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

[Antares Nebula]

Tesla, Norway, and of course Madrugada (turn it up in your Tesla):

 

[Christine69420]

I have yet to hear one Tesla owner say "boy I wish I bought that iPace".

I know a Norwegian who did just that - and swapped the Tesla for a Jag. Thought the iPace looked really cool. So they exist. Some favour style and looks over function. And others just want to be different.

Man that quote about how there's an over saturation of Teslas in Cali and the minute someone drives a Taycan down the road, all these Tesla owners would be like "boy I need to get myself one of those!".

Not all. But a few might. Having a Tesla in Norway is not a way to stand out in a crowd. You need an iPace or e-Tron to do that. But soon they will be too common too. So then you need a Taycan.

For some people these things matter.

 

[CorneliusXX]

I really enjoyed watching this and I think the statements you mention still reflect the thinking of the vast majority of the legacy auto industry.

We see it in the recent comments of the BMW head of development that there is no demand for EVs — when the Model 3 is eating their lunch.

We see it in Daimler execs still trying to promote diesel despite repeated emissions cheating scandals.

We see it GM selling a grand total of ~8000 EVs in the first half of 2019.

The ICE dinosaurs are being dragged kicking and screaming into EVs because they can’t make money in the short run. We’ll see how they adapt.

It's crazy right. Tesla will be at 500k annual production rate by the middle of next year and 1m production rate within about 18 months after that. Just one company is going to suck up demand for a noticable proportion of the legacy OEMs profit making vehicles. How can they not see what is happening when EV production rates are doubling roughly every 18 months.

 

[CorneliusXX]

This is the single most compelling reason for Tesla to temper growth (just a small amount) and strive to include some baseline profits on an ongoing basis, while still growing at an enviable rate.

Other OEMs are NOT going to switch if they see that making only EVs isn't profitable, which is a common opinion in Autoline roundtables (not to mention in Detroit, Stuttgart, Tokyo and Yokohama). And ICEmakers WILL lose money during the switchover (hence the footdragging in ICE boardrooms).

But Telsa's mission is to ACCELERATE the transition. That means getting help making more EVs (and to convice the ICEmakers there's a better way). That means providing leadership on the business case: 'Yes, EVs are profitable once you've sunk in the investments required. Don't be afraid.'

My personal benchmark for leadership success is S&P 500 inclusion. IMHO, when TSLA achieves that, doubters can pound sand while they watch large swaths of institutions buying Tesla common stock. ICEmakers will switch. They'll be joiners, not disruptors. Their stogey old BoDs will like that.

Cheers!

P.S. This is not my newly held opinion. Indeed, it was my first post on joining TMC 11 months ago: (a topic which gets relitigated in this thread about once a month)

S&P500 listing and moderator actions (out of Market Action)

Part of me wonders what the impact on short interest will be with the S&P inclusion. My understanding is that these index funds all allow their shares to be lent for shorting. Supply of shares could increase dramatically.

 

[Tslynk67]

Went down the rabbit hole with Apple service phone system today. The Apple Store replaced the keyboard on my 2 year old Macbook Pro, a known problem with keys sticking. While they had my computer last week they decided they should replace the logic board, which I knew was extremely integrated but I said sure, even though it meant waiting another 3 days before getting my laptop back. I picked the Macbook up from the Apple store on Friday. Since they replaced the logic board they replaced the SSD, but not a problem since I had backed everything up, right? No problem if they put the same size SSD in that was in there when I dropped it off. Took me an hour or so to activate the new system and install the latest operating system and updates (they installed what was on it 2 years ago when I bought it, which I knew they would, but can't restore from backup to a deprecated OS level in Apple's Time Machine) and then it took 4 hours to restore from my backup, which I thought was a bit long. When it was done first thing I noticed is there was almost no free drive space. Turns out the logic board they ordered was one with a 1TB SSD on it. Mine had 2TB, at least when I brought it in. So first thing this morning I called and had to deal with their superior intelligent phone system. After 3 times of it connecting me to the main Apple Service instead of the store where they did the work, I finally screamed "I WANT TO SPEAK TO THE STORE MANAGER!". Apparently the phone intellect sensed I was angry and finally connected me to the store I kept calling. Sad it had to come to that but at least I got a live person in the place I needed to talk to. The folks at the Apple store were great, it was just getting to them. I'm getting a brand new Macbook Pro because of the screwup. Reminds me of the kind of treatment I use to get from Tesla when I was a guinea pig with my SIgnature X. Now it is impossible to get a live person on the phone with Tesla Service no matter how loud I scream. They weren't even keen on talking to me in the chat app until I made it clear I was pissed not being able to speak to a live person and their app only allowing me to choose service centers nowhere near me. Maybe they need to get some of those NN people to work on the logic for selecting service centers in the app. Or maybe just give people the chance to speak to a live person if all else fails.

