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

[Ocelot]

If FSD works, one Robotaxi EV retires up to 10 ICE

See this is what I do not get.
How?
Imagine someon approached you, and said I think you and nine neighbours should just use this one car instead. It will be available for the most part with minimal to no wait. Would you do that? I can’t see a fast shift in this at all.

An then there is the peak time problem..ie going to and from work, where you might have to wait.

I feel many here envision being the owners of this taxi service rather than the users.


If this shift happens significantly in the next 5 years I will be shocked. I am thinking a moderate sized shift away from personal vehicles over the next twenty years.

 

[NicoV]

and I'm glad they are not working on the $25K car, but for me this was a very disappointing call.

Tsla absolutely needs the $25K car for europe, it’s absolutely needed in our cities. They’ll probably sell a lot of these with all options at $40K.

 

[MikeAtkinson]

I don't get the obsession some have with the $25k car. If Tesla is already selling everything they can make at maximum production capacity, why should they produce lower margin variants rather than the higher margin ones? Either case advances the mission about the same. Isn't this the *investor's* thread?

If there comes a time when they have more capacity, I'd like to see the CT, semi, and even roadster. If demand for those and existing model variations can saturate Tesla's production capacity into 2024, I'm all for that. In the meantime, manufacturing at capacity with fewer models is a great thing.

As an investor I could not agree more. Demand for Model 3 and especially Model Y is exceedingly high, I see no reason why they could not sell 4 million per year between them. That is enough to keep the current factories at full stretch into 2024. There are still several demand levers waiting to be pulled if demand softens. It might even be possible to reach Toyota/VW levels of production with just those two models.

Massive production volumes on only a few models have several advantages:
1. economies of scale - each doubling of production rate reduces costs by a significant amount (often about 15%) [1]
2. the learning curve (wrights law) - doubling of accumulative production reduces cost by a significant amount (again often 15%) [1]
3. Marketing can be concentrated on only those few models.
4. Multiple factories producing them mean that logistics and tarrif costs can be minimised.
5. It is easy to cost effectively maintain multiple parts suppliers for every part.
6. the curse of the parts bin is lifted - whether to a common part between models or to use more efficient model specific parts can be made on a engineering basis.
7. ramping an existing model at a new factory, or adding a line, is much easier than introducing a completely new model.

Given those advantages we as investors should be very happy that Tesla are concentrating on only a few models.

[1] unfortunately the reductions are not additive, combined the reduction is only a bit more than 15%.

 

[raffiniert]

Tsla absolutely needs the $25K car for europe, it’s absolutely needed in our cities. They’ll probably sell a lot of these with all options at $40K.

I didn't know european cities were especially financially constrained. I always thought they would - at best - be constrained in parking sizes ;-)

On the other hand, at least in Switzerland, most of the huge SUVs reside in an urban environment and seldom get to see a dirt road.

Tsla absolutely needs the $25K car for europe

And I especially disagree with this. "TSLA" as "the stock" for sure does not need a lower margin car while they can sell all they can provide of the higher margin cars. "Tesla" as "the company" also does not need it for the exact same reasons.

When the day has come, a cheaper Tesla will arrive. The time hasn't come yet and I think this is a good sign.

 

[Thekiwi]

:

- really don’t get why Tesla didn’t use tax allowance in Q4 when they knew they were going to get hit with that tax bill. Seemed like a good time to counter balance one time items

I don’t think Tesla can just choose to claim the tax allowance whenever it suits them to smooth out earnings. IIRC it would be up to their auditors to agree when it meets the requirements, which I don’t think can be done from a conservative viewpoint yet.

 

[elasalle]

So no FSD in Rome, then? Because 3/Y WILL NOT fit on their streets. Think this though: FSD is software which will run on ALL vehicles made by Tesla, from Semi down to the smallest car.

The only feasible alternative is licensing FSD to a automaker for their small car, but Tesla has a track record of literally ZERO success in technology transfer. Not thought through yet into a workable business.

Car cost and car size are 2 independent concepts.

Sure other form factors will be released. Smaller models from China and hatch back etc from Berlin

Elon commiting to solving FSD but not to a car that will cost 25K. With FSD the car becomes a work-horse and utility increases 5 fold so price can remain higher

Remember the model 3 base price and standard range car which was never really available— so why commit on price? More lessons also learnt from recent inflation and price increases

Cheers!!

 

[MikeAtkinson]

I also think a 25K Robotaxi is even better than a 35K Robotaxi, but I admit the difference is cost isn't that significant over 10-15 years and the difference in size is probably something most people could live with, as many taxi's are as big as a Model 3, or bigger.

