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

[lafrisbee]

So the "product roadmap" update was essentially "everything that is delayed is still delayed and even more so...and maybe, possibly we finally get to level 4 FSD this year."

This is what was so important that Elon felt he had to come back to an Earnings Call to explain? He said he'd be done doing ECs unless there was a major update, took *one quarter* off and that was it?

The oddest bit of elon over the past month has been how when someone asked a question about the Cyber(nota)truck he would give some clues about how great the final version is. And then cut himself off saying, "You are just going to have to wait for the Earnings call. I don't want to give all the good stuff away right now."
I know that the stock is going to do alright eventually. My focus in the earnings call was to hear about the good bits concerning the Cyber(nota)truck.

 

[StealthP3D]

View attachment 760901
Damn Elon
Yesterday he told us that Tesla would grow more than 50% this year with Fremont and Shanghai alone.
My 2022 model assumed only 42% growth at Fremont/Shanghai combined.

I know it's not what Elon exactly said, but what I think he meant was that planned upgrades to Fremont and Shanghai can easily bring production capacity by mid 2022 of the two existing plants to 150% of 2021 production. I think actually hitting that number without any contribution from Austin or Berlin might be difficult. Elon sometimes speaks in imprecise ways, particularly when he knows, for example, that there will be enough contribution from the two new plants that actual results will handily beat 150% of 2021.

I could be wrong but that's kind of how I interpreted his comment. It was a way to take the pressure off the need to have fast ramps of one or both of the new plants.

 

[phoggy123]

Cybertruck isn't being delayed due to parts shortages and logistics. It's because there is still a lot of engineering that needs to be done. Elon said it has a lot of new technology and they are still figuring out how to make it work in a way that is affordable.

He said "Even if we wanted to put a new product out, we would not make anymore vehicles than they do today" Doesn't matter if its batteries or chips, when you steal one part to make a another car....the pie doesn't get any bigger. They specifically mentioned seat adjusters as one instance.

 

[betstarship]

I know it's not what Elon exactly said, but what I think he meant was that planned upgrades to Fremont and Shanghai can easily bring production capacity by mid 2022 of the two existing plants to 150% of 2021 production. I think actually hitting that number without any contribution from Austin or Berlin might be difficult. Elon sometimes speaks in imprecise ways, particularly when he knows, for example, that there will be enough contribution from the two new plants that actual results will handily beat 150% of 2021.

I could be wrong but that's kind of how I interpreted his comment. It was a way to take the pressure off the need to have fast ramps of one or both of the new plants.

something something barring supply chain shortages...

 

[MTL_HABS1909]

The oddest bit of elon over the past month has been how when someone asked a question about the Cyber(nota)truck he would give some clues about how great the final version is. And then cut himself off saying, "You are just going to have to wait for the Earnings call. I don't want to give all the good stuff away right now."
I know that the stock is going to do alright eventually. My focus in the earnings call was to hear about the good bits concerning the Cyber(nota)truck.

Exactly. That’s why this was one of the strangest calls in Tesla history. Literally none of us could have predicted how it actually went. Pretty nutty.

 

[Chunky Jr.]

One other possible temper tantrum by the market is over remarks by Elon about challenges with making Cybertruck affordable with all the new technology. They could interpret this as a risk to the CT program and that it may not ever ship, or that CT will be too late given Rivian and others. Personally, I don't agree, but the market is even dumber than me.

 

[Wooloomooloo]

1) no $25K car. They were expecting this to get to 20M/yr volume and don't understand that it might not be necessary

No was was expecting this - the "industry consensus" on this (if you remotely care what Wall St thinks anyway) is 10m/yr by FY30. It's fair to say that's conservative, but Tesla may very well simply leave the lower end of the market to the likes of Skoda, Chrysler, Hyundai etc. If and when they do introduce a $25k car it'll be 2025 or beyond.

The other things you said are fair, but Cybertruck's delay wasn't news at all so likely had zero impact, unless people have been in a coma for the last quarter.

 

[Artful Dodger]

Between 2019 and yesterday’s earnings call, things did not “go well.”

That's irrelevant. The OP asked why people are expecting a $25K compact car within the next 2 years. The answer is because that is what Elon told us. If things change, provide an update. Simple principles of messaging.

 

[FreqFlyer]

Has this been shared? Looks like a San Antonio win is close.

Musk’s Boring Co. a finalist in S.A. transportation project

Alamo Regional Mobility Authority will consider two proposals for projects to carry...

www.expressnews.com

Hopefully only if Tesla includes MPVs into the bids and not running Tesla 3s.

 

[StealthP3D]

And before some of you scream: but HODL, there are a tremendous amount of retail investors that are HODL'ing and doing options for income that are massively affected by this.

You say that as if you are owed success on your option gambles. My take on management's responsibility is to increase long-term shareholder value even if it comes at the expense of short-term share price bumps.

And I will state the obvious and say if you are making options bets with the goal of creating income, but you don't have positive returns, then the fault lies with the particular bets you are making, not with the company's creation of shareholder value. If you do have positive returns, but they are not as high as you would like, the fault is also yours. The company is not responsible for your gambles, and they have no fiduciary duty to people who only have options to become shareholders. There is not an options contract out there that makes you a bonafide shareholder until after the fact. And Tesla is under no obligation to represent shareholders non-shareholder interests. Given these realities, I'm not sure what your point is.

