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

[ProfTournesol]

Well, macros are positive. NASDAQ-100 Futures currently up +0.78%

Stock Indices Futures - Investing.com

We've seen a lot of positive days with poor TSLA performance. In my opinion the next week nothing will happen, almost flat. Maybe next week volume will pick up because of the last month of the quarter.

 

[dakh]

Often it's which new car they will buy, not whether they will buy anything. When you are only 2% of the total new-vehicle market, it doesn't take many "defectors" to soak up any excess. And a $2,000 lower price is going to make the difference for a lot of buyers, the difference between stretching a little for the Tesla or just getting another plain jane, boring but "practical" gas car.

I don't think 2% is particularly relevant, Model 3 for example is the sales leader in its segment by a big margin and nobody thinks they'll buy a truck but end up buying a M3 because of some small price reduction. So yea, maybe that'll get a bit more market share from M-B/Audi/BMW/Lexus. Overall US vehicle sales drop is "over 50% in April". It is probably reasonable to assume Tesla is going to fare a bit better than average since its customer base is probably a bit less hit by the downturn. Still, I'm pessimistic about US demand. The usual much harder question though is how much of an expectation of soft demand for a few quarters is baked into the share price already.

 

[mrdoubleb]

Why would they only make SR Model 3's? They're basically software locked SR+, and they have a lower margin because of it.

Also, SR is not even available outside of NA.

 

[aubreymcfato]

Elon exhibited all the traits of a curious, energetic tot. He picked things up easily, and Maye, likemany mothers do, pegged her son as brilliant and precocious. “He seemed to understand thingsquicker than the other kids,” she said. The perplexing thing was that Elon seemed to drift off into atrance at times. People spoke to him, but nothing got through when he had a certain, distant look in hiseyes. This happened so often that Elon’s parents and doctors thought he might be deaf. “Sometimes, hejust didn’t hear you,” said Maye. Doctors ran a series of tests on Elon, and elected to remove hisadenoid glands, which can improve hearing in children. “Well, it didn’t change,” said Maye. Elon’scondition had far more to do with the wiring of his mind than how his auditory system functioned. “Hegoes into his brain, and then you just see he is in another world,” Maye said. “He still does that. NowI just leave him be because I know he is designing a new rocket or something.”Other children did not respond well to these dreamlike states. You could do jumping jacks rightbeside Musk or yell at him, and he would not even notice. He kept right on thinking, and those aroundhim judged that he was either rude or really weird. “I do think Elon was always a little different butin a nerdy way,” Maye said. “It didn’t endear him to his peers.”For Musk, these pensive moments were wonderful. At five and six, he had found a way to blockout the world and dedicate all of his concentration to a single task. Part of this ability stemmed fromthe very visual way in which Musk’s mind worked. He could see images in his mind’s eye with aclarity and detail that we might associate today with an engineering drawing produced by computersoftware. “It seems as though the part of the brain that’s usually reserved for visual processing—thepart that is used to process images coming in from my eyes—gets taken over by internal thoughtprocesses,” Musk said. “I can’t do this as much now because there are so many things demanding myattention but, as a kid, it happened a lot. That large part of your brain that’s used to handle incomingimages gets used for internal thinking.” Computers split their hardest jobs between two types of chips.There are graphics chips that deal with processing the images produced by a television show streamor video game and computational chips that handle general purpose tasks and mathematicaloperations. Over time, Musk has ended up thinking that his brain has the equivalent of a graphics chip.It allows him to see things out in the world, replicate them in his mind, and imagine how they mightchange or behave when interacting with other objects. “For images and numbers, I can process theirinterrelationships and algorithmic relationships,” Musk said. “Acceleration, momentum, kineticenergy—how those sorts of things will be affected by objects comes through very vividly.”

Lidar was out of the question from the beginning.

 

[junas]

I don't think 2% is particularly relevant, Model 3 for example is the sales leader in its segment by a big margin and nobody thinks they'll buy a truck but end up buying a M3 because of some small price reduction. So yea, maybe that'll get a bit more market share from M-B/Audi/BMW/Lexus. Overall US vehicle sales drop is "over 50% in April". It is probably reasonable to assume Tesla is going to fare a bit better than average since its customer base is probably a bit less hit by the downturn. Still, I'm pessimistic about US demand. The usual much harder question though is how much of an expectation of soft demand for a few quarters is baked into the share price already.