I have a noise coming from the front suspension on my X, as I have road trips coming up, I'd like to get it checked. I had emailed Tesla service several time, no response, I resorted to phone instead. I was on hold for about 20 minutes before it was answered by Tesla Roadside Assistance (???). They told me that you couldn't call Brussels Service Centre anymore, or email. Instead you have to make an appointment - the first of which was in August, too late. He said to make it anyway and it would initiate the conversation.

Then I texted my usual service guy and he said it's best just to pass by when I want and likely they'll just have a look at it.

I love this company so much, but this is not at all a good way t operate.

 

[AndyH]

Another recent tweet on Summon:

"Parking lots are a remarkably hard problem. Doing an in-depth engineering review of Enhanced Summon later today."
Elon Musk on Twitter

Also, last week:

"Intersections with complex traffic lights & shopping mall parking lots are the two biggest software challenges. Developer branch already mostly works in these scenarios, but massive effort required to get to 99.9999% safety."
Elon Musk on Twitter

At first glance, Summon seems really easy. And it is, for simple uncrowded parking lots. But in a very busy parking lot, with many moving cars and pedestrians, where there are not even lanes or traffic lights, Summon is probably the hardest of all Self-Driving problems. Human drivers may rely on non-standard or subtle cues (for example, direct human to human communication), which are not possible in a car without a human driver (of course, Tesla can train its NN to recognize, for example, human hand gestures from other vehicles and pedestrians).

So this is going to be very interesting. What will Tesla do here? Looks like Summon is a much harder problem than initially thought. It could be quite a while till it is fully solved. Or does Tesla limit summon to non-busy parking lots (and how does Tesla determine this)? In short (IMO), be prepared for either a significant delay and/or significantly limited functionality on initial release.

Parking lots are the perfect proving ground for FSD with edge cases galore. There's insufficient or weird road markings, lots of non standard signs, people everywhere and cars driving on the wrong side of the road. All this at low speed so the risk of a fatal accident is minimal.

Evolution of enhanced summon should give good indications going forward of how close FSD is. At the moment it seems quite far away. Baby steps.

 

[Artful Dodger]

Alternatively, they could let the old guard sink and take over the world along side the BYD’s and Rivians.

Thanks for your response. Yeah, I up-voted your comment as 'Helpful'.

Let's do some quick math. Say Tesla produces 0.4M cars in 2019, and continues to grow production at 50%/yr. We need to displace every other car/truck/ice-burner on the roads, say 100M/yr total.

How many years does that take? Some quick maths says 14 years:

0.4M * 1.5^14 > 100M​

That's around 2033, which might be okay, but here's the problem: Say Tesla's CAGR drops to a paltry 40%/yr. Then it takes 17 years. Slow to 30% CAGR? Then its 21 Yrs.

Climate studies show we likely don't have 20+ yrs to achieve net-zero emissions in terrestrial transport (add 10 yrs to displace the ICE fleet).

Now, is it a safer bet that Tesla can achieve growth of 30% year after year without fail for 2 decades, or that ICEmakers could convert their production to EVs in that same time frame?

I don't know the answer. But I know if they see that Tesla isn't profitable, the ICEmakers won't even try to switch. And that inevitably risks national governments stepping in to artifically prolong the life of these failing ICEmakers, and their pollution continues.

It's a genuine dilemma, one that long-term investors need to reconcile as we struggle to chose the best path forward. IMO, the over-arching goal must be to choose the way forward that reduces fossil fuel use as fast as possible.

Someone once said "If you want to go fast, go alone. If you want to go far, go together." Society's shared problem now is that we need to go far, and fast! But some people don't think they need to change at all, or worse, they think it doesn't matter what they do.

As always, I say its best to lead by example. Let's show them a better way.

