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

[Webeevdrivers]

I consider this a given - there are people now buying 3s who would have instead bought a Y. Lots.

But what I also consider a given is that the global EV market keeps growing massively every year, expanding the total 3+Y market even if Tesla's share of it remains constant. In this regard, I see the Y ramp as simply Tesla's way to handle increased overall growth, while simultaneously increasing the diversity of its offerings.

I also note that Tesla is far from having completed a global expansion.

But there is probably also some pent up demand for the model Y. People like us who literally chose another brand this time around as the model 3 just didn’t quite fit the needs. A model Y will check a lot of boxes the model 3 can’t. I would think there are a few years of North American pent up demand vice more like a year or so for the model 3. I’m not sure what the strategy will be but the need to export probably won’t come as soon as it did with the model 3.

Jmho.

 

[j6Lpi429@3j]

On the contrary TSLAQ most certainly reads these forums.

I doubt that, if they could read...would they still be tslaq?

 

[SPadival]

Baillie Gifford US
Annual Financial Report

Whilst all three of these technology-led evolutions are currently at a nascent stage, the first - the shift from petrol to EVs - is most advanced. It sounds strange to say it now, but it was not so long ago that electric cars were undesirable. Tesla has, pretty much single-handedly, made electric cars cool. EVs are fast, safe, clean and increasingly affordable. Whilst true plug-in EVs still represent a small proportion of annual car sales in the US and globally, the trends are indicative of a major shift underway. In the US, EVs made up just over 2% of new car sales in 2018 representing an almost doubling of market share year over year. In California, arguably a leading indicator for the adoption of new technologies, EVs comprised almost 8% of new vehicle sales last year. The astonishing fact that the Tesla Model 3 was the best-selling car in the US by revenue based on the last four quarters, coming in ahead of the Toyota Camry, perhaps marks a major milestone on the coming transformation of the car industry and the end of our reliance on a major finite resource.

 

[ggr]

(Not that it matters much, but the average quarter is 13 weeks long, not 12 weeks long.)

More importantly, I don't think the early $42k ASP estimate at 500k/year production is valid anymore.

True but most quarters they shut down production for a week. Either for holidays or to update the lines.

 

[anthonyj]

Wow really low volume and no one posting today. Interesting

 

[KarenRei]

Wow really low volume and no one posting today. Interesting

What to do, throw our hands up in the air and grumble "... frickin' trade war..." under our breath?

 

[Dan Detweiler]

I consider this a given - there are people now buying 3s who would have instead bought a Y. Lots.

But what I also consider a given is that the global EV market keeps growing massively every year, expanding the total 3+Y market even if Tesla's share of it remains constant. In this regard, I see the Y ramp as simply Tesla's way to handle increased overall growth, while simultaneously increasing the diversity of its offerings.

I also note that Tesla is far from having completed a global expansion.

Another angle to this train of thought...

I think there will be a big upswing in used Model 3s on the market when the Y comes out as well. There are probably a lot of people that have been enjoying their Model 3 for the last year or two that will trade it in on a Model Y as it better suits their needs. Mine will likely be one of them. If I could lock in pricing (car and options) by putting in a reservation I would do it today. Unfortunately that is not the case so I don't see any real advantage to doing so.

I will be busy loving my Model 3 until the Y is released and then, more than likely, pull the trigger at that time.

Dan

 

[LN1_Casey]

Wow really low volume and no one posting today. Interesting

Er.... I wish I had more dry powder to buy more stocks?

But yes, this is a very, very low volume day.

 

[willow_hiller]

Wow really low volume and no one posting today. Interesting

If I don't look at my positions, they can't be red, right?

 

[Chocochip]

What to do, throw our hands up in the air and grumble "... frickin' trade war..." under our breath?

You mean, do a Bernie?

 

[Christine69420]

Went for a little drive today in my TMX. It such a fabulous car! I would not exchange it for anything! OK - if I could do an even trade with a new TMX. But only then.

My TMX is solid black. As I'm sure my portfolio will be soon too!

 

[FrankSG]

Er.... I wish I had more dry powder to buy more stocks?

But yes, this is a very, very low volume day.

If you're comfortable with them, you could consider swapping some shares into options instead of buying more shares. I sold 5 shares today to buy 1x $450 Jun'21 Call Option.

I'm keeping the vast majority of my TSLA investment in shares, because they are obviously a much safer bet, and even with long term options the volatility and sometimes nonsensical unpredictability of TSLA SP can screw you over. But nonetheless, I like to move very small portions of my stocks into longer term options when I think SP is very low, but I lack dry powder.

