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

[Tim S]

To be fair- there's about 80 million new cars sold each year.

Even the most optimistic projections of battery factory/capacity for the next 20 years don't show anywhere near enough being produced to replace 80 million cars a year. Maybe half that last I saw?

Tesla, which has more capacity than anyone AFAIK, hopes to make 500k EVs this year. Out of 80 million new cars.

And they've got other businesses they need batteries for too that they've been starving just to hit those car numbers.

20 years is a long time. If Tesla's vehicle production grows 50% every year they will reach 80 million per year in about 12 years.

 

[TheTalkingMule]

2 positive cases out of 10,000 employees. Is it not startling to folks that outlets like CNN, Forbes, etc can now be directly purchased like Business Insider? I wonder what these transactions look like.

 

[elasalle]

The FUD machine definitely seems to be in high gear today. These just popped into my feed...

View attachment 549801

Two sick employees and an internal email do not warrant that headline.

Only NKLA is safe, since they are not producing anything

 

[Steve m]

After a catnip appetizer, you wouldn’t care let alone notice the bacon wrapped rat kebabs.

Yea right... The other night one of my cats smuggled a rat into the house and started eating it in the kitchen.

I gave the cat a sharp rebuke telling him that food is eaten in the dinning room not the kitchen.

 

[Steve m]

The FUD machine definitely seems to be in high gear today. These just popped into my feed...

View attachment 549801

Two sick employees and an internal email do not warrant that headline.

Tesla has nothing on the fishing industry... Of course this story is making headlines.

Factory trawler returns to Seattle after 85 crew members test positive for COVID-19

 

[willow_hiller]

Tesla has nothing on the fishing industry... Of course this story is making headlines.

The thing that irks me is that testing employees regularly, finding two positive cases, and quarantining all other employees who came in contact with them for 14 days is a contact tracing success story. People are going to be exposed in their personal lives, all Tesla can do is make sure they don't bring it into work.

 

[FrankSG]

GM’s Barra sees U.S. transition to electric vehicles taking decades

General Motors' top executive expects it will take decades for electric vehicles to take over as the dominant form of transportation but sees driverless cars on the road within five years.

CEO Mary Barra said American drivers will go electric, but it will take a long time for most of the 250 million vehicles on U.S. roads to be battery powered.

“We believe the transition will happen over time,” Barra said on “Leadership Live With David Rubenstein” on Bloomberg Television. When asked if all cars will be electric in 20 years, she said that may be too soon. “It will happen in a little bit longer period, but it will happen.”

That outlook underscores the tricky task Barra will have budgeting billions for new models and deciding which of them will run on battery power. Following inroads made by Tesla Inc., GM is one of the most aggressive automakers when it comes to electrifying its lineup. It currently sells just one EV in the U.S. but is developing more than 20 plug-in models, including a Cadillac crossover and a Hummer pickup that will both debut by the fall of 2021.

I think we can pretty much write off the entire automotive industry at this point. Six months ago I thought VW still had a shot at capturing large EV market share alongside Tesla with the ID.3 and ID.4, but those are turning out to be a disaster. Furthermore, VW appears to now be turning against Diess, the only executive in the automotive industry who seemed to understand the reality of the situation, and the world is left with the likes of Mary Barra making statements like this...

Looks like at best we're going to have to wait another 3, 4, 5 years for the next generation of EVs from traditional auto, that maybe will be serious enough of an effort to sell hundreds of thousands per year. But Tesla will already be selling millions of vehicles per year at that point. And investments into those programs would have to be made now, while a lot of OEMs are struggling due to the COVID-19 crisis.

It really seems like Tesla will just end up with Apple iPhone like market share, and perhaps also margins, in the automotive industry. And by Apple iPhone like market share, I'm referring to their near 50% market share from a few years ago, not their current ~20% market share. With Diess seemingly on his way out, nobody besides Tesla even seems to be interested in mass manufacturing and selling EVs, let alone have the capability to do so. I just don't see anyone else who will be able to sell 10M+ EVs per year by 2030 other than Tesla. Hell, at this point I'm not even sure if anyone other than Tesla can sell 10M+ cumulative EVs by 2030.