Cheers!
Lodger

 

[pyromatter]

 

[PeterJA]

This is the single most compelling reason for Tesla to temper growth (just a small amount) and strive to include some baseline profits on an ongoing basis, while still growing at an enviable rate.

Other OEMs are NOT going to switch if they see that making only EVs isn't profitable...

Why would a small amount of profit be any more attractive to auto-dinosaurs than no profit if they can't see the asteroid headed for them?

But Telsa's mission is to ACCELERATE the transition. That means getting help making more EVs...

Tesla doesn't need help. They can build a gigafactory in a year. They will build many gigafactories when they get the funds from robotaxi profits or from Wall Street as ARK predicts. Tesla is preparing to replace the dinosaurs caught in the Innovator's Dilemma, not lead them.

 

[PeterJA]

Let's do some quick math. Say Tesla produces 0.4M cars in 2019, and continues to grow production at 50%/yr.

I would not assume that, or slower growth. Remember what an S-curve looks like. I think when Tesla refines the machine-that-builds-the-machine and gets the funds, they will launch up the S-curve.

 

[bhtooefr]

@Artful Dodger It's also possible that Tesla's growth rate may well continue to accelerate, especially as competitors fail.

Of course, I'm not talking about the demand side - the demand S-curve is running ahead of the production S-curve. But, each competitor that fails unlocks their cell supply, and Tesla's able to get people to buy efficient cars that need fewer cells for the same range, whereas the competitors seem only to be able to make weirdmobiles that don't sell well, or very conventional vehicles with poor efficiency.

 

[Artful Dodger]

Is that a USB stick in Andy's left hand instead of Woody? So, Infinity and Graham's Number, hmm? Exponential growth hints? Or the results of the 'engineering review' of Advanced Summon? ie: keep yer Dash Cam running...

 

[mongo]

This is the single most compelling reason for Tesla to temper growth (just a small amount) and strive to include some baseline profits on an ongoing basis, while still growing at an enviable rate.

Other OEMs are NOT going to switch if they see that making only EVs isn't profitable, which is a common opinion in Autoline roundtables (not to mention in Detroit, Stuttgart, Tokyo and Yokohama). And ICEmakers WILL lose money during the switchover (hence the footdragging in ICE boardrooms).

But Telsa's mission is to ACCELERATE the transition. That means getting help making more EVs (and to convice the ICEmakers there's a better way). That means providing leadership on the business case: 'Yes, EVs are profitable once you've sunk in the investments required. Don't be afraid.'

My personal benchmark for leadership success is S&P 500 inclusion. IMHO, when TSLA achieves that, doubters can pound sand while they watch large swaths of institutions buying Tesla common stock. ICEmakers will switch. They'll be joiners, not disruptors. Their stogey old BoDs will like that.

Cheers!

P.S. This is not my newly held opinion. Indeed, it was my first post on joining TMC 11 months ago: (a topic which gets relitigated in this thread about once a month)

S&P500 listing and moderator actions (out of Market Action)

Thanks for your response. Yeah, I up-voted your comment as 'Helpful'.

Let's do some quick math. Say Tesla produces 0.4M cars in 2019, and continues to grow production at 50%/yr. We need to displace every other car/truck/ice-burner on the roads, say 100M/yr total.

How many years does that take? Some quick maths says 14 years:

0.4M * 1.5^14 > 100M​

That's around 2033, which might be okay, but here's the problem: Say Tesla's CAGR drops to a paltry 40%/yr. Then it takes 17 years. Slow to 30% CAGR? Then its 21 Yrs.

Climate studies show we likely don't have 20+ yrs to achieve net-zero emissions in terrestrial transport (add 10 yrs to displace the ICE fleet).

Now, is it a safer bet that Tesla can achieve growth of 30% year after year without fail for 2 decades, or that ICEmakers could convert their production to EVs in that same time frame?

I don't know the answer. But I know if they see that Tesla isn't profitable, the ICEmakers won't even try to switch. And that inevitably risks national governments stepping in to artifically prolong the life of these failing ICEmakers, and their pollution continues.

It's a genuine dilemma, one that long-term investors need to reconcile as we struggle to chose the best path forward. IMO, the over-arching goal must be to choose the way forward that reduces fossil fuel use as fast as possible.

