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

[JusRelax]

i don't understand this argument. These same miles would still be driven, either by a robo Tesla or by a (most likely ICE) competitor. Total demand for taxi services is not a variable directly affected by whether or not Tesla enters that market. Switching taxis to electric power absolutely supports Tesla's mission of accelerating the transition to sustainable transport.

Arent we saying the same thing? I'm saying it's in Tesla's best interest to be getting every possible tesla onto the tesla network.

 

[Chocochip]

I prefer the model where the cars cost similar to what they do now in order to drive the widest transition away from ICE. Then have a higher price to upgrade to FSD like you suggest. If I was Tesla I would then charge a high subscription price to join the Tesla Network and take a more significant part of the revenue. This way you capture the robotaxi market but also continue to drive the wider transition from ICE. Assuming there aren't any future supply limitations allowing them to do both.

Tesla cannot limit itself to becoming a robotaxi manufacturer. The cars are highly desirable, and they're designed to be driven (looks, driving dynamics, driver visibility, etc.). On top of that, it would limit the total number of cars they can produce due to saturation -- I realise we're quite far from that point, but still... Also, in the meantime there will be multiple other companies to reach Level 5 who will also want to compete in the robotaxi market.

For these reasons, it would make the most sense to limit FSD to the Tesla Network, operated by Tesla on Tesla-owned cars (plus the probably very few owners who already purchased FSD and who really want to offer their own cars as taxis and get "rental" income), while selling future cars with only Level 4 autonomy (or selling Level 5 at a prohibitive price) OR not allowing owners to use them as autonomous taxis.

 

[Nocturnal]

I actually foresee that Tesla will somehow make FSD much more accessible for those with the hardware that have not purchased FSD, ala something like the following:

Allow these non-FSD enabled teslas to join the tesla network, but only get X% (much less than when you have already purchased FSD) of profit revenue from Tesla Network. FSD is only enabled when on the tesla network, but not during personal driving. The other Y% of what would normally be their profit margin goes towards a bank which accumulates to eventually pay for FSD for that car.

Good point, that's a possibility I hadn't considered.

i don't understand this argument. These same miles would still be driven, either by a robo Tesla or by a (most likely ICE) competitor. Total demand for taxi services is not a variable directly affected by whether or not Tesla enters that market. Switching taxis to electric power absolutely supports Tesla's mission of accelerating the transition to sustainable transport.

If robotaxis are ubiquitous it will certainly increase the demand for miles driven. People will be willing to go out more often, drive farther, take fewer busses etc. if robotaxis are easy to find and half the price of an Uber. Some will even skip buying cars altogether.

Everyone's mileage may vary, of course, but people are territorial and many want their own thing. I have friends that don't own their own cycles, never mind cars, they rent scooters, bikes and cars as-and-when they need them, but they're an exception, 95% people I know - and this is in a capital city with very good public transport and sharing services - want their own transport.

So yeah, will work for some, not for others, in any case, Elon's reasoning is nonsense at this juncture in time.

I'm not so certain. It's not just "my stuff" as a reason people like to own, it's often about convenience. Not relying on an Uber driver etc. If we can get past that point, where it's more convenience in the net to use a robotaxi, then many of those people will switch. Especially younger people. How many rent out their beds to strangers now? 20 years ago we would have laughed at that idea. ​

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[NateB]

I actually foresee that Tesla will somehow make FSD much more accessible for those with the hardware that have not purchased FSD, ala something like the following:

Allow these non-FSD enabled teslas to join the tesla network, but only get X% (much less than when you have already purchased FSD) of profit revenue from Tesla Network. FSD is only enabled when on the tesla network, but not during personal driving. The other Y% of what would normally be their profit margin goes towards a bank which accumulates to eventually pay for FSD for that car.

Interesting idea. It makes sense! For people who don't buy FSD before the price goes up, Tesla could let them put their car on the network for a ~30% cut instead of 70%. And if these owners want FSD for a single trip, they just ask Tesla network for their own car! Either way, Tesla can get some extra revenue from these cars and the owners can get some extra value.

 

[M3Rider]

For these reasons, it would make the most sense to limit FSD to the Tesla Network, operated by Tesla on Tesla-owned cars (plus the probably very few owners who already purchased FSD and who really want to offer their own cars as taxis and get "rental" income), while selling future cars with only Level 4 autonomy (or selling Level 5 at a prohibitive price) OR not allowing owners to use them as autonomous taxis.

Safety is big on Elons list of priorities. He will not prevent people from buying FSD. Maybe there can be different pricing for personal use and for use on TN. With an option to upgrade.

