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

[thx1139]

I think it's due to a paradigm shift from one that was understood to one that is uncertain.

The master plan was:

• Roadster fund Model S & X
• Model S&X fund Model 3&Y
• Model 3&Y fund the mass market car

Bullet point number 3 has suddenly changed to Models 3 & Y become some popular due to FSD we don't need the mass market car anymore. As far as the market is concerned, FSD isn't a sure thing and Elon's timelines aren't credible. This uncertainty isn't good for share price. My guess is we're stuck (under 900) until Tesla proves FSD.

The actual words from the Tesla Master Plan, Part Deux

1. Create a low volume car, which would necessarily be expensive
2. Use that money to develop a medium volume car at a lower price
3. Use that money to create an affordable, high volume car

 

[thx1139]

The Hertz sticker....

Damn 55 year old eyes

 

[dhanson865]

so minor a win but I'll take it, I randomly had 90 cents more than the closing price and got a share very nearly at the low price of the day.

View attachment 761161

Just a lucky trade, call it cost averaging if you will, I had some money available, I bought. The highest I've bought in the last year was 1,148.54 in my roth, the highest trade before that was 999. If this thing is going to 10x from here I don't care about trying to get bottom of the day prices on most of my trades.

To me it's been a good year, and I don't care if the analysts didn't like the latest earnings call. I've got a few years ahead of me it'll work out...

 

[ggies07]

FSD software is getting ready for payout

It is? They still have to implement the single stack, they're still working on the software. Any numbers of reasons could push it out another year or two. End of this year? WHO on here wants to take that public bet and let's make a sticky of the poll on this site. I'm getting tired of the over confidence on here about this.

 

[WattsHappening]

I’m sorry, but you need to read Elon’s words.

“ Master Plan, Part Deux
Elon Musk
July 20, 2016
The first master plan that I wrote 10 years ago is now in the final stages of completion. It wasn't all that complicated and basically consisted of:
Create a low volume car, which would necessarily be expensive (Roadster)
Use that money to develop a medium volume car at a lower price.(Model S)
Use that money to create an affordable, high volume car (Model 3)
And...
Provide solar power. No kidding, this has literally been on our website for 10 years.”

“ Today, Tesla addresses two relatively small segments of premium sedans and SUVs. With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market. A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below.
What really matters to accelerate a sustainable future is being able to scale up production volume as quickly as possible. That is why Tesla engineering has transitioned to focus heavily on designing the machine that makes the machine -- turning the factory itself into a product. A first principles physics analysis of automotive production suggests that somewhere between a 5 to 10 fold improvement is achievable by version 3 on a roughly 2 year iteration cycle. The first Model 3 factory machine should be thought of as version 0.5, with version 1.0 probably in 2018.
In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport. Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate.”

And this was written in 2016.

Thanks for this.

Wow, what a prescient statement! 6 years ago! We truly are not worthy.

 

[StealthP3D]

I don't understand the negative sentiment for EM on the conference call: he delivered a product roadmap and combined with a pivot shift which would be more profitable than any other new product to date.

Keep in mind, if TSLA shares shot up during the call and zoomed up the next day, the very same people would be congratulating Elon and how smart it was to refuse to get caught up in the games played by traditional analysts where they try to get you to commit to hitting specific targets even though you have no way to know exactly how the shortages will play out. How it was brilliant the way he pivoted away from the low margin $25K econobox and led analysts to think of high margin sales like FSD software and, later, AI humanoid robots.

 

[82bert]

Thanks for this.

Wow, what a prescient statement! 6 years ago! We truly are not worthy.

My thoughts exactly and precisely why I have a great deal of trust in Elon. He’s at least 5 steps ahead of everyone else.

 

[JRitt]

That's exactly what we have on order to replace my wife's Model 3, with the tow hitch option for our bikes and kayak trailer (and FSD). Delivery is scheduled for Sunday, so it is a Fremont build. They would not let me push off delivery, since I had placed the order in August. Carmax gave me $48,000 for her 2 year old Model 3! Thank you for your comments! Welcome!

