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

[petit_bateau]

Bean counter note: Tesla is a monthly reporter for VAT received and spent due to turnover amount, not a quarterly reporter.

Tesla intrastat VAT reports must be a bundle of fun !

There is another second order aspect of this. Rather like the days payable vs days receivable, in a rapidly growing profitable business (which tesla Europe is) you get some extra advantage from the vat recovery on the current month that is bigger than the last month but had yet to make it through the production cycle but can be netted off against current month sales. A mild amplifier for cash in hand.

I swear I'm an engineer and it was the people on the other class that did the MBA.

Regarding price, believe it or not EU is a very competitive market. Tesla is in a good place, but it doesn't mean competition is absent. There is a continuum between price setter and price taker, and whilst Tesla is a price setter it is not an absolute. There is not another 10k to be had by upping price. Buyers might switch to VW etc, or might simply hold their clunker for another year. I am doing just that. ...

 

[jkirkwood001]

The world's car buyers are ready to go electric

More than half of global buyers say their next car will be electric.

www.axios.com

View attachment 810544


"Consumer interest in electric vehicles has hit a global tipping point, with more than half of car buyers saying they want their next car to be an EV, new research from Ernst & Young shows."


"
52% of respondents to EY's annual Mobility Consumer Index who are looking to buy a car want an EV, according to the survey of 13,000 people in 18 countries.

• That's a leap of 22 percentage points in two years, and the first time that EV interest exceeded 50%, the company said.
• Buyers in Italy (73%), China (69%) and South Korea (63%) were the most interested.
• Consumers in Australia (38%) and the U.S. (29%) showed less interest.

"

Thanks @betstarship

Here's the E&Y source posting, where you can see other results, some of which you can drill down on by country:

EY: Why consumers are charging toward electric vehicles

 

[scaesare]

Without knowing if his numbers are correct I believe that number $9.4B is based on used EV prices in the US continuing being this high for the next 3 years. While not impossible I wouldn't assume that.

Yeah... hence my inclusion of his words "up to" in my quote of him.

Even if only half that amount, it could be over 2X the range of quarterly profit he mentioned....

 

[NicoV]

So if Tesla actually only pays let's say half of the VAT and the rest is passed on from their suppliers, then in our German Y Perf example the total revenue would be

64970 - 10373 * 0.5 + 2500 + 980 = EUR 63k = USD 68k which is in line with N American pricing. If I remember correctly, Germany has the lowest Tesla prices of any major Euro/Middle East/N Africa market, so there still is a real price premium for Berlin Ys, but a few thousand USD-equivalent less than I had thought before today.

VAT is irrelevant for a company’s revenue/profit/whatever, since it’s a tax on end users. Whatever calculation you want to do to evaluate a company’s performance, use prices excluding VAT (both for sales and costs). The imbalance between received and payed VAT may have a slight impact on cash position, but the imbalance is always eliminated by the companies periodic VAT declaration. Note that inside the EU (but not within a single country) companies from different countries can just invoice each other without VAT.
So for Tesla EU car sales (or for comparing pricing to other regions), the reported amounts are always excluding VAT.

 

[Krugerrand]

Drew Baglino.

Elon is doing a lot and is the public face, but the team is stacked DEEP with great people who are in some ways better suited for the Technoking role. Tesla would do very well with Drew Baglino running the show. With Elon's time split between Tesla, SpaceX et al, I'd have to think Drew is already leading much of the time in practice. Drew is one of the earliest Tesla employees, having joined in 2006 and worked alongside Elon and JB the whole time.

Those at the top of the food chain can't stop the solar cost trend, which has been going on longer that Elon has been alive, and if he dies I guarantee that the martyrdom effect will kick in and galvanize the renewable energy community for years.

View attachment 810584

The US military/NATO, NASA and FCC want Starship/Starlink capabilities, so it wouldn't be stopped. The US Department of Defense is, of course, the world's most powerful organization and thus they tend to get what they want. In this case, that's for the better.

Boring Co can't be stopped either, and Elon's barely even involved in that. Steve Davis seems to be doing just fine as CEO. Vegas Loop is already under construction and has ample local political and business support. Fort Lauderdale's first Loop is in preliminary planning and geotechnical review. Miami may be up next. These systems are in major tourist destinations and they will be so obviously amazing that more cities will want their own Loops and it'll expand nationwide and then globally.

Not good enough. You under estimate what Elon does, has done, will do. Elon, quite literally, paves the way for everyone else to shine and work unencumbered.

He’s not just the face, or the guy who drums up money, or the guy that says we don’t ever give up no matter how dire or hard the circumstances, or the guy who gets Governments to give him full control of his factory for the first time in history, or the guy who defies county officials and says, ‘if you have to arrest someone, arrest me’, or the guy who shames the crooks into letting SpaceX bid on government and military contracts, et al. He’s also the whipping boy.