 

[StealthP3D]

Adam Jonas has found a new narrative (took him a week to come up with this one): record Q2 is pull-in from what would have normally been H2 sales:

“We update our TesIa earnings forecast following better than expected 2Q deliveries. At this stage, we have assumed the 2Q beat pulled forward demand from the remainder of the year, leaving our full year delivery forecast unchanged at 347k units. Reiterate EW and $230 PT.”

The problem with this analysis is it assumes sales are demand limited but all evidence says the sales are production limited. As soon as that is considered, his entire analysis becomes worthless. He provides zero evidence that sales are limited by demand, he just assumes this must be the case.

 

[lazybot]

While I believe Tesla probably will be the first to get to Level 5, rest of the industry will probably create hurdles along the way in terms of lobbying for regulations to slow down the roll out, allowing others to catch up. Also I do not think Tesla's current line up of vehicles is best suited for regular non-premium Taxi service with out any modifications. In my opinion the interior and exterior of vehicles meant for Taxi service should be able to hold up to the beating they will take from the extended and rough use from passengers compared to the limited and gentle use from an individual consumer that owns the vehicle. Tesla's current interior/exterior vehicle design based on aesthetics has to change to allow for more rugged design focussed on functionality for vehicles meant for robo taxi service, similar to interior/exterior for vehicles used in public transportation

 

[Tslynk67]

They twitted @Elon about SC sharing, he never saw it(he said he sees ~5% of tweets) - he said couple of times since that as far as he knows, nobody reached out about sharing SCs.

If sending a Tweet to Elon amounts to the most effort they've made to contact Tesla then god help them...

 

[neroden]

50% might be the society wide psychological threshold, but I think there's also a local threshold: distance to the nearest gas station.

When a gas station closes, it forces N locals to buy gas at a more inconvenient location.

Since buying an EV as your next car is much easier than buying a new home, I'm pretty sure the closure of gas stations is slowly but steadily pushing more and more people towards EVs - and that's not a psychological effect.

It's not a huge effect right now, but the closure of 3% of gas stations every year is an unstoppable force with only one possible outcome in 5-10 years.

Sometime in that time frame refilling gas will start to be increasingly associated with a negative social stigma of poverty and "I don't care about clean, healthy air" indifference. There might also be a phase when local communities start pushing out and banning gas stations - they are a constant safety and fire hazard even if you don't use it:

Already happening in the downtowns of the biggest cities, like Manhattan. Of course, those are the areas where people are most likely to decide they don't need a car *at all*.

You're right that the gas station closure effect will happen locally -- we should see accelerated EV adoption in particular locales where they're down to one gas station. (Something like Vancouver Island might happen early?)

 

[Fact Checking]

I would never list my personal house on Airbnb, nor would I with a daily car either on the TN.

I’m very unlikely to put my Tesla on the TN for the same reason as you, but I assure you there are plenty enough people who will.

Also note that you two are pretty much the exception: Tesla investors who are financially independent and don't "have to" rent out any of their personal possessions.

There are and will be a lot of people for whom a Tesla is not really affordable, but might become affordable if the car is on the Tesla Network.

If the financial choice is between "no Tesla at all" or "Tesla on the Tesla Network" then a lot of people will rent out their car to reliable guests - just like you already can limit your AirBNB listing to reliable guests.

 

[neroden]

Personal trading story alert.

Bleah. So Schwab has raised the margin requirement on Tesla to 75%, which substantially increased the margin requirements for my short puts -- beyond what is covered by margin capacity on the one other stock where I trust them not to raise the margin requirement. (And Schwab made another stock, the merger arb I'm waiting on, totally non-marginable simultaneously.) Out of caution, I decided to prepare myself for the (unlikely, but potentially disastrous) possibility of Schwab making Tesla non-marginable entirely, so I converted all my short puts into put spreads by buying deep-deep-in-the-money puts, thus substantially reducing the margin capacity required to carry (even in the case where TSLA becomes non-marginable) down to below what's covered by the one stock I trust to remain marginable (even if it drops by 10%). Unfortunately to cover the purchase of these insurance puts which will become worthless, I had to sell a little bit of my TSLA, about 3.6% of my position. :-( I tax-loss-harvested, which is some consolation. But it's better to be insured against a margin call, even if it was an expensive insurance; I don't want to risk being forced out of my positions. I wanted to maintain the short put positions (all LEAPS) because they will almost certainly still make a lot more profit than the insurance puts cost. If the merger arb cashes out I should be able to sell the insurance puts back and recover some of the cost; if TSLA is still down I may be able to restore my position, but I doubt I'll get that lucky.

