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

[Nocturnal]

Sorry to hear that. Did you get the license plate number? We need to be able to report all such incidents, especially if caught on video.

Even in this very progressive city of Austin, TX, I am amazed at how many ICE cars are on the road. I think price is still a huge factor, but not the only one. Just looking around in my neighborhood, I note the type of vehicles my neighbors have:

• His: huge pickup, with enormous front grill almost as tall as I am (as aerodynamic as a brick wall). Seems to be retired, not a trades-person. Hers: Large SUV.
  
• Professional couple: His BMW, Hers: luxury SUV
• Mini-type car of some sort. Goes 'Vroom-Vroom' on startup, very loud exhaust
• Fixer-uppers: Likes to work on cars. Seems to own about six of them.

For sure, this country is all about freedom to make personal choices. But even in this liberal town, people should be more mindful of the environment. Maybe the younger generation will save us.

Something around 80-90% of all pick ups are never used for towing or off-roading. Pick ups are cultural signifiers, that's all.

 

[M3Rider]

Sorry to hear that. Did you get the license plate number? We need to be able to report all such incidents, especially if caught on video.

Even in this very progressive city of Austin, TX, I am amazed at how many ICE cars are on the road. I think price is still a huge factor, but not the only one. Just looking around in my neighborhood, I note the type of vehicles my neighbors have:

• His: huge pickup, with enormous front grill almost as tall as I am (as aerodynamic as a brick wall). Seems to be retired, not a trades-person. Hers: Large SUV.
  
• Professional couple: His BMW, Hers: luxury SUV
• Mini-type car of some sort. Goes 'Vroom-Vroom' on startup, very loud exhaust
• Fixer-uppers: Likes to work on cars. Seems to own about six of them.

For sure, this country is all about freedom to make personal choices. But even in this liberal town, people should be more mindful of the environment. Maybe the younger generation will save us.

But the article also talks about costs. By 2024 even small EVs will be on cost parity with ICEs, so it actually will cost more to buy any ICE compared to a similar sized EV.

Add to that shrinking ICE sales with an average assembly line needing 80% load for profit.
OEM loses 20% of sales and they are in damage control mode, possibly raising prices or going bankrupt.

Gas station closures will not go unnoticed - they operate on break-even basis only making money from the store foot traffic of which there will be less and less. They might try to raise gas prices.

Oil demand weaker -> gas prices will fluctuate wildly as producers / refineries close down one by one. @neroden wrote a lot about this.

It will not be the same choice in 5 years as it is today.

 

[dmckinstry]

Well it took all week, but I managed to get $2500 transferred from checking accounts into my ROTH IRA.
I picked up 11 more shares at $219.705 for that account this a.m.

 

[NicoV]

Is Fastned profitable?

No. Last time I looked, their gross revenue wasn’t even sufficient to pay the interest on their loans.
But their revenue is growing exponentially, it remains a question if they will achieve critical mass before they run out of investors willing to fund capital raises.

 

[canoemore]

But the article also talks about costs. By 2024 even small EVs will be on cost parity with ICEs, so it actually will cost more to buy any ICE compared to a similar sized EV.

Add to that shrinking ICE sales with an average assembly line needing 80% load for profit.
OEM loses 20% of sales and they are in damage control mode, possibly raising prices or going bankrupt.

Gas station closures will not go unnoticed - they operate on break-even basis only making money from the store foot traffic of which there will be less and less. They might try to raise gas prices.

Oil demand weaker -> gas prices will fluctuate wildly as producers / refineries close down one by one. @neroden wrote a lot about this.

It will not be the same choice in 5 years as it is today.

Amen. Once the energy transition gets far enough along, there won't be much of a choice to keep using fossil fuels, at least at the current scale. In my opinion, people in general don't really like real choices anyways. They like the illusion of choice (e.g. the current ICE market or the potato chip aisle in the supermarket, where products are just minor variations on a theme), but balk at honest to God choices that involve real risk vs. reward. The goal shouldn't be to change people's minds. It should be to make sustainability the only choice available - either by making it by making it by far and away the best option, by removing unsustainable choices from the menu, or by doing both at the same time. Tesla and other energy transition market players seem to be focused on the "do both" option.

 

[NicoV]

Some usefull info from our local Zeebrugge reporter: ≡Waterlot Luc on Twitter

 

[ZachF]

You are forgetting the Osborne effect The Osborne Effect On The Auto Industry | CleanTechnica

It doesn't matter how many % of ICEs OEMs can produce if people don't want to buy them.
Per that article, 2024 can be a year when it becomes obvious nobody wants them and ICE sales go down to almost nothing in 2025.

Then EV sales share can be 90% (U.S.) with the majority of consumers waiting or buying a used ICE as a temp workaround.

You have to remember that during the steep part of the transition it could impact people who do want a new ICE and discourage them from it... how?

I think eventually when it is more obvious that ICE is becoming obsolete that steeper depreciation curves will be what forces away most buyers. Trade-ins will have less value, you wont be able to finance longer-term notes, you'll need more money up-front, and interest rates could be higher... All of these will increase the 'real' cost of a new ICE car.

This is also why I'm a believer in the scenario where ICE sales collapse before EV sales can fully come online to fill the gap.

 

[NicoV]

Some usefull info from our local Zeebrugge reporter: ≡Waterlot Luc on Twitter

Iif you like feedback on the Zeebrugger operations, follow that guy on Twitter, he regularly tweets about the Zeebrugge status (probably somebody who lives nearby).

 

[ZachF]

This is *possible* but I'm not sure the Osbourning can be *that* aggressive... down from 78 million to 30 million total? Doubt it.

