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

[Ogre]

I used to really despise stuff like this, where it talks about prototypes doing amazing things, but now I like it because it serves two good purposes for Tesla and the planet.

1. It continues to show Tesla is the defacto leader and when if some incarnation of the prototype ever ships, it will undoubtedly be materially inferior to its distant prototype.
2. AND if it is somehow is as good as they say, then great! Good for them for finally competing! That means we'll have better EV's and can more quickly stop this massive carbon experiment.

(PSA: #2 has never happened and will most likely never happen as it is just marketing)

And #3 If they every really get remotely competitive with current Tesla, Tesla has piles of room to lower prices to keep a competitive offering and still be hugely profitable.

Teslas current 30%+ margins are a sign of just how big the gap is between them and the rest of the field.

 

[ZachF]

Many (most?) automakers have had deeply negative cash flows over the last decade. The German makes especially.

Quoting myself, but:

Growth, Profitability, and Financial Ratios for General Motors Co (GM) from Morningstar.com

See General Motors Co's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

GM has burned $61.5 billion in cash since 2012

Growth, Profitability, and Financial Ratios for Volkswagen AG ADR (VWAGY) from Morningstar.com

See Volkswagen AG ADR's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

VW has burned €33.9 billion in cash since 2012.

Growth, Profitability, and Financial Ratios for Mercedes-Benz Group AG ADR (DMLRY) from Morningstar.com

See Mercedes-Benz Group AG ADR's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

Daimler has burned €25.3 billion since 2012.

Growth, Profitability, and Financial Ratios for Bayerische Motoren Werke AG (BMW) from Morningstar.com

See Bayerische Motoren Werke AG's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

BMW has burned €4.8 billion since 2012.

 

[Artful Dodger]

NFLX getting crushed in the After-hrs session after reporting a drop in subscribers:

Netflix subscribers fall for first time in a decade, shares plunge 24%

 

[Ogre]

Man, Netflix took a beating, I suspect we see some fun after hours moves all week with earnings coming in a massive mixed bag.

WOW.

I sold all of my Netflix back in mid December for $595/ share and paid $964 for TSLA with the proceeds.

Looking more and more like unloading my diversified port in favor of a 2 stock portfolio was a good call. Also sold MSFT, AMZN, and BRKB 2 of 3 which are down as much or more than Tesla from when I switched.

 

[insaneoctane]

Lolz

Mercedes Has a Massive New Weapon to One Up Tesla - TheStreet

German automaker Mercedes-Benz is building a veritable arsenal to challenge Tesla's leadership in high-end electric vehicles.

www.thestreet.com

There are some funny quotes in the article.

I researched this feat a little further....
In summary, the MB EQXX went 620 miles on one charge and still had 85 miles of estimated range left. It got 8.7 miles per kWh, or consumed 114.5 w/mi. It took 11.5 hours of driving, so average speed was 54MPH. The trip was from Germany to France. Looking up the altitude of the start and destination cities indicates approximately 500 feet of net elevation reduction. Some of the trip was on the Autobahn up to 87 MPH. The EQXX has a Cd of 0.19 and weighs 3,869 pounds. It has fairly narrow low rolling resistance tires. Aluminum brakes and I am guessing composite structure are some of the expensive approaches that don't offer Tesla-like economies of scale. It's a $$$ tech demo, not a production vehicle, but a clever approach for MB to get "Tesla-killer" press without needing to mass produce anything.

Here's the funny quotes from the original article...

Decidedly, Mercedes-Benz is an unstoppable force in the electric-vehicle race.

The German auto group seems to have decided to make people talk about it.

This is an opportunity because Elon Musk, chief executive of EV-market leader Tesla, (TSLA) - Get Tesla Inc Report is currently devoting much of his energy to his $42 billion effort to buy Twitter, (TWTR) - Get Twitter, Inc. Report a proposal that the site's board is resisting. So Mercedes-Benz has a marketing opening, filling the void left by Musk.

 

[wipster]

There are some funny quotes in the article.

I researched this feat a little further....
In summary, the MB EQXX went 620 miles on one charge and still had 85 miles of estimated range left. It got 8.7 miles per kWh, or consumed 114.5 w/mi. It took 11.5 hours of driving, so average speed was 54MPH. The trip was from Germany to France. Looking up the altitude of the start and destination cities indicates approximately 500 feet of net elevation reduction. Some of the trip was on the Autobahn up to 87 MPH. The EQXX has a Cd of 0.19 and weighs 3,869 pounds. It has fairly narrow low rolling resistance tires. Aluminum brakes and I am guessing composite structure are some of the expensive approaches that don't offer Tesla-like economies of scale. It's a $$$ tech demo, not a production vehicle, but a clever approach for MB to get "Tesla-killer" press without needing to mass produce anything.

