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

[woodisgood]

Tesla (TSLA) takes over HP's campus in California despite moving HQ out of state

While Tesla is moving its headquarters out of California, CEO Elon Musk made it clear that the automaker would still...

electrek.co

For those that wish not to click, Tesla is leasing 325,000 sqft in Palo Alto (old HP buildings). Any guesses? Mine would be AI/bot division…

 

[Cherry Wine]

It's definitely the worst of both worlds right now. It will sit at an intersection and be overly cautious creeping and braking and creeping and braking all herky-jerky and then it blasts off, often with a sharp steering adjustment mid turn. Today it wanted to make a left turn to a side street across oncoming traffic and it really nicely and aggressively took an opening and accelerated.... and then stomped on the brakes halfway across the oncoming traffic lane and creeped the rest of the way. I've gone on a few rides so far and it has overall been a big mess of bad driving.

It does not seem to correctly understand two-way turn lanes yet, and it definitely wanted to go straight through an intersection when it was in a right turn only lane. As a software developer I'd be a little hesitant to even call this beta yet. Don't get me wrong though, it's extremely impressive, and the things it does not do correctly seem very solvable. But when it makes mistakes (frequently) it does put you in at worst dangerous situations and at best situations which are extremely confusing for other drivers.

I've taken it on several drives today and my experience has been pretty rough also - disengagements left and right, sometimes from my own uncertainty with the system (is it going to hit that curb?), but at least once when it was going to perform something unsafe (looked like it was heading towards a parked car - wish I had thought to save that video footage so I could rewatch again - I flagged that one for the team though). I've already flagged probably 10 or so video clips for the Autopilot team.

Sometimes it has nailed some maneuvers really well, including a roundabout, but my experience has been rough so far. But, I'm super stoked to get the opportunity to see it firsthand and participate in the testing and feedback process, and - hopefully - see it improve! I'm probably going to buy a simple filming setup to record and share some footage.

Rest assured, when I get really bullish on FSD, I'll be sure to let you all know, and you can be damn sure that means it's getting impressive, because I won't sugarcoat the truth. But we've got a ways to go in my experience.

 

[22522]

Tesla (TSLA) takes over HP's campus in California despite moving HQ out of state

While Tesla is moving its headquarters out of California, CEO Elon Musk made it clear that the automaker would still...

electrek.co

For those that wish not to click, Tesla is leasing 325,000 sqft in Palo Alto (old HP buildings). Any guesses? Mine would be AI/bot division…

Calls for a map with a pin at the leased location, (since HP had a lot of stuff down where Apple is...) The pin is positioned to scarf off all the Stanford summer interns keeping them away from Apple (and Google) with "Why drive if you can bike or walk?" Worth $40 on the share price for location, location. Location.

 

[Tronguy]

Tesla (TSLA) takes over HP's campus in California despite moving HQ out of state

While Tesla is moving its headquarters out of California, CEO Elon Musk made it clear that the automaker would still...

electrek.co

For those that wish not to click, Tesla is leasing 325,000 sqft in Palo Alto (old HP buildings). Any guesses? Mine would be AI/bot division…

Holy moly! I spent two summers in that building as an engineering summer hire, working on signal generators and audio analyzers too many decades ago.
The 20-odd foot high picture windows overlooking San Francisco Bay are to die for.
Fun place to be in an earthquake. The building is designed to sway, rather than break. (San Andreas fault is less than 10 miles away.)

 

[22522]

This is why I'm very bearish on FSD. Elon keeps talking about a "global maximum" on what I assume to be some kind of probability density function.
Even if they do get there, there is no guarantee that the maximum be able to drive at an acceptable level for regular consumers and regulators.

Dear StrongGuy,

I am very impressed by the answers you have received.

When trying to understand why your question may be treated as an irritant, I think it is kind of like asking someone a question they do not know the answer to. (Amazingly, people here were able to answer!).

Had you asked the the same questions about SpaceX 5 years ago, could anyone have answered with authority?