BTW, when you see those large spikes in open interest in never-gonna-pay-off $50 and $100 puts? Those are probably held long by bulls who have sold puts at higher strikes, in order to defray their margin requirements by converting their positions into spreads.

 

[Fact Checking]

You're right that the gas station closure effect will happen locally -- we should see accelerated EV adoption in particular locales where they're down to one gas station. (Something like Vancouver Island might happen early?)

We might also start seeing a different trend: the purchase of property in scenic, remote communities that have adequate road connections and are livable and are not overly crime infested except for the lack of a nearby gas station, lack of reliable grid power and no good Internet connection.

With an EV, with off-grid power and a StarLink Internet connection many of these places are going to become very, very desirable for a broad range of professions and for families as well. If you can send your EV FSD car to a grocery store to pick up your shopping list without any human driver present that's a plus as well.

 

[neroden]

OT

Few insights:

• the dealer from whom I bought the car was unimpressed by the electric cars. Not that I expected otherwise, but I understood better that for them cars whould last at least 10 years, and be able to have 2, or maybe 3-4 owners. He was worried that a used electric car could have the huge problem of changing the battery down the road, making it a bad used car. Don't trust his judgment, but I understand better the mindset.

What I always tell people about this is "Yeah, the battery will probably die after 15 to 20 years, but the rest of the car will die first." The car's computer is going to die before then. Most used cars don't last 20 years.

 

[tschmidty]

Personal trading story alert.

Bleah. So Schwab has raised the margin requirement on Tesla to 75%, which substantially increased the margin requirements for my short puts -- beyond what is covered by margin capacity on the one other stock where I trust them not to raise the margin requirement. (And Schwab made another stock, the merger arb I'm waiting on, totally non-marginable simultaneously.) Out of caution, I decided to prepare myself for the (unlikely, but potentially disastrous) possibility of Schwab making Tesla non-marginable entirely, so I converted all my short puts into put spreads by buying deep-deep-in-the-money puts, thus substantially reducing the margin capacity required to carry (even in the case where TSLA becomes non-marginable) down to below what's covered by the one stock I trust to remain marginable (even if it drops by 10%). Unfortunately to cover the purchase of these insurance puts which will become worthless, I had to sell a little bit of my TSLA, about 3.6% of my position. :-( I tax-loss-harvested, which is some consolation. But it's better to be insured against a margin call, even if it was an expensive insurance; I don't want to risk being forced out of my positions. I wanted to maintain the short put positions (all LEAPS) because they will almost certainly still make a lot more profit than the insurance puts cost. If the merger arb cashes out I should be able to sell the insurance puts back and recover some of the cost; if TSLA is still down I may be able to restore my position, but I doubt I'll get that lucky.

BTW, when you see those large spikes in open interest in never-gonna-pay-off $50 and $100 puts? Those are probably held long by bulls who have sold puts at higher strikes, in order to defray their margin requirements by converting their positions into spreads.

What is this, an actual investor related post in this thread? C'mon buddy, this thread is only for Robotaxis discussion apparently...

 

[VValleyEV]

That assumes that Rivian will not experience their own version of production hell. They also will not have Model S and X sales to help with the cash flow needed to solve it.

I think Rivian’s R1T/R1S launch is more like S/X: relatively low volumes (20k-40k max for Y1) of high-priced, luxury vehicles at high margins. Biggest barrier to sales relative to Tesla may be charging network. The CCS DC charging network is still tiny and over-hyped (lots of stations are “capable” of fast DC but I believe still way slow now), but encouraging that Walmart is starting to add them in lots of locations. I think many R1T buyers will be comfortable charging mostly at home. In fact many are happy Tesla owners like myself.

Disclosure: I have a deposit on an R1T, will wait to see what Tesla reveals before locking it in. From what I have seen the R1T will be a much more capable off-reading vehicle (which matters in Northern AZ) and likely lots more luxurious than the Tesla pickup, but we shall see, it will be great fun to watch. I am really hoping for another successful BEV startup, IMHO only good news for Tesla owners and stockholders. Two companies that beat the odds and deliver vehicles starting with a clean slate, no conflict of interest with legacy oil, would be a good wake-up call to the industry and to the public.

 

[neroden]

Note that we might also see a different trend: the purchase of property in scenic, remote communities that have adequate road connections and are livable and are not overly crime infested except for the lack of a nearby gas station, lack of reliable grid power and no good Internet connection.

