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

[kbM3]

New YouTube channel. But very educated take on FSD development.

 

[petit_bateau]

This is a rerun of last year when I analysed the 2020 and 2019 EV numbers, most of which was in this post although I also did some further battery analysis in another post. Anyway here is this year’s offering as an analysis of the 2021 numbers.

(for last year, see at Moderators' Choice: Posts of Particular Merit)

My methodology this year has been much the same. The sources are similar – the public versions of EV Sales, Adamas, plus lots of Google, etc. I now have about 80 line items I’m tracking, much more than in any single one of those public sources.

PS. By the way, I also do a daily energy news cuttings post at Energy Sector News - all welcome.

Following on from yesterday*, and just as with last year here is the further battery analysis. I can't find last year's post so I'll put up that chart below as well. Something to note is that the Adamas figures for EV battery utilisation are for BEV + PHEV + HEV, and so one must subtract out the cell utilisation in the HEV category. That is one of the reasons my numbers are slightly different than the Adamas numbers.

In 2021 my estimation is that 269.3 GWh went into BEV + PHEV, by comparison with 113.2 GWh in 2020. A 138% growth, not shabby. Since the number of vehicles grew by 108% the average battery pack size in a vehicle is increasing. This is most notable in the mid-range.

and last year the split was approximately as follows:

I seem to recollect that last year I did these Navajo blanket charts from the other perspective, i.e. that of the battery manufacturer. I'll have a dig around and see if I can find that again, no promises.

* which is now also available at Moderators' Choice: Posts of Particular Merit

 

[Silent Ludicrosy]

Rumour that Tesla has ordered 204k BYD blade batteries with deliveries starting in March. It's difficult to know what the ultimate volume is for Shanghai - annualised Dec 21 production is already over 800k/yr with existing suppliers and Tesla is now ordering another 200k packs from a new supplier.

https://twitter.com/x/status/1492366049354084356

No surprise there, he told us he was studying the blade years ago

https://twitter.com/x/status/1198705790472740864

 

[MABMAB]

The green haired kid FOMO’d back in today.

View attachment 768007

Stop making stupid people famous

 

[Discoducky]

How much did the market go down during the Russia annexion of Crimea?

No real affect...just look at the historical chart when the event took place in Feb/March 2014, and no, I'm not worried about it affecting supply chain of critical chip elements. Due to other events taking place in the world (pandemic, inflation) we could will see extra volatility until Putin stands down.

Longer version...
However, this time Putin is in a much better place to wage war (lots of cash, less USD..yatta yatta), but that likely won't happen as he has yet again staged this during the Olympics...yep, it is weird and Crimea was/is very close to Sochi, where the Olympics were being held. Putin is getting the most airtime possible, so IMHO, he is just 'putin' on a show' and then he'll go back to the usual stuff (disinformation campaigns, international hacking, riding horses shirtless).

My short take on this is simply that Russia cannot afford to go to war as Europe and NATO can stand on its own. Putin just wants to be sure that Ukraine won't join NATO (seals a political failure and Ukraine has a new president that is suggesting joining NATO) and he is consolidating his hold on Crimea (this is where most of the resource value is anyways).

If you want to read up on this, this article is good: The Russia-Ukraine crisis, explained

 

[Opus BC fan]

So I shouldn’t be too concerned? I am having a tough decision to sell 15% of my tsla holdings for closing on a new home. Mortgage rates are high and i was banking on Q1 earnings to sell like a noob. More lessons on timing the market… don’t know when (if) I’ll ever learn.

I am in the same boat and definitely feel your pain...
It is a hard lesson for me but I will be getting my dream home courtesy of TSLA in the deal.

 

[Hock1]

Barely a day goes by without me hearing that the election was stolen or the vaccine is an attempt to control the population. People clearly aren't letting facts or truth get in the way of their political agenda.

"Only that day dawns to which we are awake"

 

[insaneoctane]

Doesn't it seem poor planning to spend billions on such old tech? Isn't the spec here match v2 SC? I already try to route to v3 networks over v2 when possible and v3 was introduced in March 2019. Seems US taxpayers ought to want a little more future proof specs? I know this would be better than nothing, but should that be the goal early in the planning stage?

