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

[KarenRei]

Dear KarenRei...welcome back. Missed your contributions!

I swing by from time to time still

 

[Skryll]

People complain that these rebate programs are just a handout to the rich, but in fact it effectively lowers the cost of EVs for everyone since it causes the price of used EVs to fall by a comparable amount - especially over the coming years as the used market is flooded with EVs.

The FUD machine has succeeded in nerfing the rebate and HOV sticker program:

Used to be white stickers for fully zero emission, green for gas hybrids, got changed to both get red stickers so you can't tell them apart any more. On top of that white stickers expired without the right to reapply, kicking fully emission free vehicles older than 3 years old out of the HOV lane to make room for more gas hybrids.

The $2500 rebate you now get only when you are below bay area poverty line. As if to mock the situation they claim that the $60k household income limit would be 400% national household average income. For a california only incentive.

Whoever was working the lobby angle has been very successful.

 

[ZeApelido]

Honestly, the whole concept of stopping selling consumer cars or hugely jacking up the price when robotaxis comes out makes no sense regardless. The cars cost the same to produce, and continue to earn solid margins. It makes much more sense to simply scale up production to track rates of robotaxi approval, which will vary greatly between markets. If you're worried about self-competition with your robotaxi programme, you either use legal or technical restrictions to prevent consumer cars from competing. Capital for scaleup will be no barrier if you have a legit robotaxi business; the bond markets will throw money at you. And Tesla can apparently build whole Gigafactories in China in just a year, so...

Once there are clear signals that Level 5 / Robotaxi will be achieved, there will likely be a year or 2 delay before production can ramp up to provide enough cars to support both robotaxi and consumer car demand. In that time, robotaxi demand should be fed first.

 

[Artful Dodger]

That'll work.

 

[JusRelax]

Just needs to prove that they didn't throw away margins to achieve this, and that SG&A is under control relative to revenue. Deliveries was half the picture for this quarter. Let's get that other half in!

(I don't expect another jump to the upper $300s from just a good deliveries report, even if they were to eke out a surprise profit. Should take another couple consecutive profitable quarters for that. But a good enough Q2 report could have us seeing Sparta again soon. )

AP on all SR+ should raise ASP without increasing costs. Along with the $400 price increase, I'm hopeful margins will be decent.

 

[KarenRei]

Once there are clear signals that Level 5 / Robotaxi will be achieved, there will likely be a year or 2 delay before production can ramp up to provide enough cars to support both robotaxi and consumer car demand. In that time, robotaxi demand should be fed first.

Not when you can build entire gigafactories in a year. If they actually have a legitimate robotaxi business, everyone and their cousin will want to loan them money to scale up production. Additionally, consumer demand for robotaxi service won't materialize instantly in a given market (most people will start off quite spooked of them, if we're honest), and market approvals won't all occur simultaneously (they'll likely be spaced out over many years). And further, there will be a lag between when it becomes clear that a given market is likely to grant approval for robotaxi service, and when said approval is actually granted.

 

[printf42]

Honestly, the whole concept of stopping selling consumer cars or hugely jacking up the price when robotaxis comes out makes no sense regardless. The cars cost the same to produce, and continue to earn solid margins. It makes much more sense to simply scale up production to track rates of robotaxi approval, which will vary greatly between markets. If you're worried about self-competition with your robotaxi programme, you either use legal or technical restrictions to prevent consumer cars from competing. Capital for scaleup will be no barrier if you have a legit robotaxi business; the bond markets will throw money at you. And Tesla can apparently build whole Gigafactories in China in just a year, so...

I disagree, when FSD comes, Tesla cars will become production tools, not consumer goods anymore.
Price of production tools are dictated by how much value they can create, not how much it costs to make, or by simple supply demand balance.
See software pricing for reference. Also, FSD IS software after all.

 

[KarenRei]

AP on all SR+ should raise ASP without increasing costs. Along with the $400 price increase, I'm hopeful margins will be decent.

I agree. S/X seemingly took a hit due to the clearing out of discounted pre-Raven inventory this quarter (has there been any consensus here on whether the Q1 writedown partly compensated for this?), but SR+'s share of overseas sales was minimal (only started right at the end of the quarter), while the effective increase in M3 prices across the board via making EAP mandatory (along with making SR- off-menu) should be a nice margin bonus across the line. Canada's surge will have unfortunately corresponded with a significantly SR+ shifted sales mix, lowering their ASP, but overall I'm sanguine.

Then, of course, there's the every-bloody-quarter decrease in M3 production costs. I expect the rate of quarterly cost savings to steadily decline, but they should be hardly bottomed out this quarter. Just the increase in production rates alone spells out lower per-vehicle depreciation. And lastly, on the other side of the picture, there was a lot of delayed-impact cost cutting in Q1, rather reminiscent of the cost cutting in Q2 of last year that led to the spectacular Q3.

