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

[Mars ☰mperor]

I did not expect the price to shoot up $25 last week - bought back in at a higher price...

I’ve started to think about it

Is there any chance Elon’s crazy antics e.g. tweets, reversals, etc are a way to distract everyone while the Model 3 takes hold of the market - getting the critics to focus on him and letting the product shine...

I don’t know but

He’s not being crazy anymore

Well...
Let Elon keep being the crazy one.
The people who are crazy enough to think they can change the world are the ones who do.

 

[AcesDealt]

If you knew anything about the car industry, you'd realize that volume is the only choice, financially. They still might raise prices as more people learn about the cars and demand expands further, to reduce backlogs.

I get the importance of scale. I’m all on board for apple buying Tesla and also ford or gm and putting together a powerhouse. Unfortunately apple appears to be run by morons.

But your answer doesn’t really explain anything to me because it doesn’t help to situate the exact price point. If volume is all that matters why not go even cheaper?

Let me be clear about the math. I think they might be making 2k$ per sr+ sale, so if they added 2k$ to the price they could sell half as much and be same off. My guess is they would sell more than half. Tesla is optimizing for volume over profit. The question is why.

 

[StealthP3D]

It is clear they are going for volume. The question is whether it is logical.

I thought that too at first. Further reflection made me realize tightening the belt and keeping prices as low as possible was the correct move. Tesla is not playing the short game here, that's for losers. I'm hoping to be pleasantly surprised at how effective the belt-tightening was.

My gut says there is some explosive upside in the next couple of weeks but the $300's might be quite a ways off.

 

[hobbes]

I don’t know for sure what Tesla means by undoing the wave, but my take would be delivering the roughly the same number of vehicles every month, even in China and Europe. Basically, just ignoring he quarterly boundary altogether.

To achieve this, just as many boats would be departing the west coast in the last month of the quarter as in the other two months. In Q1, very few boats departed during March. Also, just as many vehicles would be trucked to the east coast in the last 2 weeks as in any other week (which again they did not do in Q1).

IIRC @neroden did a calculation of how many in-transit would be required and it was definitely higher than the number of in-transit from Q1.

Reading this I just realized that "the wave" (delivery rate not constant across the duration of a quarter) does not only result from trying to deliver as many cars of those produced by the end of the quarter (emptying the pipeline). Also, from what I understan Tesla has to produce say European cars in batches (not at the same time as US cars) due to differences in the production, like different charge port.

I wonder if there is anything they can do about that? If they in fact have to do the batching as I assumed they will likely always have a wave at least for overseas regions.

 

[CorneliusXX]

I did not expect the price to shoot up $25 last week - bought back in at a higher price...

I’ve started to think about it

Is there any chance Elon’s crazy antics e.g. tweets, reversals, etc are a way to distract everyone while the Model 3 takes hold of the market - getting the critics to focus on him and letting the product shine...

I don’t know but

He’s not being crazy anymore

Elon Musk on Twitter

 

[AcesDealt]

Elon is tweeting a lot less these days. Is that good or bad according to the factchecking variety of counterfactual history.. nevermind I already know.

 

[CorneliusXX]

I get the importance of scale. I’m all on board for apple buying Tesla and also ford or gm and putting together a powerhouse. Unfortunately apple appears to be run by morons.

But your answer doesn’t really explain anything to me because it doesn’t help to situate the exact price point. If volume is all that matters why not go even cheaper?

Let me be clear about the math. I think they might be making 2k$ per sr+ sale, so if they added 2k$ to the price they could sell half as much and be same off. My guess is they would sell more than half. Tesla is optimizing for volume over profit. The question is why.

If they halved the volume, the fixed costs for each vehicle would double, variable costs would likely increase as there is a likely hit to manufacturing efficiency, suppliers would increase their prices as they lose economies of scale, etc, etc.

@neroden is correct, the economics works best at scale. In this case there is also the added benefit of achieving their mission statement. While it is impossible to know the perfect optimisation for short term profit, optimising for volume is likely improving profitability over the medium term as COGS drops faster than the sale price.

 

[BioSehnsucht]

I wondered what those little halls sticking out of the building were for, in this video I can finally see stairs in them. Guess they don't want to waste precious area in the main shell of the building on stairs!

 

[neroden]

I get the importance of scale. I’m all on board for apple buying Tesla and also ford or gm and putting together a powerhouse. Unfortunately apple appears to be run by morons.

But your answer doesn’t really explain anything to me because it doesn’t help to situate the exact price point. If volume is all that matters why not go even cheaper?

Let me be clear about the math. I think they might be making 2k$ per sr+ sale, so if they added 2k$ to the price they could sell half as much and be same off. My guess is they would sell more than half. Tesla is optimizing for volume over profit. The question is why.

OK, I'll explain this very slowly.

To optimize profit, you always want to run your production line at its full designed capacity rate. Anything else fails to leverage fixed costs, and most costs are fixed costs.

Does that explain it? Good.

 

[CorneliusXX]

I wondered what those little halls sticking out of the building were for, in this video I can finally see stairs in them. Guess they don't want to waste precious area in the main shell of the building on stairs!

