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

[InTheShadows]

I don’t know about the rest of you but I am really loving these @DaveT and Warren Redlich YouTube videos. Dave’s conservative price target approach vs Warren’s ultra rosy approach and the two of the discussing their different takes on growth and modeling is fantastic!

It really gives deeper insight to both of their approaches.

 

[UnknownSoldier]

As far as I know ETFs aren't allowed to hold private equities. So no SpaceX for ARK, of GK, or FFND.

I'm not so sure about that. Baron Partners Fund Retail Shares (BPTRX) holds SpaceX but trades as an ETF.

 

[InTheShadows]

Also, Giga Texas is going to take a full year just to get up to a run rate of 500k/year. So it won't hit that production rate until probably Q4 2022. The EV credit actually passing I think will at least double, if not triple demand for 3/Y in the US. We're already seeing demand grow much faster than Fremont's production capacity. Giga Texas will eventually triple Fremont's production rate, but that's likely 2-3 years away. In the meantime, the backlog is going to continue to grow.

I'd put money on 2022 being sold out by March, April at the latest.

I think the tax credit is one of the reasons Tesla pushed the Cybertruck back to late next year.

 

[CyberShy]

I think the tax credit is one of the reasons Tesla pushed the Cybertruck back to late next year.

No. I disagree. There is no reason to do that.

 

[MP3Mike]

I'm not so sure about that. Baron Partners Fund Retail Shares (BPTRX) holds SpaceX but trades as an ETF.

No, the Baron products are mutual funds, and don't trade as/like an ETFs. (Mutual funds can hold private equities.) For example you can't trade a Baron product during market hours. You can only put a trade in to be executed at the closing price of the day.

 

[StarFoxisDown!]

No. I disagree. There is no reason to do that.

I think he was insinuating that because of the tax credit, the demand for Model Y will be huge. We already know that Tesla is using 2170 cells to start with to get things rolling, but it could be that they want 4680 cells to go entirely to Texas built Model Y's instead of splitting 4680 cell supply between the made in texas Y and the Cybertruck in 2022 while 4680 cell supply is still extremely tight........which is a very logical assumption.

 

[RobStark]

Well it doesn't need any support from Republicans in the Senate. But yes, I still think this is going to get cut out or changed.

The most obnoxious thing in this EV credit plan is the incentives for US-made batteries in the vehicles. $500 as an incentive for US made batteries is a joke. The cost difference between a US made battery can't compete with the likes of CATL, LG, etc...The batteries and battery packs from those guys will be much cheaper than $500 when compared to a US made battery.

Obviously I'm excluding Tesla here. I'm just talking about legacy auto makers. $500 as a incentive will do diddly squat to make legacy auto makers decide to buy their batteries from US battery manufacturers or to incentivize companies to set up local battery production in the US

The Bill is going to need either Republican support or Sen Manchin's vote. Which in this context is pretty much the same thing.

LG and GM have built the building for a 30 GWh battery factory in Ohio and have approved another 35 GWh factory in Tennessee. Obviously, they need to figure out what is causing defects in their batteries before installing equipment and commencing production.

Ford and SKI are in the final negotiations to build two GF of 30 GWh in the United States.

Samsung and Rivian are in preliminary talks on building a GF to supply their Normal Illinois plant. This section of the Bill is to support American battery manufacturing not necessarily US incorporated companies building batteries.

 

[InTheShadows]

No. I disagree. There is no reason to do that.

IMO it makes perfect sense. The demand for Y is already high, it will be off the charts if the tax credit is passed. As an investor, I too want them to push back the totally new product that will inevitably have some manufacturing snafus and ramp more slowly. It makes more sense to quickly ramp an existing product they have most of the bugs worked out of and ramp their run rate to 500k+ annually as quickly as possible.

I have 3 cybertruck reservations and I was originally hoping to take delivery of one by the end of this year, so I want this truck produced as quickly as possible. However in the best interest of the shareholders and eliminating ICE vehicles from the road. Delaying the cybertruck is the right move. (And this isn’t even taking into consideration 4680 ramping issues.)