Here's the funny quotes from the original article...

Decidedly, Mercedes-Benz is an unstoppable force in the electric-vehicle race.

The German auto group seems to have decided to make people talk about it.

This is an opportunity because Elon Musk, chief executive of EV-market leader Tesla, (TSLA) - Get Tesla Inc Report is currently devoting much of his energy to his $42 billion effort to buy Twitter, (TWTR) - Get Twitter, Inc. Report a proposal that the site's board is resisting. So Mercedes-Benz has a marketing opening, filling the void left by Musk.

So... did they stop for bathroom breaks? If not I hope they had a couple urinals on board...

 

[JRP3]

Jordan Giesige of The Limiting Factor confirmed with Tesla engineers at Cyber Rodeo that 4680 cells in the structural battery pack are cooled both via the side cooling ribbons and via heat wicking from the pack's metal bottom to the side cooling ribbons

To be clear this simply reflects the basic fact that the cell can includes the bottom of the cell, the same as every other cylindrical cell. Of course heat is wicking from the bottom, as well as from every part of the can.

 

[GOVA]

NFLX getting crushed in the After-hrs session after reporting a drop in subscribers:

Netflix subscribers fall for first time in a decade, shares plunge 24%

View attachment 795477

Not surprised. S-curve exists for a reason. Tesla is on the other end of it.

 

[ZachF]

WOW.

I sold all of my Netflix back in mid December for $595/ share and paid $964 for TSLA with the proceeds.

Looking more and more like unloading my diversified port in favor of a 2 stock portfolio was a good call. Also sold MSFT, AMZN, and BRKB 2 of 3 which are down as much or more than Tesla from when I switched.

There are a few low/no growth companies that have head-scratchingly high valuations… Wal Mart, Visa, and Disney come to mind off the top of my head.

 

[ZachF]

The biggest head scratcher is Wal Mart…

Growth, Profitability, and Financial Ratios for Walmart Inc (WMT) from Morningstar.com

See Walmart Inc's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

Profit last year of $13.6b, lower in nominal terms than almost a decade ago, and revenue isn’t even matching inflation…. But the market thinks this deserves a $433b valuation! (32x P/E)

 

[Ogre]

Mercedes is talking up their concept car because they still can’t figure out production at a profit.

Just 2 weeks ago MB said they couldn’t make EVs at cost parity with ICE for the foreseeable future.

Electric vehicles still significantly costlier to make vs cars with internal combustion engine - Mercedes-Benz - paultan.org

Battery-electric vehicles have a significant initial cost penalty over an internal combustion car, and that is not going to change anytime soon. In fact, Mercedes-Benz chief technology officer, Markus Schäfer told Road and Track that …

paultan.org

Battery-electric vehicles have a significant initial cost penalty over an internal combustion car, and that is not going to change anytime soon. In fact, Mercedes-Benz chief technology officer, Markus Schäfer told Road and Track that EVs won’t get any cheaper in the near term, not realistically.

For a given context he’s correct. It is not going to change—FOR MB—anytime soon.

Tesla… has reached cost parity based on manufacturing cost.

 

[kanweg]

To be clear this simply reflects the basic fact that the cell can includes the bottom of the cell, the same as every other cylindrical cell. Of course heat is wicking from the bottom, as well as from every part of the can.

If I understamd it correctly the relevant point is that the bottom of the cell can is in contact with a bottom plate, and the ribbon cools both the side of the cell can and said bottom plate.

 

[wipster]

Hate to post a Fred article, but this is great if it's factual:

Tesla Giga Berlin is now producing 350 Model Ys per week, aims to ramp up to 1,000 this month, report says

A new report coming out of Germany is giving us some insights into the state of the production ramp-up at...

electrek.co

 

[JRP3]

If I understamd it correctly the relevant point is that the bottom of the cell can is in contact with a bottom plate, and the ribbon cools both the side of the cell can and said bottom plate.

That is not correct. More details have been discussed in the engineering thread.