With me, I don't even think that way unless it is close, as if comparing GM and Ford. This does not look close to me.

To resort to analogy of playing chess (2D old style). There are two ways to play 1) detailed plans many moves in advance, 2) control the part of the board that leverages the power of your pieces the most (control the center of the board) and then be opportunistic as the game develops. I was never smart enough to play the first way, so I abandoned that approach.

If you think about how Elon works, and how the second method can be used to play 6 games simultaneously while the first way this would be more difficult, I think Elon is using the second, more flexible, method.

This thought occurred when I used MapQuest to look at an aerial photograph of:
1) the Stanford Campus and the student housing that supports it
2) the Apple Cupertino Campus
3) Moffett Field (Surrogate Google location)
4) Sand Hill road
5) Tesla's new 10 year lease

That location has people power because there is no commute to speak of from where Computer Oriented students live.

This situation of the future does not look close to me. Who else wrecked a car off Sand Hill road? Everyone else is an outsider.

(The real question is, "Is it zoned residential?")

 

[Singuy]

Ioniq 5 1000km challenge through Sweden

TLDR

1. Many Ionity broken chargers

2. Navigation doesn't plan for you, hard to find ionity chargers on the navigation system unless you zoom all the way in.

3. Does not pre condition battery as you are close to the charging station

4. Battery overheats when driving/charging and which results in reduced power down to 50kw(67bhp). I am actually surprised because Sweden's ambient temp is 44F. How this car can function in the summer is anyone's guess.


Overall I don't even know how this is a competitor to ICE, nevermind a Tesla.

 

[Chunky Jr.]

Overall I don't even know how this is a competitor to ICE, nevermind a Tesla.

It almost makes you wonder if the legacy automakers are saying "see, we tried to make an electric car, but they suck, so can we go back to building ICE cars again?"

 

[kemallette]

There was an interesting post from another member here when TSLA reached its peak and we were all getting called dumbasses by our friends and families for not selling.

...

It’s from 9 months ago.

If you want the complete Tesla valuation, go read Frank’s investment thesis on Tesla, you will be as Strong as you could ever be in face of adversity or in the face of someone trying to influence you to sell.

I'm glad you found it useful! Original quoted below followed by some updated stats.

I get the sentiment. I even agree with it in regards to certain companies and perhaps the EV and related space. Seeing companies with no product in market and 0 to virtually 0 revenue (NKLA, QS) commanding multi-billion dollar valuations is astronomically absurd.

However, those are the exception rather than the rule. The numbers just don't point to another dot-com bust. Here's a nice thorough write-up penned in Sept on why. No, This Isn't a Repeat of the Dot-Com Bubble – Of Dollars And Data

Here are some key takeaways from the article:

Note: I've also adjusted some of the numbers to show where we are now vs when this was written in Sept as well as added a few tidbits not in the article

1. Nasdaq 5-year performance:

95 - 2000: +456%​

2015-Current: +156%​

​

2. Sampling of biggest individual performers:

95-2000 (avg 11x - 40x)​

Intel: +998%​

Cisco: +3,910%​

Oracle: +1,220%​

Microsoft: +1,600%​

​

2015-2020 (avg 2.5x - 6x)​

Apple: +401%​

Amazon: +375%​

Netflix: +361%​

Facebook: +155%​

Zoom: +559%​

TSLA: +1,234% <---- Noteable exception I address at the end of the post​

3. P/E Ratios are still below the dot-com average: 44 vs 29-30ish

4. Yields (TINA - there is no other alternative)

Current average earnings yields (E/P) are:

Now: ~3-3.3% (1/29.5)​

Dot-com: ~2.2% (1/44)​

Meaning, investors expect about a 3-3.5% return for every dollar they put in a stock now vs 2% during the dot-com bust.

That doesn't seem like a big difference, but when compared against a MUCH safer investment, the 10 year treasury, there's a huge difference.