A robo-taxi should have the following qualities:
1. million mile life - not just the battery
2. premium interior
3. easy to clean - inside and out
4. great sound and infotainment system

All of these are probably difficult to achieve in a $25K Robotaxi.

 

[wooter]

Tsla absolutely needs the $25K car for europe, it’s absolutely needed in our cities. They’ll probably sell a lot of these with all options at $40K.

I see no way to build a 25K car worthy of the Tesla name. Tell me what you'd skip from the Model 3 Standard to get to that price range. 25kWh battery? 10" tablet? Manual adjustable seats? 25% size reduction? Would that be enough to make the car cheap enough? And would a separate production line for manual seats, 10" tablet and downgraded software actually be cheaper?

Even European car brands have trouble reaching that price point without compromising. The Renault Zoe/Dacia Spring have abyssal crash ratings, and VW has stopped production of their supermini e-UP and badge engineered derivatives.

 

[wooter]

A robo-taxi should have the following qualities:
1. million mile life - not just the battery
2. premium interior
3. easy to clean - inside and out
4. great sound and infotainment system

All of these are probably difficult to achieve in a $25K Robotaxi.

There's a good reason a lot of German taxi's are Mercedes', and not the cheapest East-European car on the lot.

 

[MikeAtkinson]

I think no 25k is him managing customer expectation. If plan is revealed now, a lot of ppl would hold off buying 3/y and wait for the 25k. I’m pretty sure the project is going in stealth mode inside Tesla

They probably have a smaller hatchback in the works, it won't be $25K, probably $5K under the cost of a Model 3.

Tesla will concentrate on a low total cost of ownership, not selling price. It will probably have a premium interior, excellent sound and infotainment system, and very high crash safety (which prevents it being very small). Possibly with a (optional?) HEPA filter instead of a trunk as the cities it is designed for have high pollution levels.

 

[jeewee3000]

Just got through the earnings report, earnings call and TMC thread.

My main takeaway is that my investment in Tesla is the best place for my money to be. All I see is growth and potential in the four pillars of Tesla:
- automotive (and manufacturing)
- energy generation and storage
- FSD
- AI / Optimus

They will look for and possibly announce other factory locations this year. That's more than one. So expect two at least (they have the money for it). These can be built during 2023 so by the time Austin and Berlin get up to speed (early 2024) we could see two new locations starting their ramp.

How some analysts can hold on to their delivery estimates for 2022-2025 is beyond me.

The longer it takes for the market to figure out what a giant Tesla is and will become, the more shares we can acquire.

Enjoy the ride. My kids are 3 and 5 years old. When they're teenagers I'll tell them tales of how I was there with Tesla from the beginning.

Exciting times lie ahead!

 

[wooter]

See this is what I do not get.
How?
Imagine someon approached you, and said I think you and nine neighbours should just use this one car instead. It will be available for the most part with minimal to no wait. Would you do that? I can’t see a fast shift in this at all.

An then there is the peak time problem..ie going to and from work, where you might have to wait.

I feel many here envision being the owners of this taxi service rather than the users.


If this shift happens significantly in the next 5 years I will be shocked. I am thinking a moderate sized shift away from personal vehicles over the next twenty years.

It's not about your nine neighbours.

It's about your 900 neighbours, who will decide that instead of driving their kids to school themselves, they just call a robocab.

And then decide that having 2 cars on the driveway is stupid, so sell one (or put one in as a robocab) and have mom drive to work in a robocab.

And then decide that the single family car is quite expensive to just park on the driveway, and sell it and then also dad uses a robocab to go to work.

We won't end up in 5 years at the last step, but it might go quicker than 20 years.

 

[MikeAtkinson]

- clearly Tesla shooting for 1.5-1.6 million deliveries for 2022.

There are what I consider credible rumours that Tesla are aiming for 2 million production for 2022, they will probably miss that due to chip supply constraints and the difficulty of ramping Austin and Berlin.

 

[CorneliusXX]

For a bunch of smart people, some of you are kinda dumb. It’s as plain as the nose on your faces what the future looks like, yet you’re too busy being angry and upset for one reason or another. Pity.

So, the cat is now accepting handwritten double spaced essays of no more than five pages in length as to why it should leave you its fortune in its will.

