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

[betstarship]

Cybertruck is going to outsell the Rivian many times over.

Todd the Cybertruck Truck Guy on YouTube has good insight on how Cybertruck satisfies all kinds of American buyers of pickup trucks and full-sized SUVs. Here’s a couple good videos on the Rivian comparison.

I hear that, though the market's huge for trucks! Also, there's no in-house knowledge, admitted by them, for scaling production. Even if Cybertruck sells more because Tesla can ramp up production faster and might be a better product right now, it doesn't mean that Rivian is going to sell 0 vehicles. They have a commercial van set up too that could sell a lot just to Amazon.

It's kinda like Rivian is going into it starting with the Model S like how Tesla started in 2012.

It's how I interpret the analysts reporting that Tesla is 10 years away. Though, I think the ramp up will go quicker for Rivian to get to a steady-state compared to Tesla's long road across S, X, 3, and now Y.

...now, I wonder what the ramp-up speed has been like from 0 -> 100k vehicles per line...and track that ramp up with other EV vehicle manufacturers...

 

[Usain]

Seriously, I think TSLA is, by far, my least risky investment ever and have let it grow to some 95%+ of our total net worth (which is now quite substantial).

Tesla was very risky around 2017. They could have gone bust trying to ramp Model 3. You couldn't be sure they would make it.

Now instead of, "Will they make it or not?", it's "Will they grow fast or will the grow really, really, really fast?"

 

[Usain]

Cybertruck is going to outsell the Rivian many times over.

Todd the Cybertruck Truck Guy on YouTube has good insight on how Cybertruck satisfies all kinds of American buyers of pickup trucks and full-sized SUVs. Here’s a couple good videos on the Rivian comparison.

I think it's way too early to tell how good Cybertruck will be and how it compares to Rivian. It has been so long since it was unveiled that it's hard to tell what the final product is really going to be. The specs have changed and we don't really know the price.

I expect it to be an incredible, ground-breaking vehicle. But we really don't know. Elon was saying that they were working to get the costs down. Who knows what tradeoffs will need to be made?

 

[Usain]

interesting thread speculating about a possible reason Elon is buying Twitter. Basically Twitter is a powerful tool for legislatures in states that prohibit Tesla from operating stores and selling directly to consumers. This person is speculating that this is an attempt to fix those laws. I'm not sure if I buy it, but it is an interesting read. I put this here rather than the Elon & Twitter thread because I think this speculation is related to Tesla's core business.

https://twitter.com/x/status/1520476230994202624

That's a nice theory, but he fails to explain exactly how buying Twitter helps lobby Republicans to change the dealership laws.

If Elon put Trump back on Twitter then that might help him gain some fans on the right. But beyond that, I don't see how Twitter helps.

 

[Rarity]

Interest Income . . . . the Cash Generating Machine replacing Regulatory Credits?
Tesla is making an effort to get some investment return on it's cash balances. In Q1 2022, Tesla invested $508m in Corporate Debt Securities.
The fact that Interest Income only rose from $25m in Q4 to $28m in Q1 tells me the investment was made some time in March . . .so we only have partial benefit in Q1. I am hoping to see Interest Income jump to $40m in Q2 and a full year number of $150m. If Tesla invests more of its cash in Marketable Securities, we should see a nice increase in Interest Income. . . .combined with Tesla's future positive Free Cash Flow and a rising interest rate environment we could see annual Interest Income greater than $1B in a few years.


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Absent any further details, I suspect that these are strategic purchases of bonds of the miners. If this line item grows, wouldn't Tesla be required to characterize them more fully?

 

[bruce4000]

I think it's way too early to tell how good Cybertruck will be and how it compares to Rivian. It has been so long since it was unveiled that it's hard to tell what the final product is really going to be. The specs have changed and we don't really know the price.

I expect it to be an incredible, ground-breaking vehicle. But we really don't know. Elon was saying that they were working to get the costs down. Who knows what tradeoffs will need to be made?

I am afraid CT has become too much of Elons personal toy, things like self opening doors which truck people don’t need but will add to the cost and complexity.

 

[Bouboule]

Another Benefit of Direct to Consumer Sales
We've discussed often the benefits to Tesla of a Direct-to-Consumer model (no dealers).
@jbcarioca has informed us about the benefits of lower warranty repair costs, faster cash cycle, lower inventories, etc.

One other benefit of the Direct-to-Consumer model is Tesla gets the Customer Deposits.
In August 2021, Tesla increased the non-refundable customer deposits from $100 to $250. This means that the Customer Deposits that Tesla was holding at Q2 2021 will increase (assuming backlog stays flat) from $812m to over $2B by the end of this year as deliveries with $100 deposits get replaced with new orders of $250).