Congrats! I forgot the hitch, but that's in my spec for carrying a bike as well. That's fantastic on the M3 trade. Used cars are still bringing big money, so well played. Enjoy that beauty!

Also, I honestly don't think you're actually missing much by not getting an Austin build. I don't believe Tesla is going to announce any huge upgrades for Austin Model Y. Yes it will have the new components, but I don't see them announcing some major range increase or performance increases like people are talking about. Why? Because they don't have to. Tesla is not in a position that forces them to show their hand. All they need to do is stay comfortably ahead of their competitors in the areas that matter most to potential buyers. If the competitor offers 300 miles of range, having 15% more keeps them ahead. Having 30% more range would be lovely, but if that comes with additional manufacturing costs, then it doesn't make sense for them. When the competitors step up their game and offer more range and more of XYZ at a similar or lower price (that is key), then, and only then will Tesla need to substantially improve their offering to leapfrog back into the lead. I think Elon and team are wisely sandbagging. Being the market leader has a whole bunch of associated privileges, and it's up to the competitors to prove their worth...not the other way around!

 

[woodisgood]

I think it's due to a paradigm shift from one that was understood to one that is uncertain.

The master plan was:

• Roadster fund Model S & X
• Model S&X fund Model 3&Y
• Model 3&Y fund the mass market car

Bullet point number 3 has suddenly changed to Models 3 & Y become some popular due to FSD we don't need the mass market car anymore. As far as the market is concerned, FSD isn't a sure thing and Elon's timelines aren't credible. This uncertainty isn't good for share price. My guess is we're stuck (under 900) until Tesla proves FSD.

Personally I don’t think that many people are dumb enough to doubt Tesla will eventually get there with FSD. You can doubt the timeline, sure, but there’s literally no precedent to doubt Elon and team eventually reaching the goal.

What’s actually missing for the market when it comes to FSD is some hint of the details that they can understand, so they can start to model what Tesla is actually going to do with FSD. This is why market tends to feel more “comfortable“ with Cruise or Waymo…they see the branded goofy vehicles driving around, they’ve seen the customer-facing interface/app, seen hints of the marketing strategies they’re used to, etc. It has very little to do with how “good” those robotaxis are relative to human drivers, but there’s something tangible that gives analysts etc. something to grasp. Everyone knows the technology/driving will eventually get there, but when it does, what does the whole thing look like?

With Tesla, the concrete direction is unknown, only the vast array of possibilities, that span from familiar (Uber without drivers, or driverless company-owned taxi a la Cruise and Waymo) to pretty wild and disruptive (shared cars, owner fleets, no more Teslas sold to customers). As the likely first to real FSD, Tesla chooses which way the whole thing goes. If you’re Wall St., how could you even begin to model the economics when you feel there isn’t enough of a hint of Tesla’s intended business model? This is why I believe the market is awaiting hints of intention….the existence of a ride-hailing app, or some parameters that might govern licensing to other OEMs, or what an owner fleet would look like. Really, anything official that makes it real and can be modeled.

Otherwise, Wall St is left with one of two conclusions: Either none of those details have been fleshed out yet or decided because Elon finds them trivial details relative to the challenge of actually solving FSD, or they have been worked out and are completely and totally under wraps. Either way it forces you to ignore FSD [as anything more than an expensive ADAS option] for the time-being.

(Note this is in contrast to how Tesla bulls look at it: all possibilities are intriguing based on loose modeling and Tesla will ultimately choose what makes the most sense, both from a mission and business perspective)

 

[thx1139]

I’m sorry, but you need to read Elon’s words.

