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

[Thekiwi]

You are going to just believe that article without really thinking this through? I don’t condone such alleged acts but I would say there’s usually two sides to a story. This is business insider we are talking about here, the same publication that employs Linette Lopez.

A big clue might be the fact that it was a 250000 settlement. Whoever this person is either hired the worst lawyer in the world or is not telling the true story here.

We are all so gullible but I love the line about money. You are basically saying you are going to condone it because you love money. Just think about how absurd that sounds.

What? One can invest in a company because they think its a fantastic investment opportunity, but also not agree at all with the political views and/or personal behaviour of the CEO. I don’t see how that is in anyway absurd.

 

[Knightshade]

Tesla has all the technology (plus AI) of Cruise or Waymo, integrated in every single production vehicle-at a cost they can't touch.

No, they absolutely do not have all the tech that cruise or Waymo put in their cars.

That's a major reason they're not crazy expensive to build. They leave out a bunch of that tech- because it's Teslas view most of it isn't needed for self driving.

Right now if you head over to the AI/FSD forum you'll still find plenty of debate over if Tesla is right or not.... one side of the argument is the guys with all the extra tech actually have working L4 robotaxis on the road- today- and Tesla does not. The counter-argument is those companies do have those- but only in a few heavily-geofenced places-and expansion beyond them has been glacially slow and narrow- whereas Tesla is aspiring to work everywhere, even if they're still only offering L2 today.

The timing of this . . . suspicious to say the least.

Elon said the political attacks on him would get worse. Clairvoyant?

Given the news publication had asked him for comment- and even given him extra time to provide it, and he did not- makes it pretty clear he was trying to get out in front of a story he knew was coming.


Interestingly- it's not the victim speaking here-- she's still under an NDA and can't speak (without risking significant legal action)- instead it's a friend who apparently provided a sworn declaration in the original matter (which was resolved in mediation, not court).

Weirdly the friend mentions she didn't want to get the victim in trouble, so called their lawyer before saying anything... and the lawyer clearly told them NOT to share the declaration or any other documents-- then she went ahead and did it anyway, claiming they felt a responsibility to come forward with it.

Which IS odd timing, since the actual incident happened in 2016, and the friend found out about shortly after.


Anyway, there WAS a settlement... so something happened- given Elons stance on not paying a penny if nothing was actually done wrong.

But right now we only have a third party version of events--- and that might be ALL we get for NDA reasons.

Fun thing here is Elon and SpaceX are limited in what they can say about it, without potentially risking releasing the victim from her NDA.

 

[Gigapress]

I've seen this counter argument to a stock buy back many times but it's always been a flawed counter argument and doesn't really hold any weight to me

The reality is that a Robotaxi service is at least 1.5-2 years away. I think we can all agree on that. With each Gigafactory, we have an idea of just how much one can add to FCF once it's at volume production. We have two new factories going through that process right now. And Shanghai has a further expansion ahead of it. By the time a Robotaxi fleet needs to be built, and remember a lot of 3/Y's will be coming off lease by then that will be inducted into the fleet, Tesla will likely have 5-6 Gigafactories at volume production. You're talking 5-6 billion in FCF every quarter.

A robotaxi fleet isn't going to need 500,000 vehicles right at the start. It will grow over time. Let's say Tesla wants 150,000 Model 3's to act as a Robotaxi for the first year in the US. That's roughly 5.2 billion for Tesla to build those 150,000 Model's ($50k ASP minus gross margin - 35K cost to Tesla to build).

So just one quarters FCF will cover the start of the Robotaxi service.

But wait........you're forgetting another important aspect. If a Robotaxi fleet needs to be made, well then that means FSD has been solved and FSD is already in wide release, unlocking billions in additional profits and cash. I don't know why people don't get this. If Robotaxi is a thing.....then FSD was completed, unlocking huge levels of profits and cash. You can't have one without the other.

And lastly, it completely ignores the point of the post that I made. In that, it's better for Tesla to use the extra 2 billion in FCF per quarter for stock buy backs, especially when the stock has been cut in half by 50%.