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What do you think is the breakdown of this backlog? Is it mostly auto? this woud be huge. over 5M vehicules?

 

[dgodfrey]

I think it's way too early to tell how good Cybertruck will be and how it compares to Rivian. It has been so long since it was unveiled that it's hard to tell what the final product is really going to be. The specs have changed and we don't really know the price.

I expect it to be an incredible, ground-breaking vehicle. But we really don't know. Elon was saying that they were working to get the costs down. Who knows what tradeoffs will need to be made?

Only thing I’d like to point out here is the track record for Tesla seems to be a fair bet it will exceed expectations. Has Tesla ever sold something that ended up missing the mark outside of scheduling? If they did, it must have been irrelevant based on the highest customer satisfaction rating in the Industry for the past five years.
As much of a dreamer and optimist that Elon appears to be, the production specs have generally matched or beat the reveals.
Some examples:
Premium interior for the model three became standard.
215 miles/50kWh battery, actual 220 miles/54kWh battery
Plaid performance negates need for plaid plus
Model Y range of 300 miles, Actual 326

 

[Beltsbear]

I am afraid CT has become too much of Elons personal toy, things like self opening doors which truck people don’t need but will add to the cost and complexity.

And four wheel steering. I want the $49k dual motor version with my $7k FSD (locked in?), but now afraid it will be priced beyond my reach.

 

[Speedr117]

I am afraid CT has become too much of Elons personal toy, things like self opening doors which truck people don’t need but will add to the cost and complexity.

I think it's cheaper to have a motor to pop the door than cut a hole in the stainless steel for the door handle. Remember, these aren't stamped parts.

 

[Speedr117]

And four wheel steering. I want the $49k dual motor version with my $7k FSD (locked in?), but now afraid it will be priced beyond my reach.

Who knows. But I'm sure the 4 wheel steering will only be on the top of the line model, or if it's really expensive, as an option.

 

[Krugerrand]

Tesla was very risky around 2017. They could have gone bust trying to ramp Model 3. You couldn't be sure they would make it.

That’s a hindsight comment. Nobody outside Tesla had any idea how close to bankruptcy they were during Model 3 ramp.

 

[dm28997]

That is an excellent question, in my opinion.

In the US insurance companies are regulated at a State level with near-absent Federal regulation. This quickly becomes arcane, so anybody who is Really curious can start here:

insurance

www.law.cornell.edu

There are many other sources but the Cornell piece gives a handy idea of most issues.

At the simplest the primary advantage of insurance companies for a pure investor is that they can manage investments largely free of taxation by managing reserves. There are, of course, many different regulatory regimes that led historically to many US insurance companies officially domiciled in Missouri. The fundamental issue is to make certain that reserves are always adequate to cover claims. Hence, many ( like Berkshire Hathaway) are fond of reinsurance because, handled well, premiums are collected long before the very infrequent claims arise. The odd catastrophe (say, Russia seizing leased aircraft) is deferred a long time by legbal efforts to avoid forcing payout.

For Tesla specifically the highly unusual advantage is in risk management directly, using actual known evidence of a specific risk (i.e. driver accident probabilities) that is superior to that normally used by underwriters. While not unprecedented sustainable underwriting advantage is exceedingly rare. As for reserves management it is less likely that Tesla would have significant advantage. They could, but auto risks are shorter in duration than are more typical longotailed risk categories, so reserve management tends to be less 'active'.

I believe Tesla Insurance will make roads very safe and benefit Tesla's bottom line but it will also disrupt the insurance industry. We have 3 Teslas and monitor our Safety Score. My wife was above 95 for quite a while and I was at 92. When looking at the reasons for different scores, I was following too closely or aggressively turning. In the last week my wife's score dropped to 85 and mine went up to 95 so I won. LOL. She said that was due to double yellow she had to go over to avoid an object which I scoffed at. It was aggressively turning and I think hard braking that dinged her score. She took the advice and got her score back up to 90. The point with this is that people like to save money and some little changes will do that. We are in California so this apparently doesn't count yet. We don't have Tesla insurance but wish to get it esp. if they can include home insurance. Of course with FSD the car will be better than average drivers and I believe this is true now.
I also want Tesla Insurance since the claims and repair should be fast and done properly. I don't believe analysts consider the insurance part of Tesla along with Optimus, FSD, energy, etc.

I avoid FUD as much as possible but do get Time Mag. as it covers the Ukraine war thoroughly. In the most recent issue Elon is on the cover again but this time holding a bird cage with tweeters. Some interesting viewpoints are covered in the article but it drags up the pedo comment making the diver out to be a hero and ignoring the twitter exchange where the diver told Elon to shove his idea ......where the sun don't shine. Time does get money from various sources so I'm not surprised at the bias. I am hoping that Twitter gets better and I already noticed less bots(or it's my imagination?)

