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

[jkirkwood001]

If you live long enough it becomes almost impossible to not be jaded and cynical.

Then why are you following Tesla?
Why do you believe in Elon?
Surely his goals are about what we can do, not why it's useless to believe in what's possible, right?
I disagree on your outlook on life. Elon's optimism has been what's got us this far. "Don't give in to the dark side!"

 

[jerry33]

I understand your point about the commoditization of dealerships, but not why OEMs can't raise prices. Say Ford raises the price of the Mach-E $10,000. Ford would get $10,000 more income, and the dealership will get the std profit from new MSRP, plus 'only' $10,000 of the $20,000 they have been surcharging consumers over MSRP. The dealership is still making a killing on the Mach-E - why would they stop selling it?

What am I not understanding?

Ford might do the same on their whole lineup (every time they ship a new model). The dealers know their days are numbered and they are trying to make that number as large as possible.

 

[Unpilot]

Then why are you following Tesla?
Why do you believe in Elon?
Surely his goals are about what we can do, not why it's useless to believe in what's possible, right?
I disagree on your outlook on life. Elon's optimism has been what's got us this far. "Don't give in to the dark side!"

My outlook on life is that there is unimaginable progress ahead.
The opportunity for boundless cheap clean energy and all that would bring gives me great hope.

The crap show that we see everyday as politicians do what politicians do confirms I am right to be cynical.

The " ratings" agency's that continue the game of pay to play confirms I'm right to be jaded...I've had a bit much watching that show.

But you do you.

 

[MD70]

Ford might do the same on their whole lineup (every time they ship a new model). The dealers know their days are numbered and they are trying to make that number as large as possible.

According to this article dealers are increasing the price of all vehicles due to a shortage and the fact that people seem willing to pay extra.
He mentions the contrast with Tesla’s business model briefly.

The WOLF STREET F-150 XLT and Camry LE Price Index, Model Year 2022 Update: This is the Craziest Situation I’ve Ever Seen | Wolf Street

 

[WattsHappening]

*ahem* POTUS?

In my mind, it's less corruption and more that the government concludes that Tesla won't need any help being successful, but that the OEMs do. I don't subscribe to the government-is-useless-save-my-tax-dollars point of view (maybe it's because I'm Canadian), but part of the President's job is to help American companies that need help, no? Therefore his messaging is about magnifying the potential for the at-risk OEMs (his messaging went way too far off truth, but the intention was good). For Tesla, as long as he gets out of the way and doesn't actively impede, he's trying to do his job. Optimistically, in the big picture, we want more EVs to replace ICEs, right?

Yes, I make a lot of lemonade in life, don't shoot me. I'm representative of half of this forum that aren't cynics! (cue @Krugerrand)

Awww, bless your heart.

Yes, I'm a cynic.

 

[thx1139]

I disagree. I strongly think that Elon's trolling Biden.

Now I am a Biden supporter and I believe I know what Biden is doing, believe he feels he has to because of the other side. Still this is trolling of Administration by Elon and I think he should go real big. I think Elon should make a very public invitation to the opening of Giga Texas.

"Elon Musk formally invites the President of the United States to attend the grand opening of the Worlds largest Electronic Vehicle manufacturing facility."

 

[ZeApelido]

FSD 10.5 finally coming

https://twitter.com/x/status/1462918248756760580

 

[kanweg]

*ahem* POTUS?

In my mind, it's less corruption and more that the government concludes that Tesla won't need any help being successful, but that the OEMs do. I don't subscribe to the government-is-useless-save-my-tax-dollars point of view (maybe it's because I'm Canadian), but part of the President's job is to help American companies that need help, no? Therefore his messaging is about magnifying the potential for the at-risk OEMs (his messaging went way too far off truth, but the intention was good). For Tesla, as long as he gets out of the way and doesn't actively impede, he's trying to do his job. Optimistically, in the big picture, we want more EVs to replace ICEs, right?

Yes, I make a lot of lemonade in life, don't shoot me. I'm representative of half of this forum that aren't cynics! (cue @Krugerrand)

Not a member of the there-is-nothing-useful-a-government-can-do club either, but from my perspective Ford, GM etc were and aren’t eager to go the EV route despite the insane margins Tesla makes. That is because the change is hard and difficult. Paying/bribing legacy will not make it less hard to solve the technical and logistical problems. The RoRo load of money Tesla makes wasn’t enough to convince them; more money is not really much more effective.

