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

[Buckminster]

Pretty sure these guys are talking nonsense:

https://twitter.com/elonmusk/status/1280759730164559874

 

[avoigt]

I do hear your concerns but they are based on quite a few premises that probably should be tested harder.

1. Missing self imposed roll-out targets: While this is true, it may well be that the targets were wrong in the first place. What we know for certain is that the number of superchargers and the quality/availability of service is not poor enough to reduce demand to the point that it is below the supply constraint. Tesla has recently chosen to reduce new vehicle prices before rapidly expanding service/supercharger centers - who knows if that will continue.
2. Should the growth of service centers & superchargers be linear with fleet growth: No. If any of the following assumptions hold true:
   1. Build quality improves over time
   2. Tesla can improve efficiency of their service centers over time
   3. Supercharger efficiency can improve over time (e.g. idle fees and pay per use)
   4. Current facilities not being used at 100% (likely true in many areas with low fleet density)
   5. Software upgrades can fix fleet problems
3. How many service centers / superchargers do Tesla need: This again is hard to quantify but it is likely to peak at a relatively low level if the robotaxi fleet comes to life, and if not the requirement is still not likely to be linear with fleet growth.
4. If Tesla need to expand rapidly, will the cost break the bank: no. I think you along with plenty of comments already mentioned here go into the details.

So the short answer is that there isn't much to be concerned about.

There is always anecdotal evidence that service is poor, and in an ideal world that wouldn't happen. But we are just not seeing a real world impact that would justify spending big on expansion in this area. Service has always been a touchy subject on this board because of the anecdotal evidence and it leads to endless comments back and forth which lead to no conclusion because of the wide spectrum of outcomes.

@neroden was a highly valued member of this board (up there with FC and Karen IMO) but ultimately he chose service quality as his hill to die on and it cost him dearly in terms of missed profit.

Its been sad to see neroden making one mistake after the other in evaluating Tesla by weighting service issues that happened way too high. Later I have seen some very bearish posts from him in the comment section at CT in my articles and he looked almost like a troll. Sad development.

I do not know whether he did ever reinvest, understanding he made a mistake that is today obvious for everybody.

The same happened with Curt Renz who sold everything because of how and what Elon did tweet. I never understood how that can be a reason to invest or not in a company (Sorry, Curt). Elon acknowledges he sometimes tweets nonsense and just for fun and regrets it later.

Luckily Curt went in again but the challenge some have is to extrapolate an issue they see if justified or not, to the entire investment thesis. Its just one element of many and not anything that brings a company with superior technology down.

 

[MABMAB]

Pretty sure these guys are talking nonsense:

https://twitter.com/elonmusk/status/1280759730164559874

Or they are talking above your level of comprehension? They were for me until I searched the internet...

 

[Singuy]

I do hear your concerns but they are based on quite a few premises that probably should be tested harder.

1. Missing self imposed roll-out targets: While this is true, it may well be that the targets were wrong in the first place. What we know for certain is that the number of superchargers and the quality/availability of service is not poor enough to reduce demand to the point that it is below the supply constraint. Tesla has recently chosen to reduce new vehicle prices before rapidly expanding service/supercharger centers - who knows if that will continue.
2. Should the growth of service centers & superchargers be linear with fleet growth: No. If any of the following assumptions hold true:
   1. Build quality improves over time
   2. Tesla can improve efficiency of their service centers over time
   3. Supercharger efficiency can improve over time (e.g. idle fees and pay per use)
   4. Current facilities not being used at 100% (likely true in many areas with low fleet density)
   5. Software upgrades can fix fleet problems
3. How many service centers / superchargers do Tesla need: This again is hard to quantify but it is likely to peak at a relatively low level if the robotaxi fleet comes to life, and if not the requirement is still not likely to be linear with fleet growth.
4. If Tesla need to expand rapidly, will the cost break the bank: no. I think you along with plenty of comments already mentioned here go into the details.

So the short answer is that there isn't much to be concerned about.

There is always anecdotal evidence that service is poor, and in an ideal world that wouldn't happen. But we are just not seeing a real world impact that would justify spending big on expansion in this area. Service has always been a touchy subject on this board because of the anecdotal evidence and it leads to endless comments back and forth which lead to no conclusion because of the wide spectrum of outcomes.