Say Tesla succeeds with FSD, and then needs capital for Robotaxi, then they can do a offering......ya know I think Tesla's market cap just might be a bit above where it is today in a scenario where FSD is achieved


Tesla has 2022 already mostly sold out. The only trims that aren't are the high end 3/Y's. Tesla's order log is about recession proof as possible. Tesla has no debt and 18 billion in cash. Tesla is already prepared for a recession. In fact, I'd say they're overprepared. But that's never a bad thing.

It is bad to just have cash sitting there while you generate 2 billion more in cash each quarter in high inflation environment.

Elon’s frequent comments about the fleet awakening with a bit flip seem to indicate that there is no plan for a long, drawn out Tesla Network rollout if we take them at face value which is usually a safe bet with him since he talks literally. Tesla is all about speed.

We are also living in an unceasingly tragic road safety emergency that Tesla wants to solve ASAP, and besides it’s directly advantageous to the sustainable energy mission to deploy Tesla network as fast as possible to displace ICE miles quicker. If you listen to the passion in Elon’s voice in the Financial Times interview when was talking about FSD safety and he adamantly said “if we believe it will reduce the probability of injury…we will do the right thing and get sued”, you can see how he views the moral importance of FSD’s role in society. If I remember correctly, the FSD program was started because a Tesla driver passed out at the wheel and fatally struck someone riding a bicycle and they decided they should develop active crash avoidance software. Every day of delay is more funerals and more hospital visits that could’ve been avoided.

So the main question is, will the demand be there so quickly? I would predict that a fleet of 500k Robotaxis (3/Y/2024 one) sitting in inventory could almost instantly be valuable and deployed.

The US alone has 326 cities/incorporated areas with at least 100k population.

The average American household is spending $10k on transportation out of average after-tax income of $70k for 14% of their income. For the lower class this percentage is more like 20%-40% because in the vast majority of the USA there is little to no decent mass transit options such that people are left with no good option except to drive cars they can barely afford, leaving them one reliability failure from missing a shift and potentially losing their job. The Tesla Robotaxi is being heralded as the lowest-cost transportation option ever. I doubt many people would be willing to pass up on the savings if it takes the edge off of paying bills and getting frustrated driving through traffic. Once a few people start using the service they’ll rave so hard about how great it is that FOMO will kick in and demand will rise rapidly. As long as the service is safe, convenient, cheap and comfortable I think word will spread fast locally.

Millions more in the middle and upper classes are busy and stressed by the logistical difficulties of shuttling their kids around town between school and activities and would welcome some relief. And teenagers under driving age will love to be able to visit friends or go out without having to be chauffeured by an adult. Most teens are somewhat embarrassed being seen around their parents, can barely afford their own car if not being gifted one by family, and they generally care more about looking cool than worrying about safety so I doubt they’ll be concerned about perceived risk.

We also have the adult party demographic who want to get drunk and not have to drive themselves home. Robotaxi will catch on quickly with them too. Rides will be dirt cheap late at night when overall demand is lower.

If all else fails, delivery companies like Doordash, Instacart, Uber Eats, Grubhub and Leafly could easily soak up the services of several hundred thousand robotaxis probably in a matter of weeks. Doordash alone has an army of 2 million couriers. They could just make a new model where restaurants drop off the food in the car and it heads off to the customer.

At Tesla’s estimated $30k per year profit per car, a Robotaxi would need around 1 year to pay for its upfront expenses from fare profits. So, scaling at a rate higher than 100% would require working capital just for paying for CoGS on each vehicle. But then they’ll also be spending many billions up front on actively expanding factories, installing charger capacity, and developing mines and refining facilities. So the combined effect is that the sheer rate of production growth at 70-80% per year (“or probably faster than that in the future”) will swamp the influx of profits and require a lot of cash, probably at $1-3B per quarter.