 

[jerry33]

Not a member of the there-is-nothing-useful-a-government-can-do club either, but from my perspective Ford, GM etc were and aren’t eager to go the EV route despite the insane margins Tesla makes. That is because the change is hard and difficult. Paying/bribing legacy will not make it less hard to solve the technical and logistical problems. The RoRo load of money Tesla makes wasn’t enough to convince them; more money is not really much more effective.

While true, the bill as I understand it (it changes so often that I might not be up on the latest) basically lets them keep the status quo by incentivizing hybrids and so slowing the growth of BEVs.

 

[Ogre]

While true, the bill as I understand it (it changes so often that I might not be up on the latest) basically lets them keep the status quo by incentivizing hybrids and so slowing the growth of BEVs.

Your comment is somewhat true, but hybrids are a trap. Both for buyers and for automakers.

Buyers won’t realize the gains that EVs offer. They won’t enjoy lower maintenance, lower cost of operations, home charging will only be a half benefit, they still have to go to gas stations. People already prefer BEVs to PHEVS and that preference is only going to grow.

It’s a trap for auto makers because they are investing in dead end technology while Tesla and other BEV makers slowly demolish the ICE industry. There are some easy low hanging fruit type benefits they can get, but within a few short years Tesla is going to be cranking out cars and trucks which are less expensive than ICE cars. And hybrids are even more expensive than pure ICE cars. The result will be Tesla eating the industry as quickly as they can ramp up.

The only change auto makers have of surviving the decade is by doubling down on EVs. Trying to profit maximize in the short term by cranking out PHEVs is going to look good in the very near term, but within 3-5 years will prove to be incredibly foolish.

 

[PeterJA]

From ARK Invest's free weekly newsletter today (apparently not copied to their website):

​

ARK’s Research Suggests That Tesla is Three Years Ahead of the Median Electric Vehicle​

By Sam Korus | @skorusARK Analyst​

ARK has created an EV Performance Index (ARK EVPI) that incorporates range, drivetrain efficiency, and total cost. Currently, the median EVPI among EVs has hit that of Tesla’s Model 3 circa 2018, as shown below. That said, in general EVPIs have improved since the Model S circa 2013. Based on Wright’s Law, the ARK EVPI suggests that EVs should continue to improve with each cumulative doubling in production. These improvements could materialize in any of a number of ways: faster charging, longer range, and/or lower prices.​

 

[ThisStockGood]

Not that it would surprise me:

https://twitter.com/x/status/1462849503359160323

 

[CorneliusXX]

Why does it take so long to be upgraded to investment grade?

From this article it seems like it could still be up to a year away...

Anyone have constructive insight into this timeline?

Tesla Is the First Junk-Rated Company to Get a $1 Trillion Valuation

www.bloomberg.com

The valuation milestone comes after S&P Global Ratings on Friday upgraded Tesla’s long-term rating to BB+ from BB. The ratings agency said it expects the company’s deliveries and earnings to remain strong over the next few quarters.
“S&P’s recent upgrade of Tesla has the auto manufacturer knocking on high grade’s door, and we expect the company to cross over to investment grade within the next 12 months, opening up the potential for further financial product offerings,” Levington said.

The short answer is that there is not necessarily any impetus for another review until the next annual review in 12 months time. S&P (the ratings agency, not index manager) tend to do annual reviews only unless there is very big news, or if there is a capital markets transaction occurring (debt raise or equity raise) for which S&P would be hired to rate.

We see Moody's do a periodic review every year or so. Moody's also will review the company when they review the auto loan securitisations (for which Tesla will pay Moody's). You can see the latest upgrade on 25th March this year coincides with timing of the first securitisation this year. There was a second Tesla auto loan securitisation in September this year, however Moody's didn't make any ratings action announcement at that time.

 

[elasalle]

Japan to double EV subsidies to match U.S. and Europe

Tokyo races to spur buying of electrics by aiding charging infrastructure

asia.nikkei.com

Japan will double its purchase incentives for electric vehicles to as much as $7,000, on par with similar measures in the U.S. and Europe, and subsidize charging infrastructure as Tokyo looks to catch up with other major advanced economies.

