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

[CorneliusXX]

With thanks to Jose Pontes of EV Volumes via Cleantechnica, here are movements since this time last year

First models & brands
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Then groups
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VW have nearly tripled their pure EV deliveries YoY. Certainly good for the mission.

 

[mekberg]

A thousand freakin' times, YES! THIS!!
Economies of scale works in both directions.
Gas may not reach $20/gal in 10 years, but you can bet the distribution will look very different.

When the Tesla Semi scales- will we have petrol companies hauling their fuel with them?

If so: the irony!
If not: gas will be that much more expensive compared to other goods.

 

[durkie]

13% reduction in R&D - Nice!

Is this actually a good thing? Genuine question. My first thought would be that R&D is exactly the kind of stuff I'd want Tesla spending on: please keep developing cool new stuff.

 

[StarFoxisDown!]

Is this actually a good thing? Genuine question. My first thought would be that R&D is exactly the kind of stuff I'd want Tesla spending on: please keep developing cool new stuff.

It's actually showing how badly bloated most large companies are, especially big tech. Even though I was on the Xbox side of things, I worked at Microsoft for 10 years and knew many people on the other teams/divisions, and it's amazing how bloated and wasteful big tech can be. Billions spent on wasteful projects with no focus.

When I hear traditional auto makers talk about spending 20 or 30 billion each over the next say 5 or 10 years, the only thing I'm impressed by is how inefficient they are with their R&D.

 

[Tslynk67]

think “outside the gravity well”
put some next gen Merlin or Raptor engines on a small/medium icey asteroid (“tales of the flying mountains” by Poul Anderson)
viola
you have both a ship AND reaction mass AND oxygen and can mfg additional fuel from concentrated sunlight from volatiles when necessary

Sounds like quite a Feersum Endjinn!

 

[StealthP3D]

Is this actually a good thing? Genuine question. My first thought would be that R&D is exactly the kind of stuff I'd want Tesla spending on: please keep developing cool new stuff.

Dollars is not a good way to measure R&D. Of all the spending categories, R&D is probably one of the easiest ways to throw a lot of money down the toilet. It's also a category often used to cover excessive spending in other areas. Lots of room for grey area here. I'm always glad to see it decline as long as I'm convinced it's not being pinched in ways that would slow down innovation.

Hopefully, Elon is not planning on coasting through the end of his compensation package with little in the way of new innovations!

I don't think he would do that. If he would, I'm invested in the wrong company!

 

[j6Lpi429@3j]

Random idea re: Opening up the supercharger network.
Make it public that Tesla is overcharging non teslas for the power. All the excess income goes into a ringfenced fund, and that cash is automatically allocated to discount the price for teslas. Could even be done on a state by state or even location by location basis.
That way any tesla owner sat waiting for a nissan leaf to charge can be comfortable in the knowledge that his next charge is getting part-subsidized by the leaf owner.

 

[j6Lpi429@3j]

Is this actually a good thing? Genuine question. My first thought would be that R&D is exactly the kind of stuff I'd want Tesla spending on: please keep developing cool new stuff.

This would be true if there was not already a lot of amazing products in the 'when are they going to actually make these?' queue, such as roadster, semi and cybertruck, and 4680/structural. Production is already massively lagging behind R&D.

 

[wipster]

This would be true if there was not already a lot of amazing products in the 'when are they going to actually make these?' queue, such as roadster, semi and cybertruck, and 4680/structural. Production is already massively lagging behind R&D.

Remember, prototyping is far easier than production...

Plus, you can only do what you can do with what you have, although Tesla has proven this is not always the case through their use of alternative chips and modified SW to continue production while the competition just gave up and sat on their... hands. That is a company I can get behind!

 

[capster]

I agree with you on this point, Tesla will not establish global dominance based on selling vehicles below cost. That is where anti-trust rules could be successfully used to stop Tesla. If global dominance did occur, it could only be due to one thing, because Tesla, using first principles relentlessly, grew into such a lean and efficient organization that no other company with the required manufacturing capability could even come close to offering a similar value without selling below cost and bankrupting themselves. I think it's conceivable to have the potential to manufacture and deliver a superior vehicle for 50% less cost than any standing competitor. This is not my prediction, just a scenario that I think possible.