Then there’s virtual power plants. Tesla is quietly maturing Autobidder, partnering with major real estate developers, and registering as a utility in Texas and other jurisdictions. What if they make 10 GWh per quarter (Lathrop production) of Megapacks for themselves at $200/kWh? Another $2B per quarter CapEx. Now suppose they 10x solar deployments from today by ramping production and buying up supply from other manufacturers. 1 GW of solar per quarter at $1/W is $1B per quarter. Extreme scale for VPP development needs $3B per quarter at this rate. On top of this, maybe they’ll start buying existing solar and wind assets for in order to squeeze more value out of the with Autobidder and profit off the arbitrage while accelerating the phase-out of fossil fuel plants.

An upcoming Indonesian battery Terafactory could be another $1-2B per quarter too.

Investment opportunities will outpace cash generation for the foreseeable future.

Pierre Ferragu asked on the call about how Tesla will spend $500B cash by 2030, and the response was:

Elon Musk: (47:05)
…That seems like a lot of cash. I don’t know. We’ll try to do something useful with it. [inaudible 00:47:31] that’s for sure.​

​

Zach Kirkhorn: (47:36)
I think we have to take this one step at a time. We have investments that are happening right now to get Austin and Berlin up and running. And then as Elon mentioned, installing capacity for robotaxi production. And there’s some decisions that, as Elon alluded to, just to share in the future about and what the economic model looks like for robotaxing. And so the way Elon and I have discussed this is-​

​

Elon Musk: (48:13)
Sorry. Maybe just, yeah … Yeah, everyone just mute if you’re …​

​

Zach Kirkhorn: (48:19)
Yeah. So our focus is to get to the point where robotaxis are on the road, Optimus is in use, get the economic model for that dialed in, and then evaluate the size of cashflows at that point and make decisions then as to what’s next.​

So it doesn’t sound like share buybacks are on the table any time soon.

 

[Knightshade]

How about using some of the cash to buy a stake in a chip maker ?

Tesla doesn't have enough cash to buy a controlling interest in any of the biggest players... and trying to buy one of the "smaller" ones like say UMC would still run well north of 10 billion dollars for 51% (the bigger ones would run into the hundreds of billions)

Not to mention buying something like UMC would have multiple regulator obstacles... FTC would hate it because they supply a lot of other automakers....and Taiwan would hate it for foreign control reaons.

 

[ClimateOptimst]

This is a fallacy promoted by people that . . . have never actually talked to these people.

They have zero beef with solar in particular, and love the self-reliant aspect of it.

What they do have a beef with is:
1) Made in China Solar (they WILL bring this up)
2) What happens when the sun goes down? They have to be better educated on this, the concept of batteries that last all night is not intuitive to them.
3) Cost - time to payback is important (and it's VERY long in the southeast USA, where power is super cheap at about 10c/kwh).

You get past those three things, you make a sale to them easy.

You might ask how I know these things? I've got a lot of family in this area, and the topic of conversation always comes up at family gatherings and they see my Tesla (which they don't have a problem with, btw - - they just want a more "traditional" looking truck to schlep around in).

Thing that greatly reduced our payback time on our house solar install in the Northwest where electricity is also cheap ($0.08/kw) was slightly overbuilding the system so it also powers the wife's MY. My rough payback calcs went from 30 years to 10 years, and that was before the recent gas price spike. Positive synergies and capital efficiencies from the consumer side is why tesla will dominate the world regardless of current and future dramas...

 

[Singuy]

So the lady was so disgusted by Musk and SpaceX that she sued Musk for cutting her hours....

 

[wipster]

Man, people fly off the handle so much these days it's insane. We - the common public - know almost nothing about this story. If Elon is the type of person to engage in this behavior, other accusations will surface. Until then, best to just let it percolate.

I think SpaceX and Elon need to hit this hard with a multimillion dollar defamation lawsuit (assuming that there's nothing to it, which I do) and shut this kind of crap down as soon as happens. Otherwise you're going to see grifters in search of money or Elon haters come out of the woodwork with a ton of accusations that are untrue, cannot be proven, but just like testimony that the jury is told to ignore will not be forgotten by the public. Need to just say STOP IT!!! or Elon will be the next Al Franken. Maybe that's why he warned about the dirty tricks campaign on Twitter...