“ Master Plan, Part Deux
Elon Musk
July 20, 2016
The first master plan that I wrote 10 years ago is now in the final stages of completion. It wasn't all that complicated and basically consisted of:
Create a low volume car, which would necessarily be expensive (Roadster)
Use that money to develop a medium volume car at a lower price.(Model S)
Use that money to create an affordable, high volume car (Model 3)
And...
Provide solar power. No kidding, this has literally been on our website for 10 years.”

“ Today, Tesla addresses two relatively small segments of premium sedans and SUVs. With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market. A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below.
What really matters to accelerate a sustainable future is being able to scale up production volume as quickly as possible. That is why Tesla engineering has transitioned to focus heavily on designing the machine that makes the machine -- turning the factory itself into a product. A first principles physics analysis of automotive production suggests that somewhere between a 5 to 10 fold improvement is achievable by version 3 on a roughly 2 year iteration cycle. The first Model 3 factory machine should be thought of as version 0.5, with version 1.0 probably in 2018.
In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport. Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate.”

And this was written in 2016.

I was responding to a post that claimed that the Model 3/Y were the medium volume car.

 

[Featsbeyond50]

Your bullet 3 is simply not accurate.

Roadster funded S and S helped to make 3/Y possible. Those are the mass market vehicles. Elon has already said Part 1 is complete. Part Deux clearly discusses autonomous vehicles. Please refer to this link:

Master Plan, Part Deux | Tesla

www.tesla.com

@thx1139
Guys, don't get caught up on the literal accuracy of my bullet points. The POINT is investors and analyst now have a different understanding of what Tesla's strategy is going forward. And they aren't comfortable with it.

 

[bballshinobi]

Based on going through a few of these big-time drawdowns over the last 3.5 years now, my spidey sense for a true bottom starts tingling when people stop celebrating "great deals" and there's real genuine fear or disbelief reverberating through this thread. Basically, when it's gone lower than you ever thought possible and seems like it won't ever recover, there's your bottom.

The sentiment has become less intense as this crowd has gotten deeper and deeper into the money and we're much more battle-hardened, as a group, than we were even just a few years ago, but I think it still holds true to an extent.

I've used that as the buy indicator as well. Also, I think it's easier to stomach buying the dip now that Tesla is profitable, because you can calculate a PE you are comfortable with AND you think Wall Street will be forced to accept down the road. Whereas it was difficult to tell the bottom before because the stock price was purely based on projection and sentiment, nowadays the profitability is undeniable so it's just how a matter of much PE one is willing to pay for the stock.

 

[Artful Dodger]

【Jan.28.2022】The factory is indeed so busy near the Chinese New Year \ Giga Shanghai \4K #412 Wu Wa 13:43

 

[Featsbeyond50]

Personally I don’t think that many people are dumb enough to doubt Tesla will eventually get there with FSD. You can doubt the timeline, sure, but there’s literally no precedent to doubt Elon and team eventually reaching the goal.

What’s actually missing for the market when it comes to FSD is some hint of the details that they can understand, so they can start to model what Tesla is actually going to do with FSD. This is why market tends to feel more “comfortable“ with Cruise or Waymo…they see the branded goofy vehicles driving around, they’ve seen the customer-facing interface/app, seen hints of the marketing strategies they’re used to, etc. It has very little to do with how “good” those robotaxis are relative to human drivers, but there’s something tangible that gives analysts etc. something to grasp. Everyone knows the technology/driving will eventually get there, but when it does, what does the whole thing look like?

With Tesla, the concrete direction is unknown, only the vast array of possibilities, that span from familiar (Uber without drivers, a la Cruise and Waymo) to pretty wild and disruptive (shared cars, owner fleets, no more Teslas sold to customers). As the likely first to real FSD, Tesla chooses which way the whole thing goes. If you’re Wall St., how could you even begin to model the economics when you feel there isn’t enough of a hint of Tesla’s intended business model? This is why I believe the market is awaiting hints of intention….the existence of a ride-hailing app, or some parameters that might govern licensing to other OEMs, or what an owner fleet would look like. Really, anything official that makes it real and can be modeled.