10-year US bonds:

Now: <1%​

Dot-com: ~6%​

In the dot-com bust, you were taking a risk on companies barely earning anything for a meager 2.2% yield versus a 6% virtually guaranteed return in bonds! Now, you're lucky to get 1% on bonds versus 3% or better in stocks. Needless to say, it's not crazy to hear folks saying Amazon and Apple are better than bonds for storing your dollars.

To sum it up

Yes, TSLA is absolutely a performance outlier. However, unlike in the dot-com bust, investors are being forced to stick their dollars somewhere and mega-cap tech in the world's largest TAMs (total addressable market) is one of the best places to do that.

TSLA is:
- credibly competing in the two largest TAMs and arguably leading technology driven disruption in both
- TSLA's technology and business model has already proven economical -- an important distinction when comparing against dot-com businesses that were not economical
- led by a truly once in a generation level leader in his prime with decades of experience
- incredibly resilient having survived two MASSIVE economic disasters, one of which was the largest seen since the great depression and early in TSLA's existence

I don't have a crystal ball, but I can tell you that this valuation isn't irrationally exuberant by any means.

Since it's been almost a year since this post, here's how things have changed:

1. Nasdaq 5-year performance:

95 - 2000: +456%​

2015 - Dec 2020: +156%​

Current Trailing 5-year perf​

Oct 2016 - 2021: 177%​

​

2. Sampling of biggest individual performers:

95-2000 (avg 11x - 40x)​

Intel: +998%​

Cisco: +3,910%​

Oracle: +1,220%​

Microsoft: +1,600%​

​

2015 - Dec 2020 (avg 2.5x - 6x)​

Apple: +401%​

Amazon: +375%​

Netflix: +361%​

Facebook: +155%​

Zoom: +559%​

TSLA: +1,234% <---- Noteable exception I address at the end of the post​

Current Trailing 5-year perf - Oct 2016 - 2021 (vs 2015-Dec 2020)​

Apple: +385% (-16%)​

Amazon: +295% (-80%)​

Netflix: +517% (+156%)​

Facebook: +154% (-1%)​

Zoom: +309% (-250%)​

TSLA: +1,915% (+681%)​

3. P/E Ratios are still below the dot-com average: 44 vs 29-30ish

Current is now ~34

https://www.multpl.com/s-p-500-pe-ratio

4. Yields (TINA - there is no other alternative)

Current average earnings yields (E/P) are:

Dec 2020: ~3-3.3% (1/29.5)​

Dot-com: ~2.2% (1/44)​

Current (Oct 2021): ~2.9-3% (1/34)

Meaning, investors expect about a 3-3.5% 2.9-3% return for every dollar they put in a stock now vs 2% during the dot-com bust.

10-year US bonds:

Dec 2020: <1%​

Dot-com: ~6%​

Current (Oct 2021) 10yr yield is roughly 1.6%

To sum it up

Yes, TSLA is absolutely a performance outlier. However, unlike in the dot-com bust, investors are being forced to stick their dollars somewhere and mega-cap tech in the world's largest TAMs (total addressable market) is one of the best places to do that.

TSLA is:
- credibly competing in the two largest TAMs and arguably leading technology driven disruption in both
- TSLA's technology and business model has already proven economical -- an important distinction when comparing against dot-com businesses that were not economical
- led by a truly once in a generation level leader in his prime with decades of experience
- incredibly resilient having survived two MASSIVE economic disasters, one of which was the largest seen since the great depression and early in TSLA's existence

I don't have a crystal ball, but I can tell you that this valuation isn't irrationally exuberant by any means.

Has my conclusion changed in the last 10 months? No.

1. Bond vs Avg equity yields are still attractive for investors
2. Despite a large expansion of the money supply and huge supply shocks, valuations aren't going crazy across the board. Winners are being rewarded and losers are being punished generally.
   1. SPAC craze occured and is passing with many SPACS now being hammered (rightly)
   2. TSLA itself took a big breather this year after touching $900 down into the 500s
   3. Yes, there are still some valuations that are way too generous: NKLA, QS, LCID, Rivian's rumored IPO -- to name a few, but at least NKLA has been punished to somewhere at least kind of close to book value if you squint hard enough and see the big actors behind it

But what about TSLA's meteoric 5 year trailing +681% vs 2015-2020 performance?

