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

[M|S|M MYP]

Thanks for the clarification and to clarify myself, I also think P/E compression definitely continue to happen in the stock and also agree that the 1250, maybe 1350 area, could be the ceiling for the stock this year.

Then moving into next year, I see the trading range being between 1250-1600. 2024 maybe 1600-2000. And then in 2025, it sits between a 2 trillion and 2.5 trillion valuation. I'm definitely not one of those that thinks TSLA hits a 2 trillion valuation next year.

So yes, continued market cap increase each year while at the same time having ongoing P/E compression.

So this means i have to keep working till at least 2025??

 

[Nocturnal]

I'm sure the service lady knows no more than the Beta test drivers.

For anyone wondering whether Elon's promise for this year would be hit (vs earlier years) ..... here is the bit I really want to know. What is the disengagement rate of FSD Beta now ?

From all available crowd sourced (and obviously not scientific) data, it seems to be about 1 in 10 miles. I estimate human like error rates at 1 in 10,000 miles. So, FSD Beta needs to improve 100x to 1000x to come to human level (a large range to account for inaccuracy in estimates). Can that happen this year ... ? Suffice to say I won't be depending on it happening this year for my trades.

Heck, I'm not particularly enraptured by Beta as it is but I'd say it's better than 1 in 10 miles per disengagement.

Of course listening to the CSR at a Tesla location about the status of FSD is like asking your bank teller how the FED is handling monetary policy.

 

[thesmokingman]

JPow is going thru his speel.

Lmao, market is already going full on red.

 

[Dutchie]

Frankly, I'm skeptical that any of this actually occurred. Teslas, like all cars do have component failures, but the piling on of the Tesla employee story just doesn't ring true. If she did say these things, her opinion of Tesla's engineering is no more valid than anyone else's. When I factor in that your never have anything positive to say about Tesla. I'll discount the report until documented.

What do you mean I have never have nothing positive to say. I am one of the first proponents of Tesla. Spend many weekend afternoons at the store helping sales. If people had questions to real owners I helped them out. I also helped with deliveries at end of quarter rush.
The lady I am talking about is someone I know well. She has been working there for years. I know her real name and have known that she worked at Lexus before. Do you want me to upload the invoice or something?

 

[Dutchie]

I am curious, what kind of mileage are you talking about here? 100k? 200k? 500k? "High Mileage" is rather vague.


I'm not sure she is in a position to have a big scoop on FSD. I'm not completely sold on it hitting by end of year either, but I'm not sure I would take the word of someone at the service center as gospel on this.

It is 170,000 km so 105,000 miles. I know things can break down after a while and I was totally prepared for that but these high costs - with the fact That I can expect a similar amount soon - is something I was really taken aback. I have known the lady for years at Tesla and I believe her that she sees many model X’s coming in with similar issues.

 

[Big Time]

Powell seemed to say more 50 points are possible, didn't lean into the. .75

 

[StarFoxisDown!]

Yep that is exactly what I'm expecting to see. We stay beneath $1250 this year despite blowout quarters and rapidly increasing production, and then sometime in mid-late next year we finally break out big time because the PE is way too low for the financials and growth.

And then it rockets upwards out of control again as Tesla goes into beast mode with no room beneath it for Wall Street to play their games.

The caveat, for me at least, is if Tesla beats my GAAP EPS of $13.72 for 2022. If they come in materially higher than that, I do think 1500 is possible by the end of this year.

I think there's a reasonable chance that Tesla does beat that GAAP EPS number, mainly due to Shanghai. If Shanghai is indeed targeting the production rates that have been mentioned in the past couple of days by the CPCA, then earnings could be significantly higher than my numbers. The operational leverage out of Shanghai would take another huge step higher. Gross margins might not increase that much, but operating margin will explode higher.

If that scenario does play out and Shanghai realized those production gains in Q3/Q4, then 1.55-1.6 million deliveries is possible and GAAP EPS for Q3 and Q4 could be in the neighborhood of $4.00-4.50 for Q3 and $5.00-5.50 for Q4.

If Tesla prints GAAP EPS $4.50 for Q3, then no way 1250 is the ceiling for 2022. The P/E compression would be too much

 

[Big Time]

JPOW also just mentioned "Soft landing" could be good....

 

[M|S|M MYP]

The caveat, for me at least, is if Tesla beats my GAAP EPS of $13.72 for 2022. If they come in materially higher than that, I do think 1500 is possible by the end of this year.

I think there's a reasonable chance that Tesla does beat that GAAP EPS number, mainly due to Shanghai. If Shanghai is indeed targeting the production rates that have been mentioned in the past couple of days by the CPCA, then earnings could be significantly higher than my numbers. The operational leverage out of Shanghai would take another huge step higher. Gross margins might not increase that much, but operating margin will explode higher.

If that scenario does play out and Shanghai realized those production gains in Q3/Q4, then 1.55-1.6 million deliveries is possible and GAAP EPS for Q3 and Q4 could be in the neighborhood of $4.00-4.50 for Q3 and $5.00-5.50 for Q4.

