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

[ggies07]

One heck of a slide deck.

https://data.bloomberglp.com/promo/sites/12/678001-BNEF_2020-04-22-ExecutiveFactbook.pdf

Indeed! Lots of summarized data in nice charts. Thanks for sharing! I'll be doing the same on other sites now.

 

[Prunesquallor]

To add to that, @verygreen says in the article the code has been in there over a year, no recent changes.
Subscriptions would be pure revenue as they pass any refund period (minus any data/ HW upgrade costs)

Autopilot as a Service. Why not?

 

[Singuy]

Indeed! Lots of summarized data in nice charts. Thanks for sharing! I'll be doing the same on other sites now.

In conclusion, wanna save the world? Keep world closed indefinitely.

Well if Tsla goes to zero but at least help the acceleration to sustainable energy to reduce co2 be enough for some of us. Can't get any more accelerated co2 reduction than current times.

This is the California is still closed glass half full kind of justification.

 

[saniflash]

I didn't think it made sense for a growth company like Tesla to offer FSD subscriptions

having built a number of SaaS companies throughout my life I strongly disagree. The paradigm of recurring revenue is extremely powerful, similar to that of compounding interest.

Especially in the case where the base sale has already been made (the car) every $ earned through subscriptions is pure profit thanks to marginal cost of 0 assuming CAC of 0

 

[Artful Dodger]

I highly doubt the first person they would offer a 7 seat interior to would be in Canada. As this is just a person stating this online with no evidence other than “they told me this on the phone” I’m inclined to dismiss it. Add to that, there is no incentive for Tesla to begin delivering the 7 seater in Canada unless they also start shipping the SR+, as the current LR variant will not qualify for the rebate:

• a vehicle with seven seats or greater, where the base model Manufacturer's Suggested Retail Price (MSRP) is less than $55,000;
  • higher priced versions (trims) of these vehicles, up to a maximum Manufacturer's Suggested Retail Price (MSRP) of $60,000, will also be eligible for purchase incentives;

Yeah, I like these sorts of situations. We'll know in just a few weeks if other reservation holders start reporting similar calls from Tesla, or if this report remains an outlier.

Regarding the Federal EV rebate (not actually a 'tax credit'), Tesla has ALREADY gone out tof their way (at some expense) to preserve the eligibility of the Model 3 SR+. With the recent plunge in the CAD, there has been an increase in prices across the Model range EXCEPT for the 3SR+ which allows it to continue to be eligible for the $5k CAD rebate.

No reason Tesla wouldn't apply the same reasoning to the 7-seat Model Y, and make it a priority like the Netherlands received in 2019Q3/4, and the UK now.

Cheers!

 

[Singuy]

having built a number of SaaS companies throughout my life I strongly disagree. The paradigm of recurring revenue is extremely powerful, similar to that of compounding interest.

If Tesla can figure out how to make money off loot boxes and microtransactions....

 

[LN1_Casey]

If Tesla can figure out how to make money off loot boxes and microtransactions....

You take those curse words back, you take them back right now. Next thing you'll know, EAGames will be a controlling interest and you'll have to pay extra to get wheels and seats with every car.

 

[HG Wells]

Assuming FSD was monthly then $7000 spread over 5 years would be $117 a month.

Not bad, not great. I could go for it on one car but not all 3.

 

[ZachF]

I don't think it would be a bad idea for Tesla to raise capital again if this SP persists. Especially if they have a positive ER surprise. Get a head start on Cybertruck factory, and provide an even larger buffer for COVID uncertainty.

 

[winfield100]

Ah that would explain it then. That says something about how confident VW were about getting the software sorted anytime soon.
All those ID3s sitting in fields rotting away...

@Electric Dream
waiting to be parted out, 1,000’s of battery packs ready for DIY folks and others wanting home battery packs, VPP’ nodes

 

[FrankSG]

Reoccurring income is king!

I welcome this. I own fsd on my x as a tip to Tesla for the profits I earned. Prior to that I had wished it was a sub because $7,000 is quite a bit for a Model 3/Y buyer.

Let people get into better cars (putting that $7,000 into AWD or white seats or whatever), and pay when they want fsd.

I know many really love navigate on AP during road trips, but do not really need FSD on their short daily commute. May as well extract those dollars.

There are a number of advantages to a subscription model:

• Recurring income
• Makes it less expensive for Tesla owners to trade up to a new Tesla as they do not have to repurchase FSD
• Makes it less expensive for existing Tesla owners that do not have FSD to upgrade to FSD (and hence more likely)
• Makes it less expensive for people that buy a used Tesla to upgrade to FSD (and hence more likely)
• Allows Tesla to have different service charges. In particular to differentiate use of FSD as part of Tesla Network/Robotaxi
• Simplifies options both for a new purchase and for used Teslas

This year, as FSD really becomes feature complete and starts to mature, is probably a good time for a move to a subscription model.

There are probably factors I'm missing as an outsider, but when the FSD software is safer than a human and enables robotaxis, $1B immediately is much more useful than $2B over 5 or 10 years. To understand why, one needs to appreciate the economics of a robotaxi:

1. Let's assume $30-35k up front costs (should be lower long term, but base M3/Y and base Cybertruck cost about this much to manufacture).
2. Say a cost to operate of $0.20 per mile (Elon quoted $0.18 in his presentation, could be much less long term).
3. Assume $0.70 price per mile compared to the $2-3 that other ride hailing services charge.
4. At 50% useful miles, that'd be $0.35 revenue per mile.
5. This means $0.15 profit per mile.
6. Assume a robotaxi operates 100 hours per week (should be 24/7 minus charging and maintenance time initially when there's limited supply, but could still be far more than 100 hours long term, if taxis transport cargo during off-peak hours).
7. If the robotaxi travels at ~25 mph (similar to Uber), that'd be 2,500 miles per week.
8. That means a robotaxi would earn $375 per week, and ~$20,000 per year.