In any case, I think it's quite unlikely Tesla will ever rise above 50-60% market share but not for the reasons you lay out in your previous missive. It's because I expect other manufacturers to re-organize and develop lower cost structures so they can copy Tesla's cost-lowering innovations, perhaps not on equal footing with Tesla but probably closely enough to be able to compete (eventually). But there is no guarantee this will happen. I think your list of reasons are poorly reasoned, none of those things would absolutely prohibit Tesla from becoming globally dominant. It doesn't even read like a list of things that prohibit anything from happening. It looks more like a list developed to explain why something you think could never happen, could never happen. That's not how one reasons using first principles. If you provided one good reason why it could never happen, I would have no choice but to admit it was impossible.

The future holds many surprises and no one can predict exactly what they are.

On this and the monopsony front, I have been wondering about Gigapress manufacturing capacity and the expansion thereof.

Gigapresses play a role in the deflation of the price of Tesla’s cars and will continue that deflation into the future.

I imagine Tesla has orders for more and possibly larger yet Gigapresses well into this decade. SpaceX and The Boring Company may have orders in as well or they may plan to schedule runs on Tesla’s presses.

The adoption of Gigapresses for legacy automakers would conceivably entail a wholesale refactoring of manufacturing and factories. Perhaps some forward thinking automakers have orders in already, just in case.

If you were IDRA or its Chinese parent, would you build out much capacity in the hope that legacy automakers would be buying in the next several years? I imagine they might build out some, but not enough to supply a large number of manufacturers.

 

[redan]

Tesla listed as one of five stocks top Wall Street analysts think can deliver more gains as earnings season continues.

Top Wall Street analysts are betting on more gains for these stocks as earnings continue

For Tesla, they quote Vijay Rakesh of Mizuho Securities:

After delivering a strong top-line and gross margin performance, are more gains in store for electric vehicle maker Tesla? Mizuho Securities analyst Vijay Rakesh says yes.

In line with his optimistic approach, Rakesh lifted the price target from $820 to $825, which puts the upside potential at 28%. In addition, he left his Buy rating unchanged.

...

Vijay Rakesh of Mizuho Securities: Data from TipRanks shows that the #130-ranked analyst has delivered a 65% success rate and 24.7% average return per rating.

 

[BornToFly]

If this doesn't put a smile on your face on a Sunday, you might be dead inside....

https://twitter.com/x/status/1416550119516753921

 

[Fred42]

That's not how these transitions usually work. The kind of switchover you're describing would have us still buying flip phones today.

ICE purchases will be deemed foolish by 2025 and very few will be sold in 2030. Yes, this will lead to a few years of far fewreer than 70M cars being sold. People will simply ride out their used cars longer or not upgrade. No chance consumers are out there buying ICE offerings from BMW or an ICE Camry in 2028.

We don't know what it'll look like, but it won't be the smooth 30 year ease-over you're describing. It's called disruption for a reason.

Did people notice Ford discontinued the diesel F-150 for 2022?

De-PowerStroke'd: F-150 Diesel V-6 Is Dead

It was torquey while it lasted, but with the advent of the F-150 hybrid, the diesel’s time is up.

www.motortrend.com

 

[StealthP3D]

On this and the monopsony front, I have been wondering about Gigapress manufacturing capacity and the expansion thereof.

Gigapresses play a role in the deflation of the price of Tesla’s cars and will continue that deflation into the future.

I imagine Tesla has orders for more and possibly larger yet Gigapresses well into this decade. SpaceX and The Boring Company may have orders in as well or they may plan to schedule runs on Tesla’s presses.

The adoption of Gigapresses for legacy automakers would conceivably entail a wholesale refactoring of manufacturing and factories. Perhaps some forward thinking automakers have orders in already, just in case.

If you were IDRA or its Chinese parent, would you build out much capacity in the hope that legacy automakers would be buying in the next several years? I imagine they might build out some, but not enough to supply a large number of manufacturers.

I bet IDRA's parent company could replicate their Italian manufacturing plant in China and be pumping out Gigapresses within two or three years. But where would the initial production go? Probably to Chinese auto companies. Are they already in motion?

