10% of the demand, then your argument would make sense to me.

NIO also doesn't produce its own cars and is angled at segment Tesla hasnt captured and is not yet planning to capture*: Traditional looking SUV's and truck.

*Teslas truck plans are more Scifi looking than traditional

 

[mtndrew1]

What type of Model S? Raven or pre-Raven

Pre raven. One is a 75D, the other is “long range” with the old EPA rating. I don’t have a screen shot but I’m fairly confident there were more than 50 available within the last few weeks.

 

[sunny-value]

Some of us who might claim such encyclopedic knowledge of all those subject would be guilty of hubris or worse. Even the most capable and diligent human beings could not justifiably claim such knowledge.

That said, seriously diligent and capable people of normal intelligence are quite capable of making "...pretty accurate predictions..." in a fairly short term. Longer term there are too many variables for any human being to be "pretty accurate" except in an exceedingly narrow respect. Even the famously prescient people and most successful forecasters such as Leonardo da Vinci, Albert Einstein, Thomas Edison and Warren Buffet have had much less accuracy than would be needed to suggest anything other than huge success in some areas.

Honestly it seems almost impossible for anybody to think they know what will happen regarding BEV adoption in general, much less TSLA. All of us probably have deep conviction about what should happen if mankind can thrive. Deep conviction and highly convincing scientific evidence are obviously insufficient.

Personally, I spend most of my time assessing risks. Some people suggest I am quite good at that, and some invest according to my disclosed views. I have consistently been beating most securities market indices for quite a few years. Even so, I'll never suggest that my future results will reflect my past ones.
Thus, the last year has been my worst in two decades, partly because of my TSLA position, partly because of extraneous foreign exchange movements. Despite that I am adjusting very little, because I expect longer term positive results.

However, my own optimism is seriously constrained by my extreme pessimism regarding geopolitical disarray brought about by a quite small number of influential but incompetent government leaders in crucial parts of the world. The previous sentence is beyond my ability to judge, but the effects of that situation are far beyond anything I can conceive to predicting with even minimal accuracy. Therefore I expect to do well enough to survive financially, certainly avoiding personal catastrophe.

All of us investing in TSLA are quite exposed to the consequences of politically-controlled economic decisions. For my part I am quite convinced that Tesla is already making major decisions that will reduce these external negative consequences. GF-3, subsequent GF's and continuing innovation will serve us very well, I think. The primary constraint is certainly how long Tesla will need to decrease the present inordinate dependency on US sales and production.

Dealing with all the issues responsibly and competently still will not assure any reasonably accurate long term forecasts. Such will only reduce the consequences of errors.

Given that Norway and China were the only countries serious about EVs, wouldn't it have made sense to build the first factory in China and the second one in the US? As far as the BEV adoption curve, how much of a difference does 5 years (in the US) make to Tesla's future versus to companies like BYD (which are already in China and have been selling for years there in volume)? If the adoption curve is such that it takes 20 years to reach 50% of cars sold being non-ICE, what is Tesla worth versus others which may have caught up in 3 years (in terms of tech) and are already ahead (in terms of operational and logistical skills, and possibly in trust of leadership as well)? What other tech may be invented in those 20 years (such as HFCEL or alternative battery techs) that others invent but Tesla does not? What about if a cheap form of carbon capture is invented, delaying that eventual ramp further (until we actually run out of oil versus when we all begin to sizzle)? It was my inability to answer questions such as these, combined with losing trust in Musk during the $420 funding secured fiasco, that led me to sell and not look back. However, the probability I put on BEVs being part of the eventual solution is much higher than the probability of Tesla continuing to stay in the lead (it was theirs to lose, and operationally and logistically they seemed determined to lose that lead), so I did not entirely exit investing in the sector. I am still long lithium via one miner and long one EV maker which I acquired near its recent bottom.

Now you can know more than everyone else in the world about all the questions I asked and perhaps it would make your prediction abilities in terms of formulating probability distributions substantially better, but I don't think anyone really knows enough to squeeze that probability distribution particularly tightly, especially when it comes to which company or set of companies will dominate. 5+ years ago, I thought Tesla definitely had a chance of dominating, which is why I bought 1,000 shares at $25.xx (plus it wasn't a lot to me). However the prospect of losing much of the $350k +/- it became was another matter entirely given the new information that arrived in the interim (especially on management).

 

[Freder Reeve]

But I will tell you what affects demand. A friend of mine picked up his M3 a month ago and within a few days damaged his wheel on a curb. It has been sitting in the service center for three weeks with no ETA on when parts will arrive.

Why on earth are people bringing curbed wheels to tesla to deal with?
"This is utter nonsense."

 

[gene]

Why on earth are people bringing curbed wheels to tesla to deal with?
"This is utter nonsense."

Correct, there are many wheel repair facilities as well as a good supply of used Tesla wheels of all types on ebay and on this site for sale.

 

[Beltsbear]

GF3 only builds SR's for the China "region" (so not just China, but not the world either). EU, NA, etc will be supplied from Fremont still.

For now. GF3 should make high end cars for China as well. Huge advantages due to tariffs on the higher end models.

 

[RFernatt]

Correct, there are many wheel repair facilities as well as a good supply of used Tesla wheels of all types on ebay and on this site for sale.

Exactly. I had my curbed rim fixed at a Tesla approved body shop while it was having other work done. Leave the Tesla specific hardware stuff to the Service Center and take cosmetic stuff elsewhere, unless you need to buy a whole new wheel, that's a little different.

My 3 has been solid, but it has been the unluckiest car I've ever owned when it comes to things happening to it...

 

[capster]

Um I don't think it's every expert. George Hotz and Anthony Lewandowski may agree with Tesla, but they are also biased in that it is also their approach.

We all know the Lidar used eventually will not cost 30k. It will be peanuts compared to the value added of L4/L5.

I'm not saying Lidar approach is going to win, I'm just saying no way it's near 100% probability that camera-based approach will win right now. Just be reasonable and talk as if its more like 50/50.

Why? There are situations where the middle way is sound thinking, tech isn’t one usually.

Personally, I think it is near 100% that the camera approach wins and very nearly as likely that Tesla gets there first.

Lidar is to cameras in FSD as fuel cells are to batteries in cars: The former works better in engineering/corporate group think, the latter works better in the real world marketplace, IMHO.

It’s more effective to stick with use cases rather than bucketing the use cases into arbitrary levels. The levels lose information as they in themselves don’t map one-to-one to market applications. This leads to faulty analyses, faulty business cases, and compromised technology decisions.

 

[Menifeer]

Why on earth are people bringing curbed wheels to tesla to deal with?
"This is utter nonsense."

WTF? If I had a nearly new car that needed wheel repair, going to the dealer/manufacturer would be my first choice. I would expect Tesla to be able to replace the wheel in a few days. Until the parts supply system gets fixed, we're going to keep hearing about stories like this and they'll continue to give Tesla a black eye. This situation is fodder for the naysayers.