If Tesla prints GAAP EPS $4.50 for Q3, then no way 1250 is the ceiling for 2022. The P/E compression would be too much

Ok...so there's a chance i don't have to work until 2025.....WHEW!

 

[Singuy]

Have to sell stock for repairs …

My Model X started making some weird noises coming from the front suspension. Brought it in for service. Changed
- aft link assembly (both sides)
- fore link assembly (both sides)
- tie rod ball (both sides)
- driven Hub (both sides)
total costs over $5,000

After picking it up I noticed there were still noises so I brought it back again. Now the air spring needed replacement. Additional cost $3,500

I was very taken aback. Where are all these people telling me they drive 500.000 miles with only changing the washer fluid? I talked to the lady at the reception and she said that this is normal for higher mileage Model X. They are now coming in in droves with similar issues. She has worked at other high-end dealerships (Lexus. Mercedes) but she never seen anything like this with Model X. The other day there was a client who needed both front and rear suspension repair. Total cost $16,000!

The lady told me that Tesla - being a newer company- doesn’t have the experience in designing good suspensions and now we are paying the price for that.

We also talked about FSD. She told me to not hold our breath for having this anytime soon. My believe in Tesla is shaken to its core..

Yes, expect high mileage model X to have more issues than normal. It is almost a 5.5k pound car so expect even the highest quality parts to wear. Lighter cars will have less wear and tear.

 

[Todd Burch]

Market shooting up, so I guess he's done talking?

 

[Singuy]

JPOW also just mentioned "Soft landing" could be good....

He said that every meeting, but just like Tesla reiterating guidance, the minute the call is over everyone freaks out and forget 2 months into production and we repeat it all over again.

 

[traxila]

Lemme guess, he stopped talking, it was decided he didn't say anything stupid and the NAZ spiked 150 points instantly.

EDIT: Nah, still talking. Think he said 75 basis points was not on the table.

EDIT TWO: Really no reason for 75 basis points if you are hiking 50 at a time. Who honestly believes it matters whether you reach 3% in five months or in seven months? Or that you can even measure a difference in the outcomes?

Only the most insanely hypersensitive algos and traders.

 

[bkp_duke]

Lemme guess, he stopped talking, it was decided he didn't say anything stupid and the NAZ spiked 150 points instantly.

He's still talking, he just discounted the possibility of a 75 bps rate hike, that appears to be what the markets are liking.

 

[GOVA]

Elon supporting Chappelle with others.

here

I worry because it has not been a safe event at all.

 

[Dutchie]

If this "believe in Tesla is shaken to its core" comment was sarcasm; the standard etiquette is to close with a (/s).

Perhaps it was a bit hyperbolized. The car drives like new now. But we just depleted our emergency fund for some other issues and to sell stock to pay for these repairs is a real setback. Talking to the lady who was so negative about the Model X was also a downer.
We have never driven high end cars before. Our last car was a Hyundai Santa Fe. Never had these kind of costs with it. I just wish I new before so I could prepare for it. Now I know that I should build a reserve for when it happens again in 105,000 miles.

 

[Iain]

Lemme guess, he stopped talking, it was decided he didn't say anything stupid and the NAZ spiked 150 points instantly.

EDIT: Nah, still talking. Think he said 75 basis points was not on the table.

Stay tuned. He’s really trying to keep the market calm with his tone and carefully chosen words,but some of the reporters are asking questions where he could slip up

 

[TheTalkingMule]

"Soft landing" and "not currently considering" .75pt raises for the next few meetings is quite dovish IMO.

To me this translates to something equal to or less than the consistent .5pt raises for the next few meetings. Opens the possibility of ratching down to .25 if deemed appropriate.

Good stuff for the summer IMO. My big worry was that MM's and hedgies would have a backdrop of Fed fear for the whole summer, which makes manipulations even easier for them.

 

[Dutchie]

Yes, expect high mileage model X to have more issues than normal. It is almost a 5.5k pound car so expect even the highest quality parts to wear. Lighter cars will have less wear and tear.

I realize that now…

 

[Motor Mouth]

Perhaps it was a bit hyperbolized. The car drives like new now. But we just depleted our emergency fund for some other issues and to sell stock to pay for these repairs is a real setback. Talking to the lady who was so negative about the Model X was also a downer.
We have never driven high end cars before. Our last car was a Hyundai Santa Fe. Never had these kind of costs with it. I just wish I new before so I could prepare for it. Now I know that I should build a reserve for when it happens again in 105,000 miles.

FWIW - Dutchie's been a pretty regular member of TMC and not a TSLAQ type at all. I just assume these comments are the shock of having to pay a bunch of money for unexpected repairs. Believe me, I've been there. I owned a MB C class after all. Never got out of the shop for under $2000 regardless of why I brought it in there. I felt exactly like you feel now. All I can say is that at least it was at 100K instead of 25K for you. Totally understand how you feel, though. Nobody likes to get this kind of surprise. Hang in there.