Suffice it to say, TSLA is extremely unique. Led by a once in a generation (multiple generation?) leader, Elon, TSLA has accomplished feats not seen in decades and others never seen (SpaceX booster landings anyone?). However, the share price has not and still doesn't reflect the underlying growth of the company.

What mega cap stock is guiding for continuous 50%+ growth while posting operating margin beating AMZN (11% vs 7%) and gross margin likely surpassing 30% this quarter or next and a path to AAPL-like gross margin of 35%-45% within two years?

What would the historical chart look like in 2013 to now if the above was known then?

 

[inconel]

4. Battery overheats when driving/charging and which results in reduced power down to 50kw(67bhp). I am actually surprised because Sweden's ambient temp is 44F. How this car can function in the summer is anyone's guess.

In the winter go uphill, stay there and ski.
In the summer go back downhill to the beaches. Voilà !

 

[Nolimits]

I don’t know why I invest in anything besides tsla. The “competition” is really non existent.

 

[Curt Renz]

Could today being a federal holiday in the USA have caused lower volume / participation today?

That was undoubtedly a factor. Not only the US government, but also the bond market and most banks were closed today.

 

[UnknownSoldier]

Its indigenous peoples day in the US. (formerly known as Columbus day)

As far as I know it is still officially named Columbus Day.

 

[Curt Renz]

As far as I know it is still officially named Columbus Day.

Yes, although the president did acknowledge concerns: A Proclamation on Columbus Day, 2021

 

[jhm]

As far as I know it is still officially named Columbus Day.

But Leif Erikson Day is way cooler.

 

[RobDickinson]

Overall I don't even know how this is a competitor to ICE, nevermind a Tesla.

Theres a lot wrong with that tbh, but most/all could be fixed with a software update I guess.

Its worrying that it doesnt tell you about lacking power!

I know one UK ioniq5 owner they are going to be returning their car I think.

 

[Artful Dodger]

factory capacity Tesla already has in the works for model Y (~250k Fremont + 250k China

Giga Shanghai Model Y capacity reached 1,600 per day in August. That's over 500k per year.

1,600 cars/day * 339 days/year = 542,400 cars/year so 500k/yr is just 92% of nameplate capacity.

 

[ZeApelido]

I am actually surprised because Sweden's ambient temp is 44F. How this car can function in the summer is anyone's guess.

That is Sweden's summer.

 

[Singuy]

Theres a lot wrong with that tbh, but most/all could be fixed with a software update I guess.

Its worrying that it doesnt tell you about lacking power!

I know one UK ioniq5 owner they are going to be returning their car I think.

Look at that ancient arm based infotainment system. Software updates will break that car.

You can't software update crap battery management system away, nor can they update those chargers into working. One charger has been down for months. Others have yellow tape around them. This is suppose to be the best infrastructure next to Teslas according to people online.

 

[CorneliusXX]

Giga Shanghai Model Y capacity reached 1,600 per day in August. That's over 500k per year.

1,600 cars/day * 339 days/year = 542,400 cars/year so 500k/yr is just 92% of nameplate capacity.

Thanks, It's hard to keep up with Tesla's pace of innovation even just as an investor - let alone a competitor. Imagine selling your shares now

 

[RobDickinson]

Look at that ancient arm based infotainment system. Software updates will break that car.

You can't software update crap battery management system away, nor can they update those chargers into working. One charger has been down for months. Others have yellow tape around them. This is suppose to be the best infrastructure next to Teslas according to people online.

The chargers are a problem, there shouldn't be that many broken, but unlike the SC network these are show ponies meant to make headlines and appease the green brigade rather than work and charge cars.

I'm surprised at the quality of the ioniq entertainment system seemed very laggy etc.