@neroden was a highly valued member of this board (up there with FC and Karen IMO) but ultimately he chose service quality as his hill to die on and it cost him dearly in terms of missed profit.

It's very odd that Tesla reduced prices vs increasing service centers as a demand lever when management talked about the surge in demand a service center creates on a conference call.

The reality is people who need to travel hours for a service are less forgiving with poor customer service due to the added stress from the inconvenience. So I rather Tesla add service centers as top priority due to all the positive upsides it bring for Tesla.

 

[LJS22]

Pretty sure these guys are talking nonsense:

https://twitter.com/elonmusk/status/1280759730164559874

That would be Forbes...I just saw an article with the headline “What if China arrest Musk?” Is that the plan to get back to max pain haha

 

[Singuy]

I don't know USA cultures (plural, big place, lots of variety I'm guessing). For Europe/UK, younger people often don't have cars. They borrow parents' / relatives' cars or rent for specific things and then it might be a van rather than a car. Ikea and similar rent vans by the hour (I think, never done it). I've met a lot of 20s people that have never learned to drive. It used to be a right of passage.

Could USA be similar? I wouldn't dispute what you say about average Americans, but times are changing. There must be very densely populated cities, suburban, rural and remote locations. College cities / areas or anywhere where Uber services are popular are the correct locations. Robotaxis probably wouldn't work for the majority of USA people, but might chip away at the edge and increase over time.

In the UK a lot of people drive when elderly and not in good health. They might only drive once a week in a Toyota Yaris (tiny) sized car but at the moment do not have a choice in many places as bus services barely or don't exist. Village shops and pubs have closed. Shared robotaxis from a village for pension day (Wednesdays I think) might even be popular for oldies as it's more social and no expensive parking to pay for.

I can never drink when I go to a party and often nowhere to park at peoples' houses. Parking in many places is a nightmare - even at work. For example 'new' (well, for last 30+ years probably) business parks are only allowed enough parking spaces for one third of the expected workers. I've worked in places where you couldn't park within half a mile of your workplace as often firms have more than the original number of expected workers (1100 vs 700 planned). People get to work earlier than they need. Some sit in the car for an hour before going in. Even then I was parking on grass verges that looked (after a winter of bad parking) like WW1 battlefields or ploughed fields . Eventually these verges got fenced off - no idea what people do there now. In the summer I walked the 2 miles as it was quicker than driving in traffic jams and finding a parking space.

Hospitals charge their staff (often not well paid in UK) for parking and even then it can be hard to find spaces in staff car parks. All-day parking can be very expensive especially in town centres. I think the train station here is around £11 per day but cheaper with monthly passes. People will increasingly work part-time in their office or visit clients twice a week - so daily is cheaper for many.

Robotaxis - I can see a future.
We have lots of terraced houses (row houses?) with no parking - one place I lived, I counted myself lucky if I could park on the same street. Imagine having kids and shopping in a British winter and parking 400 yards away in the dark. Charging would need to innovative in terraced streets! It's happening slowly.

I'm not sure of the price structure - per mile seems crude - time and distance seems better. Shared Robotaxis acting as mini-buses or for people working at same location on shifts (again hospital) might make a lot of sense. Often there are bus lanes which taxis can use (not sure about mini cabs/Uber - licenced differently). This means a taxi is faster than private cars in built up areas. When I get taxis from the station to home (3 miles) - I often pay £11 due to traffic and distance.

A boring tunnel or two would change things in ways I can barely imagine but look forward to.

Probably because EU charges a stupid amounts of money for insurance which only enable older adults to have the luxury to drive. Also the public transportation infrastructure is second to none while in the US many city just skip it/rather expand roads as public transportation has low demand and also seen as low economic social status when utilized(unless in NYC).

 

[Words of HABIT]

Good morning $1400. We missed you.

 

[Artful Dodger]

08:00 a.m. Whistle: Wed, 08 Jul 2020

• NASDAQ-100 Futures: +46.25 +0.44% 07:59:42 ET
• TSLA share price: $1398.66 +8.80 +0.63%
• NASDAQ Pre-market Volume: 113,217 @ 08:00 ET

Comment: "Pre-Market Volume back down from the stratosphere"

Cheers!