Biden's Infrastructure Bill Will Put More EV Chargers Along Highways

The plan calls for EV chargers being placed every 50 miles near highways and high-traffic corridors.

www.thedrive.com

 

[30seconds]

Actually, that's not what I'm saying haha. At least in terms of timeline.

I don't see TSLA being capped to 850 for 2022. Not at all. The upside will probably be limited to the high at the beginning of the year, so 1200. That I can definitely see.

If you do feel that 850 is where the share price will be at the end of 2022, you should probably add in your estimates for GAAP & Non GAAP EPS. I'm at a baseline of $12 GAAP, but I think $15 is realistic based on deliveries of 1.5-1.6 million. There's multiple upsides in store for GAAP earnings in 2022. GAAP EPS will increase dramatically faster than Non GAAP due to no more hits from Elon's compensation tranches. Only 62 million spread across 2022. Then you have S/X. If they get back to full production this year, that will account for $2-3 of EPS alone over 2021. Then you have the tax allowance that will be used at some point in 2022.

I'm using GAAP EPS because that's the one that has the impact on P/E multiples. I think Non GAAP will be $15-18 this year, possibly even $20.

And if that's the case, if Tesla executes like that, then you're looking at P/E way, way south of 50 if the stock was still at 850 by the end of the year. Sorry but to think that TSLA would have a forward P/E of 25-30 while growing earnings at a baseline of 100% for 2023 is delusional and a pretty clear example of fear overtaking rational thought process as an investor.

Only way TSLA could have that low of forward P/E or really even a forward P/E of lower than 50 is if we're in another "once in a decade" type event like the dot.com crash or the housing crisis. Neither of which I see any similar elements or traits. Not even close.

Obviously, the caveat is that Tesla has to continue executing like they have. But considering expectations for Tesla are already in the basement

with estimates of Non-GAAP EPS of $10, Tesla is set up for huge beats throughout 2022.

I'm getting worried that the delayed launch of Texas and Berlin are going to make the Q1 financials relatively flat vs Q4. If the factories come on late in the quarter there may be a strange expense hit depending on how the fixed vs variable costs are allocated, but at least there shouldn't be the CEO stock impacts.

Given the larger market dynamics I'm getting ready for more bumps for the next 2-3 months. Hopefully investors get excited with the Berlin & Austin ramp once we start to see it.

 

[SOULPEDL]

10.8.1 driver here, car has been able to reverse since 10.5 iirc. It's done it to me twice and both times were not ideal and terrifying. And be careful if you take over because the car will still be in reverse

I'm also on 10.8.1 FSD Beta and thought for sure my updates stalled. A bit of research on Teslafi.com and this appears normal. I hadn't though about accelerating in reverse - not being fully aware it switched to reverse and you goose it. Maybe that risk is why reverse FSD is a rare occurrence used sparingly - I haven't seen it yet. Lesson is... easy on the pedal? Seems to me there should be a failsafe for that scenario and maybe they have it IDK.

So my car has been known to exit parking lots onto roadways without slowing. I'm still wondering if this is by design and the car actually sees the road is clear before I am aware? Is it looking through trees far ahead? I've seen it keep track of other car paths in time and then proceed without immediate visibility. This makes me think it's by design (better described as a capability, meaning it does this because it can). Anyone else see this?

Related to my above observation, there's also a law in Az in that a car must stop in front of the sidewalk from an Alley, Driveway, or Business. It's again one of those rules that nobody follows, but here's the law and the fine. I guess this could be another frivolous complaint, and starting to wonder how many laws are out there that nobody follows until FSD does it and it's suddenly not OK.

We all know the rolling stop issue was way overblown as a part of the "Recall" media blitz. So I expect we'll see more as this rolls out since the laws a different state by state. I do wonder why Tesla allowed rolling stops in the first place. That was inviting an attack and comes across to me as taunting the authorities. What was Tesla thinking? Or was this done for better vision data by keeping the car rolling, like creep, and potentially safer as a result?