I don't need 5 pages

1. According to many comments here Tesla has gone to the dogs
2. See avatar

QED

 

[NicoV]

I see no way to build a 25K car worthy of the Tesla name. Tell me what you'd skip from the Model 3 Standard to get to that price range. 25kWh battery? 10" tablet? Manual adjustable seats? 25% size reduction? Would that be enough to make the car cheap enough? And would a separate production line for manual seats, 10" tablet and downgraded software actually be cheaper?

Even European car brands have trouble reaching that price point without compromising. The Renault Zoe/Dacia Spring have abyssal crash ratings, and VW has stopped production of their supermini e-UP and badge engineered derivatives.

Not necessarily at 25K. It might as well be at 40K. I was referring to the 25K car as the model smaller than the Model 3. Irrespective of price, a smaller car is more convenient in European cities. I’m considering buying a roadster just to get rid of the anxiety of driving (and even more: parking in old parking garages) my Model S in our cities. But that is not feasible for most people.

 

[wooter]

Not necessarily at 25K. It might as well be at 40K. I was referring to the 25K car as the model smaller than the Model 3. Irrespective of price, a smaller car is more convenient in European cities. I’m considering buying a roadster just to get rid of the anxiety of driving (and even more: parking in old parking garages) my Model S in our cities. But that is not feasible for most people.

A Model 3 is similar sized as a previous generation BMW 3 series. They're comfortable, but not big, nor compact.

A ID.3 sized Tesla with Tesla features would still cost similar, would not gain additional revenue that's now left on the table but would just slow down production.

And there is the real possibility that Elon and Tesla are pulling a reverse Osborne: by saying that they aren't working on a compact car, people will not wait for a compact Tesla and just go for a Model 3.

 

[Sunlight]

As a small time investor (for 7 or 8 years - early in, last out...) I understand and am happy with the direction Tesla is taking however 'unexciting' it is.
It makes sense and is driven by a quite bright visionary backed up by a brilliant team. 4-D chess and all that.

I like that Tesla stays a 'premium' product and leavers the cheap and cheerful stuff to other car manufacturers - there's little meat on that bone. I can't see how a small and/or cheaper car helps Tesla?! For now.

In any event there are still a huge number of demand levers that can be pulled with less disruption to the existing status quo than introducing whole new products and production lines. These include:-

Wider choice of colours - interior and exterior
More up-market interiors (HUD; driver screen; improved perceived quality etc)
Air suspension on the 3 and Y (maybe - I read lots of reviews where the poorest part of the 3 and Y is the ride quality....true?)
Overall perceived quality (this is on-going and it'll be nice when Teslas are seen as superior to the German brands by the public - I believe the hidden build quality is as good/better already)
Hatchback version of the M3 (this would broaden its appeal enormously and there will be a time when 'stealing' sales from the Y does not matter)
Station wagon version of the M3 (could be very popular beyond America)
Cabrio M3?? Ditto MS
Boxy/wagon version of the MY - then a van version of this MY?
Similar logic when the Cybertruck arrives
Price reductions as required to keep up demand if needed
Advertising!!! (no I'm joking - lets get to 10 million cars per annum without ever having advertised!)

Cheers to the Hodl'ers

 

[MC3OZ]

See this is what I do not get.
How?
Imagine someon approached you, and said I think you and nine neighbours should just use this one car instead. It will be available for the most part with minimal to no wait. Would you do that? I can’t see a fast shift in this at all.

An then there is the peak time problem..ie going to and from work, where you might have to wait.

I feel many here envision being the owners of this taxi service rather than the users.


If this shift happens significantly in the next 5 years I will be shocked. I am thinking a moderate sized shift away from personal vehicles over the next twenty years.

The fleet does need to be oversized for peak times.it all depends on how long each trip is etc, and the distribution of trips over the day.

Some jouneys are in the middle of the day, or night.

Software can predict where cars are likely to be need in advance before they are even ordered.

I remember the claim 10 from somewhere, if peak travel is 3 hours and trips last on average 30 mins, that number might be more like 6.

For starters ICE taxis and other high milage vechicles have will be replaced early.

 

[wooter]

The fleet does need to be oversized for peak times.it all depends on how long each trip is etc, and the distribution of trips over the day.

Just like Uber: rates go up during peak times.

But also: if you get a subscription to get you to work every morning, you can have more beneficial rates, and the network can adjust to demand better, because they know of customers that are already paying.

 

[WarpedOne]

The fleet does need to be oversized for peak times.it all depends on how long each trip is etc, and the distribution of trips over the day.

Not really ... peak time traffic includes traffic that need not happen at peak time.
Adjust (rise) peak time prices and some part of traffic will move to other times, lowering the top and raising the bottom.
Better utilization.