When somebody complains about their Tesla solar, they don’t go on Twitter and complain to Drew that he didn’t spend enough time on the non-tile stuffs. No. Elon takes that blame, every single time and then makes it his business that it gets fixed.

No, your choice is not even close to being good enough.

 

[Max Plaid]

I realized today I might've been majorly misinterpreting European prices and if so I'll need to adjust my earnings model. As an uncultured American, I'm accustomed to seeing sales tax added after the listed price and I'm not sure I understand how the value added tax (VAT) works.

For example, in Germany (link) the Model Y Performance is listed for 63,990 € and in the details window the English-translated statement is:

Pay the vehicle price by bank transfer to become the owner of your vehicle after delivery.​

​

Cash payment price 64,970 €​

​

Incl. VAT of approx. 10,373 €​

​

Processing fees of 980 €​

​

Incl. €2,500 environmental bonus (net)​

How much revenue would Tesla receive from this order? Is the VAT embedded in the 64970 € cash price? Is the environmental bonus also embedded in the listed price where the government pays 2500 to Tesla, or is it a personal tax credit?

If Tesla only gets 64970-10373 = 54597 € = $ 58.8k then the revenue on a German Perf Y is $10k less than in the US. That would be surprising to me considering the fuel price situation in Europe right now and the lack of supply of Teslas with Berlin barely making anything yet and Shanghai having been restricted so much this year.

Sure, but it's €70k in Belgium and €73k in Ireland - I have not idea why so much less in Germany...

We paid just under €75k for my wife's M3P in December, which included €13k VAT and €1k delivery/road tax

 

[Max Plaid]

The UK Model 3 inventory is now full of ex leases. Definitely this has become a thing.

My goodness, that's a bigly crap-ton of used Teslas there in the UK, lots of them with very low mileage, there's almost nothing in Belgium...

 

[Gigapress]

Not good enough. You under estimate what Elon does, has done, will do. Elon, quite literally, paves the way for everyone else to shine and work unencumbered.

He’s not just the face, or the guy who drums up money, or the guy that says we don’t ever give up no matter how dire or hard the circumstances, or the guy who gets Governments to give him full control of his factory for the first time in history, or the guy who defies county officials and says, ‘if you have to arrest someone, arrest me’, or the guy who shames the crooks into letting SpaceX bid on government and military contracts, et al. He’s also the whipping boy.

When somebody complains about their Tesla solar, they don’t go on Twitter and complain to Drew that he didn’t spend enough time on the non-tile stuffs. No. Elon takes that blame, every single time and then makes it his business that it gets fixed.

No, your choice is not even close to being good enough.

I agree with all that, just not the part about us all being "screwed" if he dies. Such a tragedy would be a major setback because Elon is a major catalyst accelerating the timeline, but we've already made it past the tipping point for mission completion in my estimation. Solar and battery prices were being driven down at this same learning curve rate even in the 1980s and 1990s when Elon was in school and then doing Internet stuff.

I mean, already today wind and solar are dominating new power plants in the USA (link) and coal plants have been retiring early and coal mining & refining companies have been filing for bankruptcy for years (link). Even the once-mighty Peabody Energy, the largest coal mining company in America, filed for bankruptcy in 2017 and has been warning since 2020 that they are dangerously close to insolvency again! I will bet $1000 to anyone who wants to take it that Peabody will file for Bankruptcy Part Deux within the next five years or get a government bailout. The USA has immense reserves of coal and natural gas and relatively little regulation restricting coal & gas power plants compared to most other developed nations, yet this is still happening due to simple profit-seeking market forces. It's happening even in Texas, with is even more deregulated, has even more government favoritism of oil & gas, and has a gigantic geological endowment of natural gas. As of today, the majority of this utility market action globally is coming from the rest of the industry, not Tesla Energy.

Even nations in the Middle East, which of course have a strong vested interest in the perpetuation of the hydrocarbon mining industry, have been installing solar PV projects at a furious pace. Moreover, even Saudi Arabia, which is an outlier for having the cheapest, biggest reserves of oil & gas on the planet where their cost is about $10/barrel (link), decided to IPO Saudi Aramco and as of 2021 is now installing solar for wholesale prices of $10/MWh and dropping (link). If I'm not mistaken that is a new world record for cheapest electricity ever. A barrel of oil is equivalent to 1.6 MWh, so at their production cost of around $10/barrel, they're getting energy from oil for about $6/MWh. Tthis means at current rates of cost improvements, around 2027 Saudi Arabia will have cheaper energy from solar PV than from oil. Let that sink in. If you assume the electricity can be used at 80% net efficiency and the oil at 30% net efficiency, in a sense it's already cheaper today.

