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

[new_sneakers]

Berlin and Austin opening just before Shanghai forced to close is a big lucky break

Based on past history on how Tesla has handled issues like chip shortages etc .. Tesla will likely be a bit more aggressive with the factory ramps

Btw saw only one ship from US so far, non scheduled from China

Fortune favours the brave! Some (known or imputed) lucky breaks:

* As @elasalle notes, Austin and Berlin are opening and ramping as Shanghai pauses production

* In the lead-up to potential Build Back Better incentives, Tesla raised prices ahead of experiencing inflation in material costs.

* In anticipation of robotaxis being ready, Tesla didn’t allow leased cars to be bought out. As the first batch of 3-year leased Model 3s are returned to Tesla, the second-hand vehicle market is very hot.

* Tesla’s growth trajectory supported them keeping orders for chip supplies as other OEMs cancelled.

 

[H Mak]

I have seen few positive videos from this guy and he is of an opinion that we may get a sale in next few weeks due to China lockdown.

I found this a really interesting watch. He is saying there will be a significant hit to production and deliveries in Q2 due to Shanghai shutdown, and by the way don't rely on Berlin and Austin to take up the slack in any meaningful way for many months. It is likely this will provide a drag on the share price in the near term. It's a dose of reality against the euphoria of the recent openings and I for one have my short term expectations tempered. I am already loaded up on Tesla because of my "addiction" to buying the dips over many years, but set against the long term prospects of the company, I will be buying even more if indeed the price drops. For me, anything sub-$1,000 is a screaming buy opportunity. I will be doing some rebalancing of my investments to free up cash in order to take advantage of any such opportunities, should they arise.

The next few months could be a time to hold your nerve and use volatility to your advantage.

 

[jbcarioca]

I suppose it would be sticking straws up the dragon’s nose to place one in Taiwan - which anyway (correct, @jbcarioca ?) doesn’t have an auto manufacturing history.

Oops,

Here is the most relevant Tesla one:

Taiwan’s EV Supply Chain Cranks into High Gear - Taiwan Business TOPICS

Taiwan has a relatively complete supply chain for electric vehicle components, and companies such as Tesla rely heavily on Taiwanese suppliers for a

topics.amcham.com.tw

excerpt: "...75% of Tesla, Inc.’s suppliers are Taiwanese..."
But that isn't your question:

Taiwan, the unsung hero of automotive innovation

As the increasingly unrecognised institutional twin of mainland China, Taiwan will never be able to host major global events like the Olympics, as its neighbour Japan will do in 2020. But with quiet diligence, the tiny island – which officially still calls itself the Republic of China – builds...

www.globalfleet.com

Although Taiwan does not have major local car brands the traditional Japanese manufacturers have branded ib Taiwan.
Perhaps the most famous over the years is:
1987-get-that-yue-loong-feeling-with-a-taiwanese-nissan

Taiwan not only has Apple's largest supplier by far, ignoring practically every other tech company,Hon Hai Precision Industry Co, Inc Known more widely as Foxconn but they also have TSMC, but everyone knows them, that first word is 'Taiwan' by the way.

So, yes, Taiwan has an amazingly vibrant auto industry, mostly building foreign designed cars and supplying an amazing variety of high tech and other parts to the world. Every major Taiwanese company has operations in China too, and the majority of them are widely thought to be Chinese themselves. (they all look alike, doncha know?).

It would be very easy for Tesla to set up a major factory in Taiwan, they would not even need to change suppliers, just the shipping address. The big question is why? Since there are no obis advantages from a supplier, tariff or cost perspective much less salaries, it seems a strange choice. OTOH a CKD might be nice to do. The infrastructure to support more teslas is already well in place:

Find Us | Tesla

Use the interactive Find Us map to locate Tesla charging stations, service centers, galleries and stores on the go.

www.tesla.com

The market is ripe for the picking:
"Taiwan, with 24 million people, is a relatively small EV market. Tesla accounted for more than 90.35% of the EV market with, 5,746 cars sold in the past year, up from 3,136 in 2019. And with more than 4,000 units in sales, the company's Model 3 topped the charts." from Asia-Pacific Research Exchange

Sorry for the overly detailed rebuttal. FWIW, OT, I have a strong personal affinity to Tainan and the whole of Taiwan. It is one of the most underrated places in the world, in my opinion.