This is one more reason why I don't expect Tesla to become the only large manufacturer. Unless maybe Tesla has pre-order contracts for the next 4-6 years production of Gigapresses! This is the kind of info that can be invaluable to the investor. Is IDRA expanding production capability? Does Tesla have purchase rights?

On a related thought, it would be good to pay attention to what Tesla ends up implementing in Austin in terms of automated brake's for Cybertruck.

 

[The Accountant]

Very informative. Thank you!

Can you provide any color as to why the corporate tax rate was lower than forecast?

More profits were earned in the US where Tesla currently has near zero federal & state tax rates as they can use their losses from prior years to offset the current quarter profits. We may see the same rate in Q3 as I expect large auto & energy sales in the US this quarter.

 

[lafrisbee]

Did people notice Ford discontinued the diesel F-150 for 2022?

De-PowerStroke'd: F-150 Diesel V-6 Is Dead

It was torquey while it lasted, but with the advent of the F-150 hybrid, the diesel’s time is up.

www.motortrend.com

yeah???????
just the v-6. Not "the diesel F-150."
And from what I read the reason was it was under-performing the other low-end ICE F-150 options, which have improved.

 

[petit_bateau]

VW have nearly tripled their pure EV deliveries YoY. Certainly good for the mission.

3x growth is what is required for anyone simply to maintain relative position. That is why Tesla are pushing so hard to maintain 2x and not relax.

Volkswagen went from 64k to 182k and maintained 10% market share by vehicle numbers.

Total BEVs (excl PHEV) went from 642k to 1,702k, so again a 3x growth by vehicle numbers.

Tesla actually slipped back on a vehicle # basis, with 179k increasing to 386k, so approx 2x, slipping from 19% to 15%.

It won't be until I crunch the data further that I can work out the $$$ revenue and GWh cell consumption implications.

imho, it is all about cell supply

 

[StealthP3D]

yeah???????
just the v-6. Not "the diesel F-150."
And from what I read the reason was it was under-performing the other low-end ICE F-150 options, which have improved.

Isn't the V-6 the only diesel Ford offers in the F-150?

 

[22522]

I bet IDRA's parent company could replicate their Italian manufacturing plant in China and be pumping out Gigapresses within two or three years. But where would the initial production go? Probably to Chinese auto companies.

This is one more reason why I don't expect Tesla to become the only large manufacturer. Unless maybe Tesla has pre-order contracts for the next 4-6 years production of Gigapresses! This is the kind of info that can be invaluable to the investor. Is IDRA expanding production capability? Does Tesla have purchase rights?

On a related thought, it would be good to pay attention to what Tesla ends up implementing in Austin in terms of automated brake presses for Cybertruck.

I think the questions are:

1) Fast follow works if you can see the whole value chain, but if you can't see the whole chain, or duplicate the whole chain, fast follow will be slower and more expensive (as if you don't own the whole chain there are negotiation parasitics everywhere).

2) We all agree that money will motivate follow.

3) We don't know if it can happen at a competitive or lower cost (for value chain scale reasons that the wall street bosses cannot grasp at this time).

Because of how people on wall street were trained (brutal cause effect), I don't see their vision changing fast enough to manage long value chain fast follow correctly.

They have really hard edges on what they believe is true. Maybe from a short leash...

 

[StealthP3D]

3x growth is what is required for anyone simply to maintain relative position. That is why Tesla are pushing so hard to maintain 2x and not relax.

Volkswagen went from 64k to 182k and maintained 10% market share by vehicle numbers.

Total BEVs (excl PHEV) went from 642k to 1,702k, so again a 3x growth by vehicle numbers.

Tesla actually slipped back on a vehicle # basis, with 179k increasing to 386k, so approx 2x, slipping from 19% to 15%.

It won't be until I crunch the data further that I can work out the $$$ revenue and GWh cell consumption implications.

imho, it is all about cell supply

Those kind of BEV comparisons would be more useful if they excluded all "golf cart" BEV's selling for less than, say $10K.

Standards are important. Just like we shouldn't think only electric vehicles compete with electric vehicles. Because the low cost "golf cart" BEV's in China are expanding the automotive market, not competing with Tesla. They wouldn't even be street legal here. Yet they make up what, around half of the statistics?