It's also worth remembering that China is now pretty much self-sufficient. What once was allocated for China has to be sold elsewhere starting from this quarter. Tesla has to find more buyers in the US, EU, or some new markets such as Korea to keep Fremont 100% running. Earlier US&EU sales numbers are nowhere near enough in the current two factory setup.

Since fixed costs of Fremont production remain the same it's important to produce as many cars as possible. It's pretty amazing if $2000 price cut is all it takes in current economic conditions.

 

[Reductionist]

Do you happen to have data on test positivity rates / daily number of people tested / deaths per day? Without this information the data you posted isn't terribly useful, the increase in cases may simply be caused by increased testing.
On the other hand, this data may well be used to try to justify a strengthening of social distancing measures without any appropriate context, so it's relevant in that way.

 

[MC3OZ]

Why would they only make SR Model 3's? They're basically software locked SR+, and they have a lower margin because of it.

What I was thinking of wasn't a software locked SR+, but a specific SR pack with fewer cells...

The margin might be slightly lower, but it would unlock more demand, and free up a few more cells for Model Y.

Why it is a software lock SR+ and off menu at present is Tesla doesn't want to sell it in volume, but as the cost walks down, it may become possible.

A 35K on menu available anywhere and a Performance Model 3 are the 2 options that don't need to complete with Model Y...
A Performance 3 is better than a Performance Y, and no Y will be available for 35K anytime soon.

Removing the extra cells doesn't make that much difference to the margin, but freeing up the extra cells and unlocking IMO very high levels of consistent demand might make it worth it..

I think 35K is top price for a significant chunk of buyers... it is no accident that was the original target.. I would be surprised if it wasn't an important milestone that they wanted to hit.

 

[Reductionist]

Tesla got permission to start work on the foundations of Giga 4. Like with all the other permits so far, Tesla can start working at their own risk before the whole project is approved (the approval process is stuck due to a public hearing that can't be held due to COVID as far as I know), and will need to reverse all activities if the final approval isn't granted, which I think is unlikely.

[German] Umweltamt genehmigt Fundamentarbeiten von Tesla in Grünheide bei Berlin
Recommend deepL for translating, better than Google translate in my experience.

 

[Silentk]

Seen on Twitter - definitely no need for advertising! Looks incredible.


TESLA MODEL 3: 2020 AUTONOMOUS TRIALS

Five miles of the Lee Roy Selmon Expressway in Tampa was shut-down for four hours

Diamond View video agency ran an experiment involving an autonomous fleet of nine Teslas and a Lamborghini Huracan

youtu.be/jmw_7W4esnY via @YouTube

link to the tweet: JPR007 on Twitter

 

[LN1_Casey]

What I was thinking of wasn't a software locked SR+, but a specific SR pack with fewer cells...

The margin might be slightly lower, but it would unlock more demand, and free up a few more cells for Model Y.

Why it is a software lock SR+ and off menu at present is Tesla doesn't want to sell it in volume, but as the cost walks down, it may become possible.

A 35K on menu available anywhere and a Performance Model 3 are the 2 options that don't need to complete with Model Y...
A Performance 3 is better than a Performance Y, and no Y will be available for 35K anytime soon.

Removing the extra cells doesn't make that much difference to the margin, but freeing up the extra cells and unlocking IMO very high levels of consistent demand might make it worth it..

I think 35K is top price for a significant chunk of buyers... it is no accident that was the original target.. I would be surprised if it wasn't an important milestone that they wanted to hit.

I understand where you're coming from, but I very much disagree.

It's not just "removing a few cells." They're not line up like toy solders easy to move around, they're made into modules, which are then made into packs. Making a smaller pack would require a whole assembly configuration, or they'd have to rework an existing line. If they did that, then they'd have 3 different pack lines for the 3 alone, and even the model S (currently) only has 1 for savings purpose.

The model Y will eat into the model 3 sales, but not by much. A sedan is different than a cross over. People generally like one or the other. The model Y will take more sales from the model X than the 3.