 

[UkNorthampton]

Probably because EU charges a stupid amounts of money for insurance which only enable older adults to have the luxury to drive. Also the public transportation infrastructure is second to none while in the US many city just skip it/rather expand roads as public transportation has low demand and also seen as low economic social status when utilized(unless in NYC).

I wonder how insurance varies. When we buy travel insurance we often buy annual policies. Europe cheap (or free with banking etc), worldwide (excluding USA but including Canada and everywhere else) pretty cheap, worldwide including USA much more expensive - because of increased medical bills. Surely USA's medical costs must translate to higher driving insurance premiums (cost)? Accidents more common and dramatic than Europe (UK especially) I would have thought.

 

[pyromatter]

 

[Singuy]

I wonder how insurance varies. When we buy travel insurance we often buy annual policies. Europe cheap (or free with banking etc), worldwide (excluding USA but including Canada and everywhere else) pretty cheap, worldwide including USA much more expensive - because of increased medical bills. Surely USA's medical costs must translate to higher driving insurance premiums (cost)? Accidents more common and dramatic than Europe (UK especially) I would have thought.

Insurance for young people is high for EU. At least that's what I saw from top gear so maybe it's not even true..lol

 

[brantse]

I just watched it. Munro states that the costs "dropped significantly" between Model 3 and Y!

 

[UkNorthampton]

I just watched it. Munro states that the costs "dropped significantly" between Model 3 and Y!

I was about to post similar with some more detail:-

Munro Videos

I think Tesla will aim to reduce car prices when supplier (battery) prices fall and building efficiencies (megacastings, processes) will also be passed on. The prices will shift from the cars to the software (FSD). I think that's what is behind some price reductions. margins similar to before.

- vehicle to grid and buddy-buddy charging of other vehicles. Not possible with current circuit boards - needs hardware changes. 2017 Model 3 vs 2020 Model Y dramatic changes.

- [Audio Fixed] Tips for Tesla E1 - Steering and Weight Reduction. Next generation steering (not convinced myself! Some of it is mental - literally). Weight and friction reduction suggestions for/sending to Tesla - tyres/wheels (linked to 3rd party provider), megacastings - more possible for the front - big advantages, carbon fibre battery trays, 'every engineer, one gram every day'


LINKS MENTIONED IN VIDEO:
Lightweight aftermarket Tesla Wheels: Martian Wheels
Munro & Associates Paradigm Aircraft - Paradigm™ – Regeneration of Transportation | Munro & Associates, Inc.

 

[LJS22]

as we say in dutch: Ohhh dat gaat lekker! (translated in: that is nice) or something like it.
Tesla China sold 14,954 Model 3 vehicles in June, up 35% on the month

Start your rocket engines $TSLA! Will it be a wet dress rehearsal or do we skip the testing and fly off into space?

Shorts will say “ha! That’s a 165% percentage decline from the previous month...this is no growth company! Calling my broker to see if I can use my kids as collateral to short some more...this is a slam dunk!”

 

[Webeevdrivers]

And even FSD isn’t the robotaxi network. That’s quite a while past FSD.

Elon said that there would be a million FSD capable cars on the road by end of this year. Doesn’t mean they will be running FSD or robotaxi. I do think Cathie Wood is right about Tesla launching an Uber like service in the interim until Robotaxi and the supercharger network is fully automated. Will take time for regulators to catch up.

I’ve actually tried to find Elon’s original statement with no joy. What did he actually say re a million robots is. Seems to be some misinformation out there.

 

[UkNorthampton]

Insurance for young people is high for EU. At least that's what I saw from top gear so maybe it's not even true..lol

Expensive for the young especially for performance cars - I was on a course with a twenty-something living in outer London - his insurance for a Civic Type R or similar was huge £4-7,000. No idea on thefts in area, his driving history etc. Oh and that was about 16 years ago.... have gone up a lot since then. Generally under 25 years old is very expensive, so many don't bother even going on parents' policies. Therefore don't even bother learning. BTW, insurance groups in UK go from 1 to 50 (most expensive). Even Model 3 Long Range is group 50 (last year checked)! So Performance or Model X must be 50++++++++

 

[Singuy]

I’ve actually tried to find Elon’s original statement with no joy. What did he actually say re a million robots is. Seems to be some misinformation out there.