Tesla doesn't even operate in Saudi Arabia and Elon has been beefing with their government since the funding secured fiasco.

If both the Americans and the Saudis are transitioning to solar, wind and batteries, I think it's safe to say the rest of the world will. The question is how fast, and how cheap does it ultimately get?

 

[Krugerrand]

I agree with all that, just not the part about us all being "screwed" if he dies. Such a tragedy would be a major setback because Elon is a major catalyst accelerating the timeline, but we've already made it past the tipping point for mission completion in my estimation. Solar and battery prices were being driven down at this same learning curve rate even in the 1980s and 1990s when Elon was in school and then doing Internet stuff.

I mean, already today wind and solar are dominating new power plants in the USA (link) and coal plants have been retiring early and coal mining & refining companies have been filing for bankruptcy for years (link). Even the once-mighty Peabody Energy, the largest coal mining company in America, filed for bankruptcy in 2017 and has been warning since 2020 that they are dangerously close to insolvency again! The USA has immense reserves of coal and natural gas and relatively little regulation restricting coal & gas power plants compared to most other developed nations, yet this is still happening due to simple profit-seeking market forces. It's happening even in Texas, with their deregulated electricity market, low subsidies for renewables, and huge natural gas supply. As of today, the majority of this utility market action globally is coming from the rest of the industry, not Tesla Energy. Even nations in the Middle East such as Saudi Arabia, which of course have a strong vested interest in the perpetuation of the hydrocarbon mining industry, have been installing solar PV projects at a furious pace for wholesale prices now beginning to dip below $10/MWh, which if I'm not mistaken is a world record for cheapest energy ever unless we want to count grabbing some sticks from the ground and burning them.

We are not past the tipping point. When POTUS gives credit to another, arguably less American company, for leading the electrification of transportation, we aren’t past the tipping point.

When WallStreet has analysts and financial experts that regularly go on TV to blatantly lie about Tesla, TSLA and the state of affairs with other companies, pushing a money agenda that lines their pockets, we are not past the tipping point.

When the state of CA (and others) puts up roadblocks preventing the common man from disconnecting from the grid and/or being their own power supplier, we are not past the tipping point.

When a group of people, under the guise of being for the environment - but are not - can slow the building progress of a factory meant specifically to save that country and add to the already cumbersome bureaucracy of that country, we are not past the tipping point.

When wannabe politicians take out prime time slot TV ads and splice together You Tube videos they’ve no business using to scare people off Tesla, we are not past the tipping point.

Do you require me to add dozens upon dozens of other examples, or do you understand now that we are not anywhere near past the tipping point?

 

[FEERSUMENDJIN]

What an absolutely lovely shade of skin tone.

Had to match her iPHONE

 

[Gigapress]

We are not past the tipping point. When POTUS gives credit to another, arguably less American company, for leading the electrification of transportation, we aren’t past the tipping point.

When WallStreet has analysts and financial experts that regularly go on TV to blatantly lie about Tesla, TSLA and the state of affairs with other companies, pushing a money agenda that lines their pockets, we are not past the tipping point.

When the state of CA (and others) puts up roadblocks preventing the common man from disconnecting from the grid and/or being their own power supplier, we are not past the tipping point.

When a group of people, under the guise of being for the environment - but are not - can slow the building progress of a factory meant specifically to save that country and add to the already cumbersome bureaucracy of that country, we are not past the tipping point.

When wannabe politicians take out prime time slot TV ads and splice together You Tube videos they’ve no business using to scare people off Tesla, we are not past the tipping point.

Do you require me to add dozens upon dozens of other examples, or do you understand now that we are not anywhere near past the tipping point?

Things being imperfect right now is different than being past the tipping point. If I have a big pile of dry leaves and I use a lighter to burn a couple leaves, then a tipping point has been reached where even if I walk away, the whole pile will burn on its own from a self-sustaining chain reaction. This is true even when 99% of the pile is not currently on fire.

Those lies and fossil fuel corruption long predate Elon's involvement in the automotive and energy industries and he's been mostly unsuccessful in stopping it, yet Tesla and the rest of the industry have managed to make exponential growth happen at astonishing rates, and now Tesla and the industry have hit positive cashflow and market competitiveness. That's what the tipping point is: when the technology has matured enough that capitalism and politicians' desire for power will make the most efficient solution dominate very quickly. Whoever moves fastest and innovates quickest can make the most money and the solar and utility storage markets are already brutally competitive. Model 3, Y and Cybertruck are market-slaying products and demand for them would be 10x higher if more people actually understood the value proposition. Finally, from the sounds of things, Tesla's Solar Roof tech just needs some relatively straightforward installation problems solved and it'll be a killer product that people will want whether Elon's in charge or not. The Governor of freaking Texas just rolled out the red carpet for an electric vehicle and battery factory that will directly help kill oil & gas demand. That is also a sign that we've passed the tipping point.