It probably wont be that much, but I think the steepness of the decline is going to surprise many... 80 down to 50 million is possible, IMHO.

The depreciation rate of ICE cars is what going to cause sales to pretty much collapse, and most sales will probably be done at a huge loss below MSRP.

 

[ZachF]

But the article also talks about costs. By 2024 even small EVs will be on cost parity with ICEs, so it actually will cost more to buy any ICE compared to a similar sized EV.

Add to that shrinking ICE sales with an average assembly line needing 80% load for profit.
OEM loses 20% of sales and they are in damage control mode, possibly raising prices or going bankrupt.

Gas station closures will not go unnoticed - they operate on break-even basis only making money from the store foot traffic of which there will be less and less. They might try to raise gas prices.

Oil demand weaker -> gas prices will fluctuate wildly as producers / refineries close down one by one. @neroden wrote a lot about this.

It will not be the same choice in 5 years as it is today.

The biggest losers during this transition will be large ICE automobile exporters (Japan, Germany), and petro states.

 

[Joe F]

OT:

Happy Summer Solstice for the northern hemisphere at 11:54 AM ET!

I tried to balance an egg on end. Always wanted to try that. Sadly, it failed to balance.

With nearly 15 hours of daylight, it's a perfect time to hit the open road in a Tesla!

Having eggs for lunch.

 

[Drax7]

Stunning wrap

Bullish bearish or vegetarian?

 

[Wnuk]

I get the feeling this lady really wants to be driving a Tesla.

 

[Nocturnal]

You have to remember that during the steep part of the transition it could impact people who do want a new ICE and discourage them from it... how?

I think eventually when it is more obvious that ICE is becoming obsolete that steeper depreciation curves will be what forces away most buyers. Trade-ins will have less value, you wont be able to finance longer-term notes, you'll need more money up-front, and interest rates could be higher... All of these will increase the 'real' cost of a new ICE car.

This is also why I'm a believer in the scenario where ICE sales collapse before EV sales can fully come online to fill the gap.

Don't forget about availability of fuel. Gas stations scrape by on low margins as it is. It wouldn't take a very big drop in the number of gas cars out there to force a large number of them to close. Toss in some mild regulations like banning gas cars in urban cores and it starts to become a pain to "stick to your guns".

 

[Joe F]

I get the feeling this lady really wants to be driving a Tesla.

View attachment 421553

Could be she's a Tesla owner, and her car is in for service. Damn ICE loaners!

 

[ZachF]

Don't forget about availability of fuel. Gas stations scrape by on low margins as it is. It wouldn't take a very big drop in the number of gas cars out there to force a large number of them to close. Toss in some mild regulations like banning gas cars in urban cores and it starts to become a pain to "stick to your guns".

This is true, but I don't think either of those things will happen until well after EVs have effectively totally displaced ICE in terms of sales... Remember, if tomorrow all car sales were magically changed to EVs it would still take the better part of a decade for the majority of the fleet to become electric.

 

[neroden]

You have to remember that during the steep part of the transition it could impact people who do want a new ICE and discourage them from it... how?

I think eventually when it is more obvious that ICE is becoming obsolete that steeper depreciation curves will be what forces away most buyers. Trade-ins will have less value, you wont be able to finance longer-term notes, you'll need more money up-front, and interest rates could be higher... All of these will increase the 'real' cost of a new ICE car.

This is also why I'm a believer in the scenario where ICE sales collapse before EV sales can fully come online to fill the gap.

I can believe that, I just don't think it's going to be *that* severe. Maybe a drop from 78 million cars per year globally down to, say, 58 million, not to 30 million.

 

[UncaNed]

So, Consumer Reports is so independent they don't accept advertising, only direct bribes!

I have no proof that Audi nor anyone specific is hidden behind those various facades, but surely it would be easy for anti-Tesla industries to purchase influence.

CR, with it's promised neutrality, is of a pet peeve of mine because I really trusted it. Maybe it's my middle age grumpiness that I'm more aware of formerly trusted institutions like CR, Boy Scouts, MSNBC, Reuters, and others where we cannot ignore the man behind the curtain any longer.

 

[neroden]

Don't forget about availability of fuel. Gas stations scrape by on low margins as it is. It wouldn't take a very big drop in the number of gas cars out there to force a large number of them to close. Toss in some mild regulations like banning gas cars in urban cores and it starts to become a pain to "stick to your guns".

Unfortunately, given that the average age of cars on the road is over 11 years, I figure we have to get near "esssentially all new car sales are electric" before the drop in gas sales starts causing accelerated gas station closure. Gas stations are already closing at about 2% per year, of course, faster in areas where land is valuable and faster in "non-Interstate" locations. But I think we have to get to around 50% of new car sales electric before we see the 5% drop in gasoline sales which should be enough to accelerate the closures.

Used EV values are apparently already going up (it's a bull market!) and that will happen even more once the gas-station-closure tipping point happens. Used ICE values will drop even more, and the accerelated depreciation will drive people away from new ICE cars. The extremely cost-conscious will still be buying used ICE cars, however, where they remain legal (i.e. not urban cores -- in urban cores the cost-conscious use public transportation).

The drop in new ICE car sales should bankrupt the old-line legacy manufacturers, but unfortunately they have a tendency to keep operating, making, and selling cars in bankruptcy (even selling cars at a loss), so I don't think we'll see the bankruptcies cause the ICE car sales percentage to drop any faster than the usual curve. They'll keep sales up by selling at low, low prices until it can't be managed any more.

 

[EVNow]

It probably wont be that much, but I think the steepness of the decline is going to surprise many... 80 down to 50 million is possible, IMHO.

80M to 50M would bankrupt half the OEMs.