He said it during autonomy investors day.

But I think he was not giving any kind of firm statement. He was referring to how an over the air update can enable FSD on the million cars on the road which then can be potential autonomous taxis referring to this year. I don't remember him using any words of certainly but overzealous Musk may have. You can go back and watch it for reference.

 

[RobStark]

UK Overall Automotive sales

 

[CorneliusXX]

I don't know USA cultures (plural, big place, lots of variety I'm guessing). For Europe/UK, younger people often don't have cars. They borrow parents' / relatives' cars or rent for specific things and then it might be a van rather than a car. Ikea and similar rent vans by the hour (I think, never done it). I've met a lot of 20s people that have never learned to drive. It used to be a right of passage.

Could USA be similar? I wouldn't dispute what you say about average Americans, but times are changing. There must be very densely populated cities, suburban, rural and remote locations. College cities / areas or anywhere where Uber services are popular are the correct locations. Robotaxis probably wouldn't work for the majority of USA people, but might chip away at the edge and increase over time.

In the UK a lot of people drive when elderly and not in good health. They might only drive once a week in a Toyota Yaris (tiny) sized car but at the moment do not have a choice in many places as bus services barely or don't exist. Village shops and pubs have closed. Shared robotaxis from a village for pension day (Wednesdays I think) might even be popular for oldies as it's more social and no expensive parking to pay for.

I can never drink when I go to a party and often nowhere to park at peoples' houses. Parking in many places is a nightmare - even at work. For example 'new' (well, for last 30+ years probably) business parks are only allowed enough parking spaces for one third of the expected workers. I've worked in places where you couldn't park within half a mile of your workplace as often firms have more than the original number of expected workers (1100 vs 700 planned). People get to work earlier than they need. Some sit in the car for an hour before going in. Even then I was parking on grass verges that looked (after a winter of bad parking) like WW1 battlefields or ploughed fields . Eventually these verges got fenced off - no idea what people do there now. In the summer I walked the 2 miles as it was quicker than driving in traffic jams and finding a parking space.

Hospitals charge their staff (often not well paid in UK) for parking and even then it can be hard to find spaces in staff car parks. All-day parking can be very expensive especially in town centres. I think the train station here is around £11 per day but cheaper with monthly passes. People will increasingly work part-time in their office or visit clients twice a week - so daily is cheaper for many.

Robotaxis - I can see a future.
We have lots of terraced houses (row houses?) with no parking - one place I lived, I counted myself lucky if I could park on the same street. Imagine having kids and shopping in a British winter and parking 400 yards away in the dark. Charging would need to innovative in terraced streets! It's happening slowly.

I'm not sure of the price structure - per mile seems crude - time and distance seems better. Shared Robotaxis acting as mini-buses or for people working at same location on shifts (again hospital) might make a lot of sense. Often there are bus lanes which taxis can use (not sure about mini cabs/Uber - licenced differently). This means a taxi is faster than private cars in built up areas. When I get taxis from the station to home (3 miles) - I often pay £11 due to traffic and distance.

A boring tunnel or two would change things in ways I can barely imagine but look forward to.

Speaking of terraced streets. If i were thinking about what the best solution would be for quality of life living on these streets it would be for a ubiquitous robotaxi fleet that you could reliably get in less than 5 minutes. You could then just remove parking and have a much more pleasant street to live on. This would be far better than the congested nightmare Many of them are today. Many are so narrow that they're really only one way by the time cars are parked on both sides.

The additional room could be used for wider footpaths or green space.

 

[CorneliusXX]

It's very odd that Tesla reduced prices vs increasing service centers as a demand lever when management talked about the surge in demand a service center creates on a conference call.

The reality is people who need to travel hours for a service are less forgiving with poor customer service due to the added stress from the inconvenience. So I rather Tesla add service centers as top priority due to all the positive upsides it bring for Tesla.

A price drop is tactical and can be done in a few minutes. The SC/SC infrastructure is a longer term prospect.