Otherwise, Wall St is left with one of two conclusions: Either none of those details have been fleshed out yet or decided because Elon finds them trivial details relative to the challenge of actually solving FSD, or they have been worked out and are completely and totally under wraps. Either way it forces you to ignore FSD [as anything more than an expensive ADAS option] for the time-being.

(Note this is in contrast to how Tesla bulls look at it: all possibilities are intriguing based on loose modeling and Tesla will ultimately choose what makes the most sense, both from a mission and business perspective)

Yes, this is what the market has to digest. Before they were figuring on a next generation of cars.

 

[82bert]

I was responding to a post that claimed that the Model 3/Y were the medium volume car.

Indeed you did. My mistake!

 

[vikings123]

I'm in agreement with one of our esteemed ex-posters here...Elon is a liability on conference calls. I love hearing from him, but he spooks the 'tutes.

https://twitter.com/x/status/1487004414820995075

We have one data point(Q3 ER) of Elon not being on a quarterly call and the stock reacted favorably. Coming out of Q3 call Wall Street probably felt like the key man risk has abated. I think Wall Street worries about the key man risk a lot and rightly so.

Fast forward to Q4 ER Wall Street heard a very incoherent plan, messaging was key. Macros had a huge role to play too.

All that said Elon has always appreciated feedback and has shown willingness to make changes so I expect Tesla to improve their messaging/communication for Q1. As somebody else said Elon forgot that he was not on Lex Friedman's podcast. It just wasn't the right venue.

Does anybody think the recent trip to Ellison island has Elon perhaps thinking about potentially moving to a Chieft Product Owner and handing over the CEO reins to somebody else? I will see myself out now, thanks for listening.

 

[Prunesquallor]

Here is Deutsche Bank's follow-up note on their callback with Tesla IR. Lots of good nuggets in here that come straight from Tesla. Some of my highlights:

1. Tesla believes it can bring down the cost of existing M3 and MY considerably; these models can serve cheaper markets with more economical prices in the future. Another reason to de-prioritize the Model 2 for now.
2. Nothing is set in stone with the company's strategy, meaning Model 2 is not shelved indefinitely if it makes sense to produce it in the future.
3. Expedited costs along with warranty/recall costs amounted to about $360 million of the total $700 million headwind (with the remaining $340 million related to payroll tax impact from Elon's compensation plan),
4. Management views Optimus as a side project. They hope to complete a prototype this year and have it first handle menial tasks at Tesla facilities before marketing it to other companies in the years ahead.

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That's…. rather good.

 

[FS_FRA]

Here is Deutsche Bank's follow-up note on their callback with Tesla IR. Lots of good nuggets in here that come straight from Tesla. Some of my highlights:

1. Tesla believes it can bring down the cost of existing M3 and MY considerably; these models can serve cheaper markets with more economical prices in the future. Another reason to de-prioritize the Model 2 for now.
2. Nothing is set in stone with the company's strategy, meaning Model 2 is not shelved indefinitely if it makes sense to produce it in the future.
3. Expedited costs along with warranty/recall costs amounted to about $360 million of the total $700 million headwind (with the remaining $340 million related to payroll tax impact from Elon's compensation plan),
4. Management views Optimus as a side project. They hope to complete a prototype this year and have it first handle menial tasks at Tesla facilities before marketing it to other companies in the years ahead.

It's rare that I like something from Deutsche Bank (and I'm speaking as a German...), but in this case I do.

 

[FS_FRA]

Are they seriously trying to get us to close down for today?

 

[AKAlex]

In Elon's podcast appearance with Lex Friedman he alluded to there being internal data showing that FSD would surpass human safety levels by the end off 2022. It would be great if someone with a bit of twitter mojo could ask him to share some of this data. I would LOVE to see what internal statistics they are relying on along with the decay rate & function from the past few years of development. A simple graph would be all it would take! Where does the decaying line of FSD failure intersect the horizontal line of human failure?