I initially thought they might be lifts for parts so that a straight production line is not impeded by building utility functions, stairs also make sense.

 

[dqd88]

It’s rather important to keep in mind that accuracy in prediction is the fundamental measure of intelligence. You are keen to provide explanations of events after they have happened. Most people are looking for comfort in their decisions and if they are long in Tesla you are a great masseuse of reality. For those of us that actually care about anticipating how things play out ahead of time you are pretty disposable. Sorry, just isn’t your thing. You would make a good educator though.

These ad hominem attacks are getting old. It just makes you seem jealous and insecure, tbh.
FC has been an incredibly valuable source of, well, fact checking.
Yes, you’re smart, but your toxic tone is just going to get you on people’s ignore list.

 

[AcesDealt]

OK, I'll explain this very slowly.

To optimize profit, you always want to run your production line at its full designed capacity rate. Anything else fails to leverage fixed costs, and most costs are fixed costs.

Does that explain it? Good.

Most costs aren’t fixed costs.

I Dunno. Maybe a guy that sold puts against one of the worst performing stocks in the market ought to show a little more humility?

 

[dqd88]

It’s not just overseas markets. It is now law in BC (and Quebec I believe) that by 2040 all vehicles sold must be zero emission. Will this be a continuing trend in North America? Maybe. It certainly is in Europe already. Some cities are already no go zones for anything but zero emission vehicles.

Nice to hear some cities are doing this - do you know which ones?
It would not surprise me if this gets moving very soon on a local level in the states.

 

[Artful Dodger]

I wondered what those little halls sticking out of the building were for, in this video I can finally see stairs in them. Guess they don't want to waste precious area in the main shell of the building on stairs!

That doesn't explain why all those structures on one side of the building are at 90 degrees, while on the other side they are built at an oblique angle. Those structures also occude the shipping door opening that is in the interior of the triangle the structure forms with the outer wall of the main building.

My theory is that those are elevators for trailers, so that supplies can be delivered directly to the 2nd floor as needed w/o consuming interior space in the building. Typically genius engineering on Tesla's part. We'll know more when we start to see the direction of traffic on that side of the building. If the angle allows for faster docking of trailers and allows smoother traffic flow for logistics, I'll take that as a yes.

Cheers!

 

[mongo]

That doesn't explain why all those structures on one side of the building are at 90 degrees, while on the other side they are built at an oblique angle. Those structures also occude the shipping door opening that is in the interior of the triangle the structure forms with the outer wall of the main building.

My theory is that those are elevators for trailers, so that supplies can be delivered directly to the 2nd floor as needed w/o consuming interior space in the building. Typically genius engineering on Tesla's part. We'll know more when we start to see the direction of traffic on that side of the building. If the angle allows for faster docking of trailers and allows smoother traffic flow for logistics, I'll take that as a yes.

Cheers!

The loading dock platforms on that side of the building are also angled. The doors are no more occluded then they would be by a trailer
You can see the angled interface and stairs in the latest video.

 

[AcesDealt]

These ad hominem attacks are getting old. It just makes you seem jealous and insecure, tbh.
FC has been an incredibly valuable source of, well, fact checking.
Yes, you’re smart, but your toxic tone is just going to get you on people’s ignore list.

I have been a pretty disciplined stock buyer the last 3 years and I have managed to net an average basis of 240.. so I am down about 15% in an incredible bull market. What has factchecking been a valuable source of again? Should I have taken his ‘here are 10 reasons why what Elon just did is exactly right’ claims more literally?

Feel free to optimize whatever it is you are optimizing for. I am arguably no worse off if everyone ignores me.

 

[Tslynk67]

So Tesla could create a "Nickola" sub company for a rebadged 3 and Y and the $7,500 credit would kick back in? Surely they'd quickly change the requirements, even though Tesla is still the leading American BEV manufacturer by far.

Honestly, I think the tax credit is a terrible incentive anyway because you have to owe that amount of FIT in order to take full advantage. This has been the second year in a row I've owed and paid no FIT, so if I were going to buy a 3, the credit wouldn't even apply! With the SR+ models now coming out, it makes them far more available to folks that don't owe huge amounts of FIT, so I don't think the lower amount of credit come July will significantly affect sales or at least a portion of the credit won't be left on the table.

Indeed, it's an utterly stupid incentive as it's only fully available for the more affluent.

 

[heltok]

It’s been pretty silent the last week regarding autopilot. For example check timestamps at:
Andrej Karpathy (@karpathy) on Twitter
(Last time there was a 10day silence was right before the autonomy day)

My guess is that they want to put some deferred FSD revenue into Q2. For this they need to complete a delivery milestone, maybe deploying the new networks to EAP, and for this they need all hands on deck right now.

 

[Tslynk67]

Elon Musk on Twitter
View attachment 417601

That's an old Tweet from last week.

For those that don't know, it's a reference to a Monty Python sketch & song (well worth a listen!!)

 

[Tslynk67]

Pre-Market up again, seems to be a common trend recently.

And, look, for all the Rush fans here, a sign from the gods!