Someone once said "If you want to go fast, go alone. If you want to go far, go together." Society's shared problem now is that we need to go far, and fast! But some people don't think they need to change at all, or worse, they think it doesn't matter what they do.

As always, I say its best to lead by example. Let's show them a better way.

Cheers!
Lodger

If only Tesla survives, then the transition is complete. As Tesla sales increase, they are taking the profit making sales away from other OEMs.
Terrible for the auto industry, but good for the environment.

April marked 6 months of declining Toyota sales, and others are not doing so well either.
Sales fall as SAAR dips to 16.41 million

 

[Artful Dodger]

Why would a small amount of profit be any more attractive to auto-dinosaurs than no profit if they can't see the asteroid headed for them?

Because the story is Tesla is dying because it isn't profitable. Making consistent profits makes Tesla viable long-term, wherein they eat the lunch of the big ICEmakers if they don't compete. Stockholders will abandon them like dying dogs.

Tesla doesn't need help. They can build a gigafactory in a year. They will build many gigafactories when they get the funds from robotaxi profits or from Wall Street as ARK predicts. Tesla is preparing to replace the dinosaurs caught in the Innovator's Dilemma, not lead them.

Telsa IS getting billions of dollars worth of help right now from the government of China, and none at all from Wall St. Without Chinese national support, GF3 would't get into production in 12 months with a police escort into their market.

Indeed, the $200/share haircut Dec-Jun was blamed on what amounts to a 10-day delay in Q1 deliveries. In fact it was EXPRESSLY connived to hold back Tesla in any way possible. Ask yourself why GF4/EU is so much slower to come about. Its not just the money, its the policy and permitting support too, which is delaying GF4 by years.

That's the difference between GF3/China and GF4/EU: Help vs. no help. Ironically, by the time GF3/Phase 3 is building the $25K Model 2, China may be exporting new Tesla sub-compacts to the EU.

 

[ggr]

Indeed, he has 2 dogs and a cat named Schrödinger. And of course a snail named Gary.

From the Boring Company opening, I believe he's up to Gary VI by now.

 

[Artful Dodger]

If only Tesla survives, then the transition is complete.

Obama wouldn't let GM die in 2009. What makes you think Trump (or any conceivable future US Administration) would let GM die in 2029? Or Toyota in 2027? Or Daimler in 2025? BMW in 2023?

My point is national governments will step in to prevent the failure of these large corporations, which will inevitably extend the long tail of fossil fuel use.

The alternative future is one where ICEmakers see Tesla making money while eating market share at rates they drool over. Those competitors WANT to switch to EVs, because they see it as the only way survive. Porsche/Audi/VW are probably in this bunch.

Cheers!

 

[Artful Dodger]

I would not assume that, or slower growth. Remember what an S-curve looks like.

My equation above is a strict exponential growth curve. An S-curve would in fact be slower to terminal production of 100M units/yr.

Maintaining any given exponential is EXTREMELY difficult/unlikely in the real world.

 

[MABMAB]

Is Tesla plant open and manufacturing any cars?
Where are those cars going?
The spreadsheet shows a number of orders without VINS: Teslike Model 3 Survey #4

Seriously, I feel for folks that waited years.
But, how can they say cars in about two weeks when they have orders approaching two weeks now without assigned VINs?

Can anyone explain?

 

[Unpilot]

@Artful Dodger It's also possible that Tesla's growth rate may well continue to accelerate, especially as competitors fail.

Of course, I'm not talking about the demand side - the demand S-curve is running ahead of the production S-curve. But, each competitor that fails unlocks their cell supply, and Tesla's able to get people to buy efficient cars that need fewer cells for the same range, whereas the competitors seem only to be able to make weirdmobiles that don't sell well, or very conventional vehicles with poor efficiency.

The way I see it is this was Tesla in it's early stages

But this is Tesla Now

 

[KarenRei]

Ask yourself why GF4/EU is so much slower to come about. Its not just the money, its the policy and permitting support too, which is delaying GF4 by years.

I nonetheless have the feeling that, in the end, some European country is going to make sure that Tesla gets the loans/incentives needed to make GF4 happen, and happen fast (by European standards, not by Chinese ones! ). For example, I kind of get the sense that Poland is trying to steal them from Germany, the latter of which seems too complacent. Tesla may prefer to build in Germany, but if Poland ponies up the cash? Witamy w Polsce!