 

[CitizenKane]

Elon's unfiltered responses are a big negative in the context of an earnings call where most of the questions tend to be short term oriented. He would do retail investors a big favor by limiting his participation to annual share holder meetings and product unveils/technology demos. Zach would have framed the responses much better which would have limited the FUD

Many people here seems to want a more regular public company CEO who spends a lot of energy on influencing short term share price. As a long term investor, I do not care much about that. Musk is a maverick and an amazing entrepreneur with some obvious flaws, in my view, but that he does not seem to care much about how his words influences short term share price I find rather liberating.

 

[Wooloomooloo]

FSD like Mars seems borderline fantasia to the market.

FSD is very real and widely recognized. Full scale driverless Robotaxis (which has been "next year" narrative since 2014) is definitely seen as fantasia - it's important not to conflate the two.

The reality is, on Robotaxis, it doesn't matter. I don't think anyone is buying a Tesla today with the expectation it will become a driving ATM in the future acting as an autonomous Uber. Unless you want to confess something?

 

[LiveLong&Profit]

I think they do, as the mission is to accelerate the advent of sustainable transportation, so I'm thinking they need to hit a run rate of 10 to 15 million/yr to saturate the market in 10 years, assuming robotaxi is launched by late 2024.

There, I've gone on record!

Also, consider the backup plan:
What if in 2-3 years FSD is very good, and much safer than the average driver.
BUT - still gets confused and stuck from time to time. And it still might make odd choices once i a blue moon.
It is not flawless - there will be accidents and metal gets bent from time to time.
But - because FSD though not perfect in this scenario is still really good and also the fact that Tesla's are very safe vehicles, the accidents are not fatal, but mostly just fender-benders.

The thing is: Having remote drivers or safety drivers might actually work very well with regulators: Then there are humans to blame instead of 'killer machines'.

Enter remote safety or backup driving.
Powered by low latency StarLink rolled out globally by around 2025.
And an army of remote drivers.
Costly? Yes - very. But the profits of "almost FSD" can sustain that. And the costs will decrease over time per mile driven, since FSD (hopefully) will continue to improve.

There: I've gone on record too

 

[Cape Coddess]

Geez... Just got back from a gym and a swim and the top two rungs of my brand new buy ladder are totally missing. And Tesla is all over cnbc. What on earth is going on...?
I need to catch up a few pages.

 

[Chunky Jr.]

The other things you said are fair, but Cybertruck's delay wasn't news at all so likely had zero impact, unless people have been in a coma for the last quarter.

The news that was different was about the challenges in making it affordable. It's not like it is done and just waiting for the green light. There's still significant engineering needed that some could view as a risk to the product.

I agree that market wasn't expecting 20m/yr. I used that as short hand for "very high volume".

 

[ZachF]

Golly!
Every? other OEM is reporting that can't make their current products and people are complaining that Tesla reported that, while they are going to make 50% more of their current product next year, they are waiting a year to introduce the new product lines.

2022 will get the kinks out of the new lines. Execution will exceed. Launch will be orbital.

Elon promised a bunch of new details on new products on this ER, implying this was basically the only reason he’d be there, then devoted ten seconds to say there’s no new products this year.

It’s not surprising the market is reacting negatively TBH.

 

[OrthoSurg]

You thought today was going to be a green day after the 3% dump after Elon said FSD being the main driver of growth post 2024? The only thing keeping us from gap filling at 843 right now is good macros.

I thought the dump of 3% AH was it about the FSD.
then wallstreet would realize the 50% growing profits without FSD. Compute this and buy.
Elon said they would have a confortable 50% growth for the next year. He did not say « we would have had a 50% growth if we made a $25k car that we are not working on right now »

instead we have a bear raid instead of riding with the macros and NFLX. while NFLX announced 4% growth while TSLA announced 50% growth.

This is nonsense.

 

[betstarship]

Elon promised a bunch of new details on new products on this ER, implying this was basically the only reason he’d be there, then devoted ten seconds to say there’s no new products this year.

It’s not surprising the market is reacting negatively TBH.

He said a product roadmap update. We all definitely got the update.

One more thing: a CEO that doesn't give a crap about investors (and is incredibly successful with bringing on resources while focused on mission and execution thereof) is A-OK in my book.

 

[Nocturnal]

It's easy to forget that a low valuation is powerful bait for attracting top talent. Even in an era of part shortages, the biggest limiting factor to Tesla's long-term growth is a lack of enough smart, capable people. Telsa's wages are only industry-leading once employee stock options are considered. Smart people get this. A lower share price could easily be the difference between an individual deciding to take the plunge and diving head-first into work at Tesla vs. taking the easy way out and living on the earnings from their last lucrative job or remaining where they are. A low share price makes Tesla a much more attractive place to work. It is also powerful incentive for people already integrated in Tesla to remain.

It's counter-intuitive but a low share price is actually very good for Tesla's long-term trajectory. And this is really an important turning point for the company in terms of transitioning into the next phases of their growth. You can't bring successful new products to market in ever-increasing numbers without an ever-increasing supply of human talent, Tesla's most limiting factor.

But is a struggling share price the same as a low share price?

 

[Chunky Jr.]

here are some of the headlines I'm seeing on Apple's Stocks app...
"3 takeaways from Tesla's big quarter"
"Tesla delivered a fantastic quarter despite supply-chain issues, says former Tesla sales president"
"Tesla dazzles analysts with profit marks, Austin ramp and 4680 developments"
"Tesla’s Earnings Beat Was Better Than You Think. Here’s Why."
"Tesla posts record profits as its deliveries soared in 2021"

Sellers are whack.