I don't think comparing the smart phone market to the automotive market is a good way to look at Tesla's potential value, but with that in mind let's make the comparison anyway. The smart phone market may be ~15x larger than the automotive market (1.5B vs 100M), the ASP of a car is about 50x that of an Apple iPhone (~$40k vs ~$800), and about 80x that of the average smart phone (~$40k vs ~$500). So the automotive market Tesla is going after is about 3-5x the size of the smart phone market Apple went after.

 

[graphilwar]

I appreciate Mary Barra's candor in going on the record. Instead of hedging, blowing smoke and trying to play it both ways, she admits to utter cluelessness. This will make it easier for GM to dump her when the time comes.

Does she have any idea how long 20 years is? Wonder how quickly she will walk this back.

Sounds like she’s hoping the “electric revolution” won’t happen so soon while she’s still in charge because she has no idea how GM will succeed in that environment. Implied in her statement is her true game plan: to retire with a golden parachute first, and then let her successor deal with the problems...the only one who looked like they were really trying was the CEO of Volkswagen and that effort looks like it’s driven off the side of the road and off a cliff.

 

[Curt Renz]

Ben and Mitch Zacks were regular guests of mine on my old TV show.

Zacks - after today's close: Tesla (TSLA) Dips More Than Broader Markets: What You Should Know

Excerpts:

TSLA's full-year Zacks Consensus Estimates are calling for earnings of $4.59 per share and revenue of $26.85 billion. These results would represent year-over-year changes of +3430.77% and +9.23%, respectively.

Investors should also note any recent changes to analyst estimates for TSLA. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

TSLA is currently a Zacks Rank #1 (Strong Buy).

 

[RobStark]

To be fair- there's about 80 million new cars sold each year.

Even the most optimistic projections of battery factory/capacity for the next 20 years don't show anywhere near enough being produced to replace 80 million cars a year. Maybe half that last I saw?

Tesla, which has more capacity than anyone AFAIK, hopes to make 500k EVs this year. Out of 80 million new cars.

And they've got other businesses they need batteries for too that they've been starving just to hit those car numbers.

Barra is talking about getting to 126M BEVs on the road and registered in the USA when USA buys ~17M units per year.

She has mandatory retirement in 2027.

 

[RobStark]

I was dating this woman back in 1990 —

I thought we were getting a "dating Mary Barra" story.

 

[EinSV]

I think we can pretty much write off the entire automotive industry at this point.

I wouldn't underestimate the Chinese EV manufacturers. The auto market eventually will probably be led by Tesla and Chinese companies, some of which buy out or partner with legacy auto to capture the brand value ala Geely (Volvo) and Tata (Jaguar) (Indian company but same principle).

 

[MC3OZ]

Sure long as you can repeatedly retool all your existing plants to build the new batteries with each advance in a timely and cost effective manner

Currently lithium supply worldwide for this is roughly 390,000 tonnes- just the factories announced for THIS decade are gonna require nearer a couple million.

Here is a simple video on battery material supplies:-

Of course investments need to happen in sync, but we can always find or mine more resources,,,, the need to find oil didn't keep the horse in business.

Transition from the horse to the car in cities took roughly 10 years, transition form ICE to EV should take about the same time...

Once they have the software/battery sorted out EVs are easier products to make with fewer parts...

 

[MC3OZ]

I wouldn't underestimate the Chinese auto manufacturers. The auto market eventually will probably be led by Tesla and Chinese companies, some who buy out or partner with legacy auto to capture the brand value ala Geely (Volvo) and Tata (Jaguar) (Indian company but same principle).