 

[Baumisch]

Yep. In addition, Superchargers for the most part have vastly superior locations and spacing for long distance travel. Then there is the matter of reliability, not to mention convenience and EV integration for winter pre-conditioning.

The AFDC database barely starts to provide a basis for comparison of the charging networks

For perspective - in Germany SuC have the „cheap“ locations outside the highways, sometimes a few miles/minutes ouf of the routes whereas „the competition“ aka. EnBW, Ionity and others are on the highway stations directly on-route and price-wise Tesla is expensive with 52ct/kwh compared to 30-45ct/kwh for EnBW/Ionity if you have premium subscription.

 

[hobbes]

For perspective - in Germany SuC have the „cheap“ locations outside the highways, sometimes a few miles/minutes ouf of the routes whereas „the competition“ aka. EnBW, Ionity and others are on the highway stations directly on-route and price-wise Tesla is expensive with 52ct/kwh compared to 30-45ct/kwh for EnBW/Ionity if you have premium subscription.

Agree, however reliability, high number of charging points per site, and ease of use are on Tesla´s side.

 

[UkNorthampton]

For perspective - in Germany SuC have the „cheap“ locations outside the highways, sometimes a few miles/minutes ouf of the routes whereas „the competition“ aka. EnBW, Ionity and others are on the highway stations directly on-route and price-wise Tesla is expensive with 52ct/kwh compared to 30-45ct/kwh for EnBW/Ionity if you have premium subscription.

I also believe that in Germany (or some parts), access to public land depends on a charging network being universal rather than a single make. Obviously CCS for 3/Y, experiments in a few countries to allow other makes to charge, so maybe Tesla can get access to some new premium sites on public land in future.

 

[Baumisch]

I also believe that in Germany (or some parts), access to public land depends on a charging network being universal rather than a single make. Obviously CCS for 3/Y, experiments in a few countries to allow other makes to charge, so maybe Tesla can get access to some new premium sites on public land in future.

Don't wanna get too much OT - so keeping it investor centric:

I am not sure how the opening of the SuC-Network will play out.

US - In the home market Tesla is still using it's proprietary connector which to me is a bit odd going forward. Something has to give as the USA transitions to 100% EVs over time - and I don't think the Tesla connector is gonna be the standard.

EU - Tesla already switched to CCS but still I'm not sure how this will play out as still today Tesla is setting up new sites with the "weird" of stall-placement that expects all cars to have the plug on the left rear panel. I won't fight if this is the right location, it's just not reality today and even for Teslas that tow, have bike racks etc. doesn't make a lot of sense. Tesla is opening chargers as we speak but the placement of the stalls makes adoption hard.
And the pricing - well, let's see how this plays out - either Tesla is making big bucks or the others are making losses to gain market share - don't know which to believe.

China/APAC - I have no idea of this market.

TBH - I'd love to be convinced Tesla will own the charging market, and I think Tesla would deserve it with their speed of rollout and the size of their stations - but the design of the stalls just seems odd with this target in mind.

 

[dhanson865]

If Tesla has 80% of the US market share why shouldn't they be able to dictate the plug standard?

The other companies have had 10 years to convert and yet they haven't.

It isn't a proprietary plug just because Tesla is the only one using it. They have offered to let anyone use it.

 

[Skryll]

If Tesla has 80% of the US market share why shouldn't they be able to dictate the plug standard?

The other companies have had 10 years to convert and yet they haven't.

It isn't a proprietary plug just because Tesla is the only one using it. They have offered to let anyone use it.

Thats why I was really excited to see aptera showing a prototype of one of their solar cars to use teslas standard instead of CCS1, but afaik there is no official decision that thats what they are going to do for production. It would be a great first step in the right direction though, I think Tesla should sweeten that choice for them to allow the landslide to begin.

 

[Ohmster]

Only thing I’d like to point out here is the track record for Tesla seems to be a fair bet it will exceed expectations. Has Tesla ever sold something that ended up missing the mark outside of scheduling? If they did, it must have been irrelevant based on the highest customer satisfaction rating in the Industry for the past five years.
As much of a dreamer and optimist that Elon appears to be, the production specs have generally matched or beat the reveals.
Some examples:
Premium interior for the model three became standard.
215 miles/50kWh battery, actual 220 miles/54kWh battery
Plaid performance negates need for plaid plus
Model Y range of 300 miles, Actual 326

Have to disagree with just the second to last one (bold). I ordered the original Plaid (+). To me the Plaid is not good enough to negate it. It was the range (500+) that was the differentiator. I drive a lot and far. With no free supercharging offered on the premium cars, this annoyed me quite a bit. I love my Plaid. But it ain't no Plaid +.