 

[LYTRIDR]

Doesn't it seem poor planning to spend billions on such old tech? Isn't the spec here match v2 SC? I already try to route to v3 networks over v2 when possible and v3 was introduced in March 2019. Seems US taxpayers ought to want a little more future proof specs? I know this would be better than nothing, but should that be the goal early in the planning stage?

Biden's Infrastructure Bill Will Put More EV Chargers Along Highways

The plan calls for EV chargers being placed every 50 miles near highways and high-traffic corridors.

www.thedrive.com

In fairness, the 150kW is a minimum requirement, not a cap. I believe the people who install these systems will do the math on throughput and desire ability vs install and operational cost and many if not most will come to the obvious conclusion that higher power is a better investment in most cases.

Also in some more remote areas, 150kW is a major upgrade that I would welcome, and these could be built even when the unsubsidized economics don’t support it.

 

[Discoducky]

Doesn't it seem poor planning to spend billions on such old tech? Isn't the spec here match v2 SC? I already try to route to v3 networks over v2 when possible and v3 was introduced in March 2019. Seems US taxpayers ought to want a little more future proof specs? I know this would be better than nothing, but should that be the goal early in the planning stage?

Biden's Infrastructure Bill Will Put More EV Chargers Along Highways

The plan calls for EV chargers being placed every 50 miles near highways and high-traffic corridors.

www.thedrive.com

Agreed, it would be silly to invest in less than v3 SC and it would be prudent to create a plan which intentivises continued increases to charging speeds and reductions to cost to the consumer overtime. Something like putting sustainable chargers with back up batteries so overtime the cost of the station pays for itself before the end of its useful life. But what do I know, I'm just a retired tech product manager...

 

[StarFoxisDown!]

I'm getting worried that the delayed launch of Texas and Berlin are going to make the Q1 financials relatively flat vs Q4. If the factories come on late in the quarter there may be a strange expense hit depending on how the fixed vs variable costs are allocated, but at least there shouldn't be the CEO stock impacts.

Given the larger market dynamics I'm getting ready for more bumps for the next 2-3 months. Hopefully investors get excited with the Berlin & Austin ramp once we start to see it.

You don’t need to be worried because at this point……. it’s practically a certainty that Berlin won’t make its first deliveries in Q1. Austin is still up in the air but seems more likely to make deliveries. It would be immensely better if Tesla just waited on both Berlin/Austin to start deliveries in Q2 with more production. Amortization and depreciation start the second Tesla makes a delivery from either Berlin or Austin…..so the fewer deliveries they make from each factory in its first quarter of operation, the harder the hit on gross margins.

I doubt we see that much of Opex cost increase from Q4 to Q1 because in reality both factories were already up and running in Q4. They already had a bunch of employees. The costs of running each factory was there. So Tesla already got hit by operational costs on Q4, just not the gross margin hit from making actual deliveries, which again is the trigger for amortization/depreciation for Berlin/Austin to start making an impact on gross margin.

As for Q1’s financials, it won’t be flat. If Tesla’s deliveries are flat well then off course Q1’s financials will be flat. But we know that Shanghai will do anywhere from 15-25k more over Q4 and it seems like Fremont production is very strong. It’s simple math on all of the one-time items in Q4 not being in Q1 + anywhere from 20-30k more deliveries equals quite strong QoQ earnings growth. Bear in mind, Zach reiterated again that while gross margin May fluctuate a bit when Berlin/Austin start their ramp, he expects operating margin to continue to expand

 

[StarFoxisDown!]

Btw, I hate linking to Gary’s post but this is actually very key

https://twitter.com/x/status/1492526331602550784

If S&P were to just stay flat for the rest of this year, P/E would drop to 19. This is before analysts have done their usual, after earnings EPS estimate revisions which are likely going higher and you also need to factor that the companies that drive EPS the most in the S&P…Tech….routinely beat EPS estimates by a wide margin

 

[M|S|M MYP]

And they say Tesla cars are not appreciating assets!! BULLISH!!!