(includes hybrids/fuel cells though ..)

 

[Ogre]

Not that it would surprise me:

https://twitter.com/x/status/1462849503359160323

I’d take any estimates of Cybertruck pre orders with a huge grain of salt.

We can be pretty confident the number is high enough Tesla will be busy filling their pre-orders for several years. And assuming it meets all it’s promises, will continue to be popular for years after.

 

[RobDickinson]

That order number is used across all tesla cars afik, its a pointless incorrect number.

 

[Krugerrand]

Then why are you following Tesla?
Why do you believe in Elon?
Surely his goals are about what we can do, not why it's useless to believe in what's possible, right?
I disagree on your outlook on life. Elon's optimism has been what's got us this far. "Don't give in to the dark side!"

Show us another Elon. I’ll wait -

If the world consisted of a significant percentage of Elons, nay, at this point I would accept just 10%, then I could have my mind changed.

I have no issue with your point that a certain world leader is doing his job and helping that/those car mfg/s that need the help.

Here’s my issue; he just rewrote the entire last decade of automotive history, spitting on thousands of American workers that were part of that history, and handed their accomplishments to someone else.

For just a second put yourself in the shoes of a 10 year veteran Tesla employee who a) took a risk quitting a previous job, b) who maybe pulled up stakes and moved to California from another state c) who’s sacrificed family life/relationships to work insane hours for the good of all and the leader of the country just handed that person’s accomplishments to someone else.

It would be different if the guy stood up there and said; ‘Mary, you and your company need help, and America is here to help you help us combat climate change by transitioning to sustainable transport.’

I admire Elon’s super power to just brush off what’s happened, laugh at it, and forge ahead. Me, not so much.

I follow Tesla because it gives me hope. Without hope, there’s nothing.
I believe in Elon because he’s proven through action he can be believed in.
None of that changes the fact we are a cesspool of self-centered, greedy, lying, stupid genes.

 

[jerry33]

Your comment is somewhat true, but hybrids are a trap. Both for buyers and for automakers.

Buyers won’t realize the gains that EVs offer. They won’t enjoy lower maintenance, lower cost of operations, home charging will only be a half benefit, they still have to go to gas stations. People already prefer BEVs to PHEVS and that preference is only going to grow.

It’s a trap for auto makers because they are investing in dead end technology while Tesla and other BEV makers slowly demolish the ICE industry. There are some easy low hanging fruit type benefits they can get, but within a few short years Tesla is going to be cranking out cars and trucks which are less expensive than ICE cars. And hybrids are even more expensive than pure ICE cars. The result will be Tesla eating the industry as quickly as they can ramp up.

The only change auto makers have of surviving the decade is by doubling down on EVs. Trying to profit maximize in the short term by cranking out PHEVs is going to look good in the very near term, but within 3-5 years will prove to be incredibly foolish.

Agreed, but based on past performance and the short term expectations of Wall Street (and the executives' bonuses of course), that's likely the road they will take.

 

[Ogre]

If the world consisted of a significant percentage of Elons, nay, at this point I would accept just 10%, then I could have my mind changed.

Lets get real here, if 1% of the populations was like Elon, we’d live in a completely different and better world. It would be transformative.

Here’s my issue; he just rewrote the entire last decade of automotive history, spitting on thousands of American workers that were part of that history, and handed their accomplishments to someone else.

He wrote a speech. A bad one.

In 2 years nobody will remember it. In 5 years the auto industry is going to look so different that nobody will believe someone suggested it. In 20 years it’s likely GM will be a footnote in the history books.

Tesla employees might feel a little slighted, but I’m sure any early Tesla employees will be crying all the way to the bank.

All that speech did is make one dude look like an ill prepared politician.

 

[Ogre]

Agreed, but based on past performance and the short term expectations of Wall Street (and the executives' bonuses of course), that's likely the road they will take.

It wouldn’t surprise me.

But even so, how long is Wall Street going to tolerate that nonsense? 2 years? 3 years?

The rate which Tesla is eating the industry is accelerating. I don’t see investors ignoring that for much longer. When the Cybertruck comes out and Tesla starts shipping 250,000+ trucks a year, that’s going to be a big red flag. These companies can only use COVID and chip shortages as excuses for so long before investors catch on that the decline in sales is permanent.