The best thing a good leader can do is leave behind a culture that persists and I think Elon has done that.

 

[FEERSUMENDJIN]

My goodness, that's a bigly crap-ton of used Teslas there in the UK, lots of them with very low mileage, there's almost nothing in Belgium...

Business leases of EVs had zero benefit in kind so have been very popular since 2019

 

[Usain]

Thanks for the reference. I think I learned more from that interview than the last five Elon interviews put together.

 

[Buckminster]

https://twitter.com/x/status/1530243844205424641

 

[Maarten]

.

As I recall, Elon mentioned something recently about curtailing drones once the factories were operational.
Probably safety and IP concerns.

OK, I am not only an investor and a civil engineer, but also a colonel (ret. not so long ago).
In modern warfare the 'new' big threat are drones.
It is easy to play havoc on just about anything with explosives combined with a drone.
I will not delve into that deeper, but I think everybody here will get the picture.
No matter how much I like to see the movies of the expansion of Tesla too, it only makes sense to restrict flights.
In order to protect the interest of Tesla and of all of us here.

 

[Usain]

NEW - Drew believes no energy storage technology has been fully leveraged yet, not only lithium ion batteries but also gravitational, compressed air, and other battery types, in part due to regulatory structures

Thanks for the summary! I was going to go back to watch again and take notes, but now I don't have to.

I'm not as bullish as I used to be on other storage types and I don't think regulatory structures are the problem here. The storage race has fallen into the same trap as so many other technologies. That is, when a technology like the lithium battery solves a problem really well, it eats up all the research dollars to make it better and cheaper.

As time goes on, it becomes less and less likely that gravitational, compressed air, flow batteries, liquid metal, and others will be able to garner enough research dollars to fund the breakthroughs needed to compete.

 

[ItsNotAboutTheMoney]

Thanks for the summary! I was going to go back to watch again and take notes, but now I don't have to.

I'm not as bullish as I used to be on other storage types and I don't think regulatory structures are the problem here. The storage race has fallen into the same trap as so many other technologies. That is, when a technology like the lithium battery solves a problem really well, it eats up all the research dollars to make it better and cheaper.

As time goes on, it becomes less and less likely that gravitational, compressed air, flow batteries, liquid metal, and others will be able to garner enough research dollars to fund the breakthroughs needed to compete.

Other storage isn't competing with lithium ion. But lithium ion batteries have the combination of the transportation and grid markets, where others are just competing for grid. And they aren't just competing against, storage, they're competing against generation.

 

[Prunesquallor]

.


OK, I am not only an investor and a civil engineer, but also a colonel (ret. not so long ago).
In modern warfare the 'new' big threat are drones.
It is easy to play havoc on just about anything with explosives combined with a drone.
I will not delve into that deeper, but I think everybody here will get the picture.
No matter how much I like to see the movies of the expansion of Tesla too, it only makes sense to restrict flights.
In order to protect the interest of Tesla and of all of us here.

Most companies would consider it blatant industrial espionage. The droners need to move on.

 

[Usain]

Other storage isn't competing with lithium ion. But lithium ion batteries have the combination of the transportation and grid markets, where others are just competing for grid. And they aren't just competing against, storage, they're competing against generation.

Yea, lithium batteries have more utility, which is another reasons it attracts a lot more research dollars.

Good point about competing against generation. And I take it you also mean that storage competes against transmission.

 

[hobbes]

The more I think about it it seems like the 61k includes whatever VAT new sales have in Germany. Probably around 8-10k in this case. While the 40k they are now willing to pay you does not include any VAT. So the difference is more like 50k to 40k from Teslas perspective.

Also, price increases for used cars seems to be much lower in Europe than in the US.

In Europe you can pretty much kiss the value of the VAT part of the price goodbye the minute you pay for a new car. This is why, and this is only based on people I know on both continents, not on any real statistic, much fewer people in Europe upgrade to a new car every year than in the US. Unless your job that can deduct VAT pays for it.

Yeah the 61k includes VAT, should have said that (didn´t because I´m used to dealing only with prices including VAT).

I don´t understand why the VAT part you paid is lost from the car´s value? Imagine I buy the car and pay the VAT and immediately decide to sell it. Someone in the market for a new car doesn´t care if he pays 61k to Tesla and Tesla pays some of that as a tax or if he pays the same price to me, so the value should not be lost (obviously it doesn´t work that way for other reasons like warranty and trust that the car is without issues etc., but you get my point). He gets the same car for the same money.

Also I don´t get why this should be different in Europe - only because prices are communicated without VAT you still have to pay it in the end, right?