 

[elasalle]

Even my X delivery got pushed out from July to Dec. So much for Trips's Fremont ramp ....

EM cares, he knows with the SP down, I didn't want to sell any shares/CC's in July

 

[bkp_duke]

Tesla doesn't have enough cash to buy a controlling interest in any of the biggest players... and trying to buy one of the "smaller" ones like say UMC would still run well north of 10 billion dollars for 51% (the bigger ones would run into the hundreds of billions)

Not to mention buying something like UMC would have multiple regulator obstacles... FTC would hate it because they supply a lot of other automakers....and Taiwan would hate it for foreign control reaons.

It also doesn't make much sense because AMD is such a close partner with Tesla and have shown that they will work with them to custom build just about anything Tesla needs. When you have a partner like that, buying a stake in them doesn't advance your mission.

 

[TN Mtn Man]

It's a nothingburger related to Tesla. He probably did wrong, that's why the settled. SIX YEARS AGO.

Yeah, someone's been holding onto this "gem" for the right time in order to try to smear him.

Unlike some here, I don't worship at the alter of Musk, but I do believe he is an overall good person that does a lot more right than he does wrong.

EDIT - the settlement most likely has an NDA, and such. That's why the "friend" is releasing the info, not the person alleged to have been involved.

This crap is literally out of the political playbook.

The article says there is one. The woman violated the terms of the NDA contract.

 

[vikings123]

What? One can invest in a company because they think its a fantastic investment opportunity, but also not agree at all with the political views and/or personal behaviour of the CEO. I don’t see how that is in anyway absurd.

I was just comparing it to the second tidbit where you said you were going to cancel your model Y. You could easily justify that by saying Elon is not the one that works on the shop floor. If you are focused on the company why not buy their products too to support your investment.

 

[bkp_duke]

The article says there is one. The woman violated the terms of the NDA contract.

I thought it was the woman's "friend" that she told, and that was the woman reporting it, not the alleged victim.

 

[insaneoctane]

We don't know what happened. A $250,000 settlement suggests a weak case and Elon and SpaceX wanted to put it to rest.

Does all the $250K go to the "Flight attendant" or does she split that with her lawyers?

 

[wipster]

The article says there is one. The woman violated the terms of the NDA contract.

Well not really as the "friend" knew about the supposed incident straight away before the NDA was signed, so technically the flight attendant didn't violate it. Now whether their claim is untrue, that's another thing altogether. I really question why the "friend" brought it up now however and it's probably the first of the dirty tricks Elon discussed, possibly because Business Outsider recently questioned him about it.

 

[⚡️ELECTROMAN⚡️]

Thanks for the personal attack, much appreciated.

I can only imagine that you think you would be capable of doing the same thing in his position. Why else would you be so quick to think it's true? I find it pretty easy to believe it's a lie.

 

[Thekiwi]

I’m not quitting my TSLA investment, but this forum increasingly proves to be a giant elon circlejerk.

I’m out. (Which I’m sure many of you will enjoy)

I wish everyone the best with their TSLA investments.

 

[Gigapress]

Why don’t we wait for more facts to emerge about the allegations before we spend 10 pages speculating about this and getting mad at each other?

 

[ZsoZso]

"The attendant worked as a member of the cabin crew on a contract basis for SpaceX's corporate jet fleet". They are trying to make this a me too movement against Elon "if any other women have been victimized by Musk, they ought to come forward"

Count down until Amber Heard raises hand: 3...2....1...

 

[mickle]

Even my X delivery got pushed out from July to Dec. So much for Trips's Fremont ramp ....

EM cares, he knows with the SP down, I didn't want to sell any shares/CC's in July

I had an X set for July 2022 also, just went to look and now it says

Estimated delivery: Dec 2022 - Apr 2023

They didn't even send me a notification.

I would buy Elon a horse if he could get it to me next month.

 

[Amped412]

Whether it’s true or not, this will damage SpaceX and Tesla’s reputation as long as Musk is CEO. A lot of people believe the press whether you do or not.