With an EV, with off-grid power and a StarLink Internet connection many of these places are going to become very, very desirable for a broad range of professions and for families as well.

Some will do this, but it won't be a trend, because it only works for people who can telecommute, and who don't mind having a lack of socializing opportunities. In general, desirable places are *places close to your workplace*. And a supermajority of people actively prefer city living simply because they have access to more people to socialize with. The 20% of people who prefer rural life *and* aren't tied to cities by their jobs may find rural life more viable, however.

 

[UncaNed]

.

I had my Model X at a local car show yesterday. Got a lot of complements but even some of those folks said they could never bring themselves to give up their gas cars. But several said that Tesla represented the future that all cars were headed to. Also got the impression that some folks may have found my Tesla offensive as several cars made a lot of obnoxious noise racing past on the street my car's space backed onto. Or maybe they always drive like idiots. The guy next to me who had a Grand Torino there kept telling me that my Tesla could blow past any of the ones showing off.

Perhaps we could we get South Park to make a coal roller version of their biker episode?

 

[Doggydogworld]

I guess I shouldn't really attempt to make sense of the seemingly random utterings of Adam "Is the FSD chip Terminator?" Jonas which opinion he, in an act of blatant professional malfeasance, is masking as "stock analyst opinion", but let's contrast his latest projections with known facts.

Here's the historic track record of Tesla's last 3 years of S+X vehicle deliveries (this way we can measure approximate seasonal patterns without the Model 3 ramp-up):

      2016/Q2 => 14,370
      2016/Q3 => 24,500 (+70%)

      2017/Q2 => 22,000
      2017/Q3 => 25,930 (+18%)

      2018/Q2 => 22,300
      2018/Q3 => 27,660 (+24%)

Even ignoring the Model 3 ramp-up, in every single year Tesla managed to deliver at least 18% more vehicles in Q3 than in Q2 - and this is a well-known seasonal pattern in the auto industry as well: Q3 and Q4 are generally stronger than Q1 and Q2.

Basically Adam "missed Q2 deliveries by 21%" Jonas's assumption is that:

• Tesla is going to both break their years old pattern and depart from the overall auto industry seasonal pattern, and they expect deliveries to fall due to a $1,850 tax incentive reduction that only a fraction of customers can take advantage of in one of their three major markets ...,
• he is assuming that the Raven refresh is not going to boost Q3 demand at all (barely any Raven deliveries in Europe or China so far),
• he is assuming that any post Raven refresh is not going to boost Q4 demand at all,
• he is ignoring that while overall demand for EVs continues to increase globally by double digit percentage points per year, Tesla's competitors are falling far short of even matching any of Tesla's models on price, range, charging speed, performance and production volume - let alone beat it,
  
• he is not crediting any growth in Model 3 deliveries to left-hand-drive countries such as the U.K. or Japan,
  
• he is also inexplicably ignoring any deliveries from the Shanghai Gigafactory, where vehicle production is guided to begin in September (Q3) already.

I also have the feeling that Jonas is preparing the "oh, Tesla built a whole Gigafactory, in Shanghai, in secret!!!" defense for why his Q3 and Q4 projections missed so badly? Although I think he'll have more luck with the insanity defense.

Or is Adam "asking worse than boneheaded questions on Tesla earnings calls" Jonas competing for the "Worst Analyst Prediction of 2019" prize perhaps?

So what's your Q3 delivery forecast? The "minimum" 18% uplift = 112k? Or something higher?

I think Jonas is too low again. He shaped his Q3/Q4 numbers to hold his full year forecast constant. That seems dumb, even for Jonas. I'll say 97k. Model 3 production should be up, but deliveries flattish. I'm not sure what to think about S/X, so I'll say flat there as well. High demand for Raven would push them above 100k, but I'm skeptical.

Jonas could be right if they finally unwind the wave, but LOL. I do expect more Q3 boats, however. Looks like we'll have the first this week.

 

[FreqFlyer]

The Tesla truck seems to have transitioned from a HD one ton truck to a F150 half ton competitor. Did Rivian have anything to do with this? I think so.

Which leads to the next question, BOF or unibody. BOF if using the Semi frame (way overbuilt). Unibody, then what platform? Model 3's? A new modular platform?

And if a new platform? What other product lines will originate with this truck's bones? Again, ala Rivian CUV.

 

[EVNow]

People don't rent out their house during the day while they are at work. They might with their car.

Sure. But I think most of the car-lords are going to buy just to rent out. Expect used Model 3 prices to shoot up, if and when FSD is real.