The people whose top price is $35k right now very likely aren't buying a new car--they were possibly non-essential workers, or couldn't work from home, and the $1.2k "stimulus" money wouldn't be enough to cover the last two months of rent, food, utilities, and other bills. This means they cut into their car savings fund, or added more debt to their credit line, and their purchase is going to be delayed until well past EOQ.

The people who are still buying cars right now will buy the model they want, and not likely to go for the cheapy charlie, RWD 220-range 3 when a tad bit more adds not an insignificant amount of range, in addition to further customization options, which Tesla is know to have very few.

 

[BOBTHEJOCKEY]

Oops!

They just todayk dropped the price of a Tesla model 3 without FSD by $2000. They had already RAISED the FSD price by $1000 recently and another $1000 coming on July 1st. Thinking of what all that means.

 

[MartinAustin]

I don't think there will be very much time in between this $5K price drop and an announcement about battery day. The "location of the next gigafactory" news cycle has gotten pretty cold too. They've had a lot of time recently to organise their ducks.

We could see a tweet from Elon as early as tonight, if the launch was successful, so that it can be mentioned in the SpaceX/NASA news cycle for a wider audience (and cancel out negative press from the price drops)

Either "battery day announcement coming soon" TONIGHT or, if TOMORROW something like

"Battery & Powertrain Investor Day plus something else, AUSTIN June 17th"

Invites would follow in the same way as for Autonomy Day

 

[jerry33]

Yes, thats a $5,000 drop for the LR and performance models.

I reckon I still came out ahead because I took the money out just before the general stocks dropped. (No TSLA was sold, only the losers).

 

[RobStark]

I understand where you're coming from, but I very much disagree.

It's not just "removing a few cells." They're not line up like toy solders easy to move around, they're made into modules, which are then made into packs. Making a smaller pack would require a whole assembly configuration, or they'd have to rework an existing line.

My understanding is they have used dummy cells in the past to reduce cost but not require reengineering the pack.

The model Y will eat into the model 3 sales, but not by much. A sedan is different than a cross over. People generally like one or the other. The model Y will take more sales from the model X than the 3.

I very much disagree with this.

You are very unlikely to convince someone looking into buying a Corolla to instead buy a Sequoia full size truck based SUV. You might very well convince them into buying a Corolla based RAV4 crosssover. This is why sales for sedans like Corolla are crashing while sales of crossovers like RAV4 are booming.

And visually Model 3 and Model Y are much closer than is typical for a sedan and its sibling crossover.

 

[Reductionist]

According to this article [German], Tesla is planning to employ about 2000 people in it's planned R&D center in Berlin, which is going to be located in the EUREF business park, specifically in the Gasometer. Converting the gasholder to office spaces will take about 3 years, according to the article, with Tesla being one of two potential tenants.

 

[Drax7]

So there is a demand problem, and lowering the price will help offset it.
Isn’t there a guy here we all know that buys a share every time
Somebody mentions a demand problem and he goes
To mock them with impunity.

 

[Singuy]

Wedbush upped their pt to 800, maintain neutral rating.

 

[j6Lpi429@3j]

They're not line up like toy solders easy to move around, they're made into modules, which are then made into packs.

There is a lot of speculation that this may be changing soon, if it has not already quietly been done.

 

[LN1_Casey]

There is a lot of speculation that this may be changing soon, if it has not already quietly been done.

If they didn't have it done in the model Y, they wouldn't have done it for the model 3. At least not yet. And I think they'd do it at the new factories before GF Nevada, since then they're not reinventing the lines and just starting from scratch.

 

[InDaClub]

So there is a demand problem, and lowering the price will help offset it.
Isn’t there a guy here we all know that buys a share every time
Somebody mentions a demand problem and he goes
To mock them with impunity.

WIP: Wright's Law is the best way to predict the future

According to calculations from ARK Invest, the cost of an average fossil car will decrease 0.5% per year, while the cost of electric cars will decrease by 12% annually.

The best-selling electric car in the world right now, Tesla's Model 3, costs $40,000 in its cheapest version. Within three to four years, that will probably be cheaper than a corresponding fossil fuel car. Not only cheaper to own— an electric car has lower service costs and zero gasoline cost — but it will also be cheaper to buy.