 

[canoemore]

Possibly, but I think we all might need to consider the very real possibility that Q2 2022 might end up being lower production totals than Q1, which would likely hit the share price negatively.

This would of course be a huge buying opportunity because we all know how production will go from here on out once Shanghai does re-open, but Q2 may end up being a bad blip in 2022's progress.

In this scenario, I wonder when the reduced production will be fully priced in. Would the stock begin to recover once things reopen, or would it be slammed again during q2 earnings?

 

[Nocturnal]

In this scenario, I wonder when the reduced production will be fully priced in. Would the stock begin to recover once things reopen, or would it be slammed again during q2 earnings?

The headlines would for sure all read "Tesla growth story at an end. First quarter with lower deliveries and lower EPS."

 

[UncaNed]

What's causing this morning's macro drop???

 

[wooter]

What's causing this morning's macro drop???

I'm no expert but there is this:

10-year Treasury yield tops 2.76% to start the week​

 

[Singuy]

What's causing this morning's macro drop???

China. Shanghai and Hk stock exchange went deep red last night which blew up futures from green to deep red.

 

[jbcarioca]

Another option is Thailand. It is around 10th in the world in auto manufacturing, has the requisite (and low cost) labor force and is also a significant RH drive consumer market. Plus it REALLY needs to wean itself off polluting ICE vehicles!

It's also a rare SEA country that has not been colonized. It is convenient to shipping, had excellent ports and can be a convenient locus for RHD production to serve Australasia, Africa as well as the Malay Peninsula market. However, for Tesla RHD/LHD is not so big an issue as it is for ICE. Perhaps the biggest Thai advantage is the trade agreements with India, Australia, NZ and AEAN. Those could bemajro factors, especially with the India market in sight, which could have many parts imported for a Indian factory. There are several superb locations depending on what eternal markets are desired for finished goods or components.
Rayong has unique port, airport (UTP) that is by far the largest freight capacity in Thailand) and industrial infrastructure advantages (I'm biased I used to live a few km from there).

Within a couple of years Tesla will have a major factory in Thailand, but what it will do is a larger question. They can hardly avoid that when they must target SEA, India, Sri Lanka, Southern Africa, Australasia and so on. With raw material supplies close by also, Thailand is unique. The industrial investment incentives are far to attractive to dismiss all the other advantages.

Every other country is more uncertain. Thailand is a safe bet.

 

[WarpedOne]

Thailand is around the same size as Texas.
Texas is approximately 678,052 sq km, while Thailand is approximately 513,120 sq km

Q.E.D.

 

[ZeApelido]

I'm old enough to remember the last time a Tesla factory was shutdown for over a month and production lowered and I thought I was smart enough to predict a temporary stock drop. Sold the stock waiting for a drop that never came in April 2020, luckily I bought back with "only" a 20% loss.

I'm not saying the stock is going up, down, sideways. I'm just saying, do you really think you know?

 

[TheTalkingMule]

Fortune favours the brave! Some (known or imputed) lucky breaks:

* As @elasalle notes, Austin and Berlin are opening and ramping as Shanghai pauses production

* In the lead-up to potential Build Back Better incentives, Tesla raised prices ahead of experiencing inflation in material costs.

* In anticipation of robotaxis being ready, Tesla didn’t allow leased cars to be bought out. As the first batch of 3-year leased Model 3s are returned to Tesla, the second-hand vehicle market is very hot.

* Tesla’s growth trajectory supported them keeping orders for chip supplies as other OEMs cancelled.

The biggest breaks are that:

1) Tesla is chip constrained and those chips should be piling up so that Shanghai can catch up somewhat when production returns.

2) It's the first weeks of the quarter. Increase production another 4%(arbitrary figure) across the last 10 weeks of the quarter and there's been almost zero impact.