 

[mongo]

I'm getting worried that the delayed launch of Texas and Berlin are going to make the Q1 financials relatively flat vs Q4. If the factories come on late in the quarter there may be a strange expense hit depending on how the fixed vs variable costs are allocated, but at least there shouldn't be the CEO stock impacts.

Given the larger market dynamics I'm getting ready for more bumps for the next 2-3 months. Hopefully investors get excited with the Berlin & Austin ramp once we start to see it.

Even with same deliveries, Tesla will post better numbers:
No massive 2018 CEO plan true-up of $245MM (only 65MM remains, applied over 0.6 years)
No massive 2012 CEO payroll tax hit of $340 million
Hopefully less expedite fees $300MMish?
Potentially lower vehicle ocean shipping costs (due to bulk purchase)
Phase in of higher vehicle sales prices.

Further, production rate increases continuously, so carrying the EoQ rate across a full quarter should increase numbers without B&A. (New Year's excepted).

 

[StealthP3D]

We all know the rolling stop issue was way overblown as a part of the "Recall" media blitz. So I expect we'll see more as this rolls out since the laws a different state by state. I do wonder why Tesla allowed rolling stops in the first place. That was inviting an attack and comes across to me as taunting the authorities. What was Tesla thinking? Or was this done for better vision data by keeping the car rolling, like creep, and potentially safer as a result?

View attachment 768088

IMO, Tesla included the rolling stop for two reasons:

1) Because it was an area in which they could safely increase efficiency and safety simultaneously (by leveraging the ability of the cameras to look all directions at once).

2) The fact that NHTSA could object was not a risk, but a feature. If opposing forces built a case against it, it was consuming man hours. It was low-hanging fruit that might consume time that would otherwise be spent fighting bigger things.

If Tesla designed it without rolling stops, they would have already lost. It was a no-brainer to include rolling stops.

 

[FireMedic]

Stop making stupid people famous

I think you’re joking… But I will respond anyway.

I personally can’t stand the green haired weenie baby TBH, but he does have a huge following and I’ve certainly not made him famous; I’m not even a follower or a subscriber to his channel, I just came across this tweet of his.

Realistically though, this may have been a good move by him. He did some tax loss harvesting and now is going back in with one concentrated position after YOLO’ing (losing) on a bunch of garbage stocks.

It was more luck than skill me thinks. But the result is the same. Personally I’m highly concentrated in old TSLA, AAPL, GOOG shares and wouldn’t dare sell any of them.

This too shall pass. I’ll just buy the dip to add to these positions and HODL.

 

[SOULPEDL]

IMO, Tesla included the rolling stop for two reasons:

1) Because it was an area in which they could safely increase efficiency and safety simultaneously (by leveraging the ability of the cameras to look all directions at once).

2) The fact that NHTSA could object was not a risk, but a feature. If opposing forces built a case against it, it was consuming man hours. It was low-hanging fruit that might consume time that would otherwise be spent fighting bigger things.

If Tesla designed it without rolling stops, they would have already lost. It was a no-brainer to include rolling stops.

1) How was rolling through any safer? That was part of my question earlier. Maybe you meant safer than humans such that a full stop is less important because of camera hyper-awareness. The same argument can (and may) go on for everything until the cars roll around at max efficiencies - like why stop at an empty intersection at all if the safety data shows it's not required? Energy/time savings, convenience, and data should equally drive this change as risk/reward.

2) So throw them a bone to keep them busy on trivial things? Not sure I follow your strategy. As an investor, I don't like this "feature." OTOH, I love how Tesla challenges everything and who am I to judge strategy, especially when I do similar things in life out of principle quite often. Strange position I'm in.

 

[Discoducky]

IMHO, I assume a full stop increases the likelihood that the car behind will either hit you, honk at you and/or be perturbed while behind you. So with v10.10, throttle is now applied when I can see the coast is clear. This isn't the place that v10.10 struggles though so no good data is being lost.

The good data is now prioritized with safety like unprotected lefts, ghost slowdowns and the long tail of a delightful experience.