 

[Zythryn]

Even if supply constrained, a $7,500 drop in the price of all Tesla models means a significant amount of Tesla buyers will opt for higher priced models than they would have otherwise, meaning Tesla profits more even If they choose not to increase pricing further. Eg: instead of a SR model, buyers choose a LR.

Excellent point!
I do believe Tesla will profit from any such rebate. I just don’t believe it will be 100% pure profit, as stated by the person I was responding to.
Yours is the best reasoning I have heard of for there being some benefit.

Of course, if that $40k max price sticks, it limits it even more. But a few will still manage to thread the needle.

 

[StealthP3D]

I wonder how much of a bump in the road for Tesla production this is?

Hope they deploy FSD Semis soon.

Overturned Semi-Truck Carrying Tesla Batteries Completely Blocks Westbound I-80 In Placer County

A stretch of westbound I-80 in Placer County was completely blocked Friday afternoon due to a semi-truck rollover crash.

sacramento.cbslocal.com

Not even a blip. The battery is the heaviest portion of a car. Assuming these were even car batteries, one semi-trailer can only carry enough batteries for around 80 cars.

The semi lost it's brakes descending a grade. I imagine this kind of accident will almost completely go away once all tractors have regen braking.

 

[heltok]

Imo this is how a $7500 would affect Tesla
1. Introduce rebate
2. Increased orders
3. Increased wait times
4. Increased prices and increased investments into scaling
5. Lower costs according to wrights law
6. Higher profits
7. More scale
8. Lower wait times
9. Lower prices

Profits still remain high as costs have gone down due to scale. Also software will become a larger share of the profits.

Tesla wants to grow as fast as they can. But there are limits to how fast you can scale. Tesla has a huge war chest and they are already printing money so they are not constrained by cash. And Elon clearly has the ambition. However they cannot just build 20 gigafactories in parallel and introduce 10 new models. If you try you will end up with technological and organizational debt that will cripple your organization and you will end up growing slower. Around 50-100%/year is probably the max you can healthily grow a company of this size.

Tesla has shown in the past that they have a good system for scaling the company. The have learnt some lessons but some new challenges will come as the scale gets bigger. We will probably have to be content with max 50-100%/year for the next decade, there is no good way of doing it faster. The good news is that 100%/year for 10 years is 1024x, that‘s 500M vehicles/year for 100% or 25M/year for 50%. That’s plenty… If they fail and only average 40% that is also great.

 

[scubastevo80]

No, the Baron products are mutual funds, and don't trade as/like an ETFs. (Mutual funds can hold private equities.) For example you can't trade a Baron product during market hours. You can only put a trade in to be executed at the closing price of the day.

Active ETFs could likely hold private equity as well if they had proper disclosures. Given many ETFs are used as trading vehicles, advisers wouldn’t want to deal with liquidity and weighting issues (something I’ve seen mutual fund managers struggle with explaining to intermediaries and other institutional investors).

 

[StealthP3D]

Who could ever forget the aftermath of the big EverReady battery truck crash?

Or the big Ray-o-vac battery truck crash ...

Or the crash of the truck carrying the DieHard batteries ...

Or the time the Energizer Bunny caught on fire ...

/s

Good point. It's actually surprisingly common for trucks carrying loads of batteries to crash. When those batteries are lead acid it usually results in a difficult hazmat response due to spilled acid. What's not common is listing the brand of the batteries. That's never done. Unless they are Tesla brand.

Semi carrying batteries rolls over in Eden Prairie, hazmat responds

Authorities say the semi was carrying a load of batteries and that battery acid began to leak from the truck ...

kstp.com

No mention of battery brand.

Cocoa powder, batteries spill on highway in northwestern Indiana semi crash

Crews worked to put out small fires on a highway in northwestern Indiana Friday morning after a semi-crash caused lithium batteries and cocoa powder on the road.

www.wthr.com

No mention of the battery brand.

Semi crash close highway this morning

A commercial semi driver got a ticket for careless driving after he crashed his vehicle this morning on Interstate 84 on top of Ladd Canyon, spilling a load of tractor

www.eastoregonian.com

No mention of the battery brand.