Any legacy auto which fail might be brought by the Chinese, who may even keep the dealerships in place, effectively it is a convenient badge and brand image and a ready made marketing network... Where an how the cars are actually made is a simply detail, but most of the design and R&D will be done in China.

 

[Mo City]

I wouldn't underestimate the Chinese auto manufacturers. The auto market eventually will probably be led by Tesla and Chinese companies, some who buy out or partner with legacy auto to capture the brand value ala Geely (Volvo) and Tata (Jaguar) (Indian company but same principle).

Yep. I also think the German companies will figure it out and remain major players during/after the transition. Maybe consolidation causes them to become the Big 2.

I still don't have much hope for the non-Chinese EV startups unless they are bought by legacies, Apple, Amazon or Google.

 

[smorgasbord]

“We believe the transition will happen over time,” Barra said on “Leadership Live With David Rubenstein” on Bloomberg Television. When asked if all cars will be electric in 20 years, she said that may be too soon. “It will happen in a little bit longer period, but it will happen.”

Cathie Wood of ARK Invest has pointed out that GM is spending billions - but only 10% of its R&D budget on EVs, with 90% on ICE. So, GM is investing out of proportion to what the market is going to be.

 

[StealthP3D]

2 positive cases out of 10,000 employees. Is it not startling to folks that outlets like CNN, Forbes, etc can now be directly purchased like Business Insider? I wonder what these transactions look like.

Fremont has over 10,000 employees. In the last two weeks Alameda County health officials have confirmed 1071 new cases which amount to 65.2 per 100,000 countywide. Officials say the actual rate is almost certainly much higher.

2 out of 10,000 employees only amounts to a rate of 20 per 100,000 employees, less than a third the overall county rate.

The headlines should read "Tesla employees about 3 times less likely to be infected with Coronavirus compared to general County population".

Alameda County has about 1.7 million residents and 4,000 confirmed cases in total. That means 1 out of 425 people are known to have been infected. This doesn't count the people who had the virus but never got tested. With 10,000 employees at Fremont, we would expect there to have been 23.5 cases confirmed if Tesla employees were being infected and tested at the same rate as the general population.

If the two cases we have read about are the only two Fremont employees to have tested positive, employees are more than 10 times less likely to test positive than the general county population.

 

[FrankSG]

I wouldn't underestimate the Chinese EV manufacturers. The auto market eventually will probably be led by Tesla and Chinese companies, some of which buy out or partner with legacy auto to capture the brand value ala Geely (Volvo) and Tata (Jaguar) (Indian company but same principle).

Do you know of any ways to stay more up to date on Chinese EV developments? I hear relatively little about them in the media compared to non-Chinese OEMs.

 

[dww12]

2 positive cases out of 10,000 employees. Is it not startling to folks that outlets like CNN, Forbes, etc can now be directly purchased like Business Insider? I wonder what these transactions look like.

My wife’s school district got it’s first case yesterday and my work got it’s first case today.

 

[ggies07]

GM’s Barra sees U.S. transition to electric vehicles taking decades

General Motors' top executive expects it will take decades for electric vehicles to take over as the dominant form of transportation but sees driverless cars on the road within five years.

CEO Mary Barra said American drivers will go electric, but it will take a long time for most of the 250 million vehicles on U.S. roads to be battery powered.

“We believe the transition will happen over time,” Barra said on “Leadership Live With David Rubenstein” on Bloomberg Television. When asked if all cars will be electric in 20 years, she said that may be too soon. “It will happen in a little bit longer period, but it will happen.”

That outlook underscores the tricky task Barra will have budgeting billions for new models and deciding which of them will run on battery power. Following inroads made by Tesla Inc., GM is one of the most aggressive automakers when it comes to electrifying its lineup. It currently sells just one EV in the U.S. but is developing more than 20 plug-in models, including a Cadillac crossover and a Hummer pickup that will both debut by the fall of 2021.

**** that *sugar*. Humanity at its finest.