If SP hits 215-220$, I'll probably sell 6 or 7 shares for a $400 Jun'21 Option.

 

[dmckinstry]

Wow really low volume and no one posting today. Interesting

Well, at least I picked up 2 more shares at $227.26 for my ROTH this a.m. Now it's up to x97 shares.

 

[Lessmog]

Well, at least I picked up 2 more shares at $227.26 for my ROTH this a.m. Now it's up to x97 shares.

Wow, so only three more to an even X-figure?

 

[Fact Checking]

I was assuming an average 12 productive weeks out 13.

Fair enough! Note that if we use the 12x production weeks + 1x shutdown week per quarter assumption, then 500k per year transforms to 10,400/week production rate, with only 48 productive weeks in a year.

Which really shows how much imprecise guessing there is behind the guidance:

Long term demand for 750k Model 3 and 1.25m Model Y per year

Elon also said, about two conference calls earlier, that in a global recession he expects about half demand.

Which is a real possibility: the FED is now filled with Republican appointees, who IMO will, under a Democratic president, with a fair probability, start an interest raising cycle which will trigger a deep recession.

Gross margins of 25% are still on the table (though seemingly dependent upon FSD milestones hurdles being met?)

If most of the deferred revenue we are seeing currently is sustained FSD purchases of the more expensive FSD option, with a high take rate, that should make 25% possible.

The good news is that FSD revenue recognition milestones should be much easier to hit than FSD AI-taxi milestones.

A "best guess" that long term ASP for Model 3 will be $42k

I don't think Tesla knows or is able to know.

Market penetration of Tesla is still very, very low in many regions except California, Norway and the Netherlands.

If the Model 3 and Y is able to capture more marketshare, then sales could easily be beyond 2 million units per year.

Giga 4 online around end of 2021 or 2022

GF4 capex depends on the GF3 and Model Y income I think. By that time Teslas 3rd generation Dreadnought should be ready as well - the "giant, giant Grohmann machine".

 

[KSilver2000]

I wonder what it would take to get buffet interested in Tesla with some of berkshire Hathaway 122 billion in cash

Here are a couple of their basic criteria that need to be met for consideration:

1. Demonstrated consistent earning power (future projections are of no interest to us, nor are "turnaround" situations),
   
2. Businesses earning good returns on equity while employing little or no debt,

 

[Intl Professor]

If I don't look at my positions, they can't be red, right?

The only looks that count are...?

 

[traxila]

It seems Debord doesn't have a clue about what disruption really means, the tech behind EVs or the difference in business models, cultures and incentives between Tesla and the traditional auto industry.

This idiotic article was partly the fault of Clayton Christensen arbitrarily defining disruption as only possible if you sell low end products, and for some reason people taking his word as gospel.
The nature of technology experience curves means it generally makes sense to introduce a new technology at the high end of the market first. This technology is better value for money relative to the existing products in this market segment, so it disrupts this segment of the market. As experience curves drive production costs down the new technology gradually disrupts lower and lower price segments of the market until it has disrupted the entire market.

In addition to being stupid, the article is also factually inaccurate such as claiming "Tesla's cars sell for between $50,000-100,000."

Yes, totally agree article was moronic, and refused to even mention market realities like battery supplies. Just an offhand comment about how easy it will be to convert ICE factories to BEV factories - ridiculous.

Give Christensen the benefit of the doubt on the disruption curve. The strategy Musk adopted and so far has executed on spectacularly was and is dependent on a significant portion of a population with resources who were and are ready to jump in feet first, some of them sight unseen, to make BEVs a reality. I refer, or course, to many people like those who can be found on this forum, who are willing to suffer all kinds of inconvenience (although my experience since 2013 has been pretty good!) and even to buy first edition Model S automobiles without even test driving them first! This is not a disruption strategy that, for example, the destroyers of the old steel industry could have adopted. The disruption we are witnessing is not just about better tech and pace of innovation, but a galvanized grassroots movement that is voting with its wallet. These kind of markets do not exist in traditional economic textbooks. I think most economists would refuse to acknowledge that such markets could ever exist. People are simply not given that much credit by the powers that be.

Still, the author’s lack of effort to even try and comprehend and explain exactly what is going on this time around in the car industry reduces this article to low end FUD clickbait. That of all the auto companies at the moment, Tesla should be the one that scrambles and fails in the Great BEV transition - laughable. But that is it right there - Debord made us laugh and that is worth something. Thanks Debord.

 

[elasalle]

For times like this, Cash is King

 

[FrankSG]

For people interested in a quick break down of the trade war.