Investor Engineering Discussions

Really it is just savings from the front casting, since the Model Y has always had the rear casting. (At least I think it did, originally as two pieces, and then replaced with a single piece; which would have had minimal weight savings.) My guess is that the front casting saves 15-20 pounds...

teslamotorsclub.com

 

[wipster]

The biggest head scratcher is Wal Mart…

Growth, Profitability, and Financial Ratios for Walmart Inc (WMT) from Morningstar.com

See Walmart Inc's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

Profit last year of $13.6b, lower in nominal terms than almost a decade ago, and revenue isn’t even matching inflation…. But the market thinks this deserves a $433b valuation! (32x P/E)

It must be based on the stores they plan for the moon and Mars...

 

[ggies07]

That is not correct. More details have been discussed in the engineering thread.

Link?

 

[JRP3]

Link?

Investor Engineering Discussions

Really it is just savings from the front casting, since the Model Y has always had the rear casting. (At least I think it did, originally as two pieces, and then replaced with a single piece; which would have had minimal weight savings.) My guess is that the front casting saves 15-20 pounds...

teslamotorsclub.com

 

[Artful Dodger]

Not surprised. S-curve exists for a reason. Tesla is on the other end of it.

I think its even deeper market economics at work. Ten years ago, Netflix had a virtual monopoly (at least, a huge '1st-mover' advantage) in the streaming video arena. Fewer people had access to broadband, and bandwidth was much more expensive.

Now every media outlet and their dog has a streaming service. Netflix has trouble differentiating itself in this sea of well-funded startups and well-established media brands (Disney+ AMC+ etc+). And easing of Covid restrictions means total viewership (TAM) is down.

Now shortzes will salivate that see! Tesla will suffer the same end in 10 years when Mercedes or Toyota or Ford or BangGang Motors floods the market with cheep EVs.

Problem for shortie is they're always 10 steps behind: in 10 years, Tesla will be selling FACTORIES to these wanna-bees, specifically because its the only way they can get enough battery cells to build the few cars their meager resources allow. BTW, Tesla will sell them FSD too. Should make it manditory IMO, or 'no soup for you!'

IMO, Tesla WILL plan (MAST3RLY) to build sufficlent Battery Factories to build 300 TWh of cells by 2040. Now, the competition can either buy some of them, or Tesla will own them all, and those other guys will have to compete with Tesla cars/pwr products.

How, you ask? I predict Tesla is planning to build 3 factories that make battery factories (1 on each major continent). These Meta-Factories will turn Tesla in the Coca-Cola bottler of the Auto and Energy businesses, with their $15T/yr TAM.

Even Warren Buffet likes coke, near monopoly on sugary drinks for near a hundred years now... Just think, by 2030 a Tesla 4680 battery cell with 100 wh of energy will be cheaper to buy ($5 COGS) than a 500 ml can of Monster Energy drink (already $5 retail).

3 keys to buying a Tesla Battery Cell factory:

1. No-haggle pricing on the website, and
2. No-discounts for volume purchases (we sell every factory we make)
3. Order backlog stretches for years.

Cheers!

#PREDICT

 

[Rarity]

Quoting myself, but:

Growth, Profitability, and Financial Ratios for General Motors Co (GM) from Morningstar.com

See General Motors Co's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

GM has burned $61.5 billion in cash since 2012

Growth, Profitability, and Financial Ratios for Volkswagen AG ADR (VWAGY) from Morningstar.com

See Volkswagen AG ADR's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

VW has burned €33.9 billion in cash since 2012.

Growth, Profitability, and Financial Ratios for Mercedes-Benz Group AG ADR (DMLRY) from Morningstar.com

See Mercedes-Benz Group AG ADR's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

Daimler has burned €25.3 billion since 2012.

Growth, Profitability, and Financial Ratios for Bayerische Motoren Werke AG (BMW) from Morningstar.com

See Bayerische Motoren Werke AG's 10 year historical growth, profitability, financial, efficiency, and cash flow ratios.

financials.morningstar.com

BMW has burned €4.8 billion since 2012.

You have to wonder how GM is able to spend $20-$30 billion a year on capital expenditures and have so little to show for it. I guess it's an art.

We are spoiled with TSLA's capital spending efficiency.

 

[ZachF]

You have to wonder how GM is able to spend $20-$30 billion a year on capital expenditures and have so little to show for it. I guess it's an art.

We are spoiled with TSLA's capital spending efficiency.

Yes, GM is almost amazingly capital inefficient.

IIRC, if you net out the P/L for like the last 30 years of GM it nets out to basically zero!

Part of the reason GM’s FCF is so negative is because of bankruptcy wiping the slate clean, allowing them to borrow a lot of money. They spent a lot of that borrowed money on dividends and buybacks too…