Semi crash, hazmat response close I-65 north in Hart Co. through the day

A semi carrying a load of batteries overturned Monday morning in a construction zone along Interstate 65 in Hart County, causing all northbound traffic to close.

www.wave3.com

No mention of the battery brand.

Stuff

www.stuff.co.nz

This crash spilled 300 liters of battery acid. The photos made apparent they are primarily used batteries from ICE vehicles but the article didn't mention that.

Overnight semi fire closes interstate, requires extensive hazmat cleanup

A fire onboard a semi-trailer early Tuesday morning closed the westbound lanes of Interstate 70 for many hours. The truck was carrying vehicle batteries and the resulting leakage of acid has required extensive cleanup which caused traffic delays throughout the early morning commuter rush...

ycitynews.com

More lead-acid batteries from ICE vehicles and spilled acid and fire complicates re-opening of the road.

W. Jordan trucker remains critical after fiery I-80 crash

The condition of a truck driver who sustained life-threatening injuries in a fiery collision wi

archive.sltrib.com

"It was one semi's load of car batteries and the other big rig's load of several hundred gallons of cleaning chemical that fed intense blaze that destroyed both rigs and damaged the road's surface.
UDOT crews repaved the affected section once it had cooled down."

 

[mltv]

And this one:

https://twitter.com/x/status/1436798490747801600

 

[Paul_SF]

And this one:

https://twitter.com/x/status/1436798490747801600

I feel for the eager future owners that were so happy to receive their amazing Teslas in a short few days.

Can’t wait for Austin and all the GFs to be making millions and millions of Teslas to replace the *sugar* ICE cars that are polluting our precious air and steal money from all of us through exorbitant maintenance fees and waste of resources.

ICE is a menace to humanity, this is not a joke anymore!

 

[Krugerrand]

*waits patiently for @Krugerrand to chew him out*

Nobody’s perfect.

 

[Paracelsus]

And this one:

https://twitter.com/x/status/1436798490747801600

As the Q3 blowout delivery numbers and subsequent blowout Q3 earnings nears I have been wondering when the forecastable next Tesla Fire and Tesla Autopilot ‘accidents’ will occur that the mainstream media will run away with ‘just in time’ to slow the next End of Quarter stock run up. Is the trigger for the next fake news a stock price that is too high before deliveries and again before Q3 earnings? Is it a specific week or day just before the end of this month? Perhaps an algorithm based on trading volume increase to a level that signals MMs are going under? The last couple quarters included a Tesla fire on an ice covered lake and a vehicle running into a tree on a quiet culdesac that no one witnessed immediately, the later really being suspiciously timed as many here suggested. Perhaps the Tesla Quarterly earnings Bingo game should be modified for an End of Quarter FUD Bingo board. It’s coming my friends - Elon and crew are doing to well for Shorts to go quietly into that Q3 night. Maybe we should start a Guess the end of Q FUD game here, or at least a survey, one that doubles down for the winners if their guess includes the correct day too. The last two weeks of September will be ripe for the Pickens. It would be somewhat comical and a bit of a punch in the face to Shorts if any media picked up on a TMC member guessing Q3 FUD before it occurred.

 

[StealthP3D]

Just shows how much work is ahead for Tesla to achieve World dominance.

I see it as opportunity. The world is Tesla's oyster!

 

[StealthP3D]

Man, this Elon dude is such a bear valuing Tesla vs. "other automakers".

I think he's just having fun joking around saying things that sound sensible to most people and sandbagging a little bit. He's a puppet master and the rest of the world is composed of puppets.

Life is more fun that way and he's earned it.

 

[StealthP3D]

I'm sure if you asked Elon and Zach the same question "Is Tesla overvalued today without factoring in FSD?", you would get two very different answers.

I generally agree with what you are saying but I think Zach would be very uncomfortable weighing in on Tesla's valuation even if he wasn't in a quiet period.

Elon knows TSLA's valuation will follow the productivity of the company and has no plans to sell for a long time so any importance of the share price action to him would likely be centered squarely on how it affects his employees compensation.