These numbers are on the conservative side. Even $1 per mile would significantly undercut competition.

Nonetheless, the initial $30-35k investment pays for itself within 2 years, and then could generate as much as a 50% or more ROI per year.

This is why from my perspective I think it makes sense for Tesla to prioritize up-front cash, so that it can buy as many of its own vehicles as possible once FSD is safer than a human. However, there could be other variables that favor the subscription model, that as an outsider i am simply not aware of.

having built a number of SaaS companies throughout my life I strongly disagree. The paradigm of recurring revenue is extremely powerful, similar to that of compounding interest.

Especially in the case where the base sale has already been made (the car) every $ earned through subscriptions is pure profit thanks to marginal cost of 0 assuming CAC of 0

Operating one's own fleet of robotaxis is the mother of all recurring revenue

Once FSD is safer than a human, FSD attach rate should be 100%*, and it'll make sense for Tesla to get this cash up front to invest in its own fleet of robotaxis.

*People or investors will line up to buy a $40k EV + $20k or $30k FSD option. $60k or $70k for a robotaxi that can make you $200k or more over a 10 year period is a pretty damn good investment.

 

[ByeByeJohnny]

Funny, I've made several posts about a subscription based model for FSD in the past. Don't think I've ever had anyone agreeing with that view with a supportive post. Plenty of folks disagreeing though.

"News" to indicate Tesla themselves might think it's a way forward and suddenly lots of posters think it's a good idea. Welcome aboard folks.

Normally I see subscriptions as bad for the consumer, great for the company (see Adobe stock the last decade) but in this case I think it would be beneficially for all parts. As long as the price is set sensibly of course.

 

[ZachF]

Yeah, hope so, but every single ****ing step in this bureaucratic nightmare has to be fought for.... The next Europe Giga should be in some other country (pehaps Netherlands, Poland...), this is ridiculous....

Europe is a continent in steep decline. Share of global GDP in early 90s was about 34% (for Western Europe). It's about 20% now. USA is roughly the same at ~25%. Japan has dropped from 17% to 6% in that time, and China has gone from ~2% to ~16% now.

 

[Green Pete]

Green premarket

 

[Prunesquallor]

Yeah, hope so, but every single ****ing step in this bureaucratic nightmare has to be fought for.... The next Europe Giga should be in some other country (pehaps Netherlands, Poland...), this is ridiculous....

I wonder what it would take for Elon to walk away from Berlin? He's got to be feeling that in too many places where he puts a factory, the local government is trying to keep it from operating.

Warm winds blowing,
Heating blue sky
And a road that goes forever...
I'm going to Texas.

 

[ggies07]

In conclusion, wanna save the world? Keep world closed indefinitely.

NO. The conclusion is to switch to renewables ASAP. World can live off them better than fossil fuels.

 

[TheTalkingMule]

I wonder what it would take for Elon to walk away from Berlin? He's got to be feeling that in too many places where he puts a factory, the local government is trying to keep it from operating.

Warm winds blowing,
Heating blue sky
And a road that goes forever...
I'm going to Texas.

You think Texas is gonna throw less bullshit at Tesla than Germany? Is it even legal to buy a Tesla in Texas?

 

[BenPrice]

Bulls are in charge.

855 on the way.

LETS GET READY TO RUUUUUUUUUUUMBLE!

(Power bull puppy feed my options)

Just put my equity at 800 to suck away these vampire dollars.

Rebuying at 801.

Pay the troll to cross the bridge.

 

[Singuy]

You take those curse words back, you take them back right now. Next thing you'll know, EAGames will be a controlling interest and you'll have to pay extra to get wheels and seats with every car.

Wait they already do micro transactions like heated rear seats and acceleration boost.

Now, they just need to sell "Tesla Coins"..use the "Tesla Coins" to roll the dice on random goods like Easter eggs. You can also earn "Tesla Coins" by helping them train, by driving on AP, or referrals. Some of the items would be random wacky functions like more cow bells. Rank items as rare, ultra rare, or Arcana. A chance to win acceleration boost would be Arcana. Getting free 100 supercharger miles would be rare. You're welcome Tesla

 

[dgodfrey]

I disagree because I think the ready access to all the silicon, software and other technical expertise is a major reason that Tesla is kicking the butts of the big car makers. I would argue they couldn't have picked a better spot to disrupt the ICE industry. Not only that, but new cars roll right off the production line and into the largest EV market in the US. It's even ideal for some reasons that probably weren't even apparent when they chose the location. For example, they couldn't have built the 3rd Model 3 production line in a tent if they were in Detroit!

You are implying Tesla made a poor choice when they picked Fremont. I think they made an unconventional choice based on first principles thinking that was absolutely brilliant. A major reason Tesla has been so successful is they make consistently good decisions every step of the way.

I have to wonder if Elon's strategy of building the manufacturing plant as close to the resources needed has something to do with your point above? At one point, I believe 50% of BEV's in the US were registered in California. At $1,200 each for delivery, not a bad margin.

There is no way that in 2010, Tesla would have known about COVID-19 and the current county policy about reopening factories...

At least no way Elon will admit too, if true, that means he also knows what happens next.

What does this have to do with Stealth's post above?