Question is....has Tesla been 4% constrained by chip supply up til this point and can they physically ramp that 4%. Given what we've seen from the Shanghai team so far I'd say yes.

Macro nightmare today! Recover by.....2pm?

 

[Discoducky]

I'm no expert but there is this:

10-year Treasury yield tops 2.76% to start the week​

And this week we have bank earnings to add to the fray.

Hopefully, we bounce off of support, but SPY still has a gap to fill at ~439. I was hoping we wouldn't test that but it would seem that the forecast is cloudy with a chance of longer term China shutdowns.

 

[jerry33]

Have not examined the data that carefully, but it seems like charging time is up in the range of 25%.

Before Tesla reduced the charge rate on the older models, I was getting around 10% charging time (2013 S 85).

 

[Knightshade]

The biggest breaks are that:

1) Tesla is chip constrained and those chips should be piling up so that Shanghai can catch up somewhat when production returns.

2) It's the first weeks of the quarter. Increase production another 4%(arbitrary figure) across the last 10 weeks of the quarter and there's been almost zero impact.

Question is....has Tesla been 4% constrained by chip supply up til this point and can they physically ramp that 4%. Given what we've seen from the Shanghai team so far I'd say yes.

Macro nightmare today! Recover by.....2pm?

Losing early Q production reduces deliveries outside of China- there's only so many ships and only so much time to move them.

AFAIK margins are better on cars delivered outside of China are higher.

So there'd be an impact even if they could make up 100% of production (which gets increasingly unlikely the longer this goes)

Plus this slows Berlin too since Shanghai is currently supplying them at least batteries (motors too I thought?)

 

[H Mak]

I'm old enough to remember the last time a Tesla factory was shutdown for over a month and production lowered and I thought I was smart enough to predict a temporary stock drop. Sold the stock waiting for a drop that never came in April 2020, luckily I bought back with "only" a 20% loss.

View attachment 792359

I'm not saying the stock is going up, down, sideways. I'm just saying, do you really think you know?

A salutary lesson indeed. The advantage of buying the dip is you take advantage of a price drop without having to predict the future

 

[SOULPEDL]

the second-hand vehicle market is very hot.

Not sure if people get the gravity here on Jupiter. Refusing to give our marketing guy a ride to pick up a new Ford Explorer 2 weeks ago, we had the Tesla talk... and he has been trying to buy a used Model 3 since. So he demonstrated how hard it is to catch one on Carvana yesterday. F5 was showing new cars each time pressed. Like trying to get concert seats, you have 10 min to get approved, and if you don't complete it in time, the sale is gone in a second to someone else. I have never seen anything so hot on any market. This is bigger than Furbys or even Pet Rocks!

 

[TheTalkingMule]

Losing early Q production reduces deliveries outside of China- there's only so many ships and only so much time to move them.

AFAIK margins are better on cars delivered outside of China are higher.

So there'd be an impact even if they could make up 100% of production (which gets increasingly unlikely the longer this goes)

Plus this slows Berlin too since Shanghai is currently supplying them at least batteries (motors too I thought?)

My concern at this point would be limiting any major hit to production, the deliveries can wait.

European deliveries will take a hit, but by the time the quarter ends it'll be halfway unwound hopefully.

Now if this goes on another month and a half......lord knows. I just don't see that happening.

 

[CHGolferJim]

Before Tesla reduced the charge rate on the older models, I was getting around 10% charging time (2013 S 85).

I meant amount of time spent at individual superchargers seems to have increased about 25%.

 

[SOULPEDL]

I'm old enough to remember the last time a Tesla factory was shutdown for over a month and production lowered and I thought I was smart enough to predict a temporary stock drop. Sold the stock waiting for a drop that never came in April 2020, luckily I bought back with "only" a 20% loss.

View attachment 792359

I'm not saying the stock is going up, down, sideways. I'm just saying, do you really think you know?

This is showing some promise. Besides, it's all short-term issues and I'm long. Investors can ignore (other than a nice sale this AM).