So yes, I'm quite looking forward to the Q2 letter

 

[dmckinstry]

FYI ~ all black interior. The interior has a couple of subdued changes which both my wife and I prefer. First the dash used to have a contrasting silver, wood and suede (sp) look. Now the silver look is mat black, still the same beautiful wood, and all smooth black leather. The falcon wing control in the back seat area is now a touch pad as opposed to a toggle switch.

Last night I checked and saw that the X no longer has black leather seats listed. I'm hoping that it's only temporary (for batching purposes?) as I would prefer back.

 

[KarenRei]

I disagree, when FSD comes, Tesla cars will become production tools, not consumer goods anymore.

Hammers are most widely used by the construction industry, but that doesn't stop hardware stores from selling them to consumers.

 

[mongo]

Hammers are most widely used by the construction industry, but that doesn't stop hardware stores from selling them to consumers.

Hardware stores do not sell FSD hammers

(or are these only Level 2?)

 

[KarenRei]

Hardware stores do not sell FSD hammers

(or are theses only Level 2?)

Amusing But a passenger car is a passenger car, regardless of who owns it. It's not like regular consumers buy passenger cars but robotaxis are the size of a Panamax cargo ship

 

[Curt Renz]

How Dealer Service Departments Are the Worst: An Example

And dealer organizations tell legislators they should restrict Tesla stores 'to protect consumers.'

Many years ago my then teenage brother worked part-time in the service department of a Dodge dealership. The service manager ordered my brother to wield a sledgehammer to make crooked a car's drive shaft. My brother refused and was immediately fired.

 

[Vad42]

I didn’t believe the full interior refresh rumors initially. Then even respectable Tesla reporters started to spread it as news, even with a target release date of September.

Why refute those rumors only now? I know for sure, people have been holding off purchases to wait for the interior refresh, and they might be disappointed now, even changing their mind on the car all-together.

I was honestly on the fence. My current lease ends at the end of August. I was debating getting Raven, or extending the lease 3-6 months and waiting for refresh. Given the "news" of no refresh, Guess what I did this morning? Ordered the LR Raven. Pretty much every part of this car is "refreshed" relative to my 2016 HW1 60D without premium package. I can't wait...

 

[printf42]

Amusing But a passenger car is a passenger car, regardless of who owns it. It's not like regular consumers buy passenger cars but robotaxis are the size of a Panamax cargo ship

You don’t buy golden-egg-laying chicken just to eat the meat, also you wouldn’t be able to buy them at the same price as ordinary chicken.
(Sorry for offending vegans, but this is the best analogy I can think of right now)

 

[MarcusMaximus]

Hammers are most widely used by the construction industry, but that doesn't stop hardware stores from selling them to consumers.

The problem is, once you have FSD/Tesla network one of two things happen:

1. Tesla keeps prices the same, scalpers and those wishing to run a small fleet of robotaxis rush in and buy up all the production, creating a multi-year waitlist. Consumers can only buy a car second hand, at grossly inflated prices.

2. Tesla increases the prices themselves.

If Tesla really does get this working fully, and nobody else has them, demand is going to spike like crazy. Assuming you can afford the upfront price, there’s no reason not to buy as many as possible. Each one is estimated to give a 200% ROI per year.

 

[X Fan]

Last night I checked and saw that the X no longer has black leather seats listed. I'm hoping that it's only temporary (for batching purposes?) as I would prefer back.

Did a query this afternoon...black, white and cream seats all available. Lol at the site though...says estimated delivery for long range as June.

 

[Nocturnal]

Gotta love wall st logic. NIO is up like 25% since Tesla released Q2 numbers

I can kinda see some logic there. If Tesla does well it validates that EVs are a growing market.

 

[EVDRVN]

Did a query this afternoon...black, white and cream seats all available. Lol at the site though...says estimated delivery for long range as June.

View attachment 427938

Typical Tesla competence.

 

[Nocturnal]

The problem is, once you have FSD/Tesla network one of two things happen:

1. Tesla keeps prices the same, scalpers and those wishing to run a small fleet of robotaxis rush in and buy up all the production, creating a multi-year waitlist. Consumers can only buy a car second hand, at grossly inflated prices.

2. Tesla increases the prices themselves.

If Tesla really does get this working fully, and nobody else has them, demand is going to spike like crazy. Assuming you can afford the upfront price, there’s no reason not to buy as many as possible. Each one is estimated to give a 200% ROI per year.

Yes, there is no other possible outcome if Robotaxis get going in advance of everyone else. As a shareholder I really hope Tesla wouldn't keep selling cars at a 10% margin when they could instead pull in 200% margins by using them as Robotaxis.

Once there are clear signals that Level 5 / Robotaxi will be achieved, there will likely be a year or 2 delay before production can ramp up to provide enough cars to support both robotaxi and consumer car demand. In that time, robotaxi demand should be fed first.

2 years? Demand couldn't possibly be met until other competitors are able to seriously enter the market. Hand Tesla a literal blank check, and it would still take them years to hit enough scale to come close to meeting the demand for electric robotaxis. ​