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

[2daMoon]

Incorrect. I worked in 1964 for $1 an hour. I could buy about 3 gallons of gas more or less. A cheap VW got about 25 mpg and I didn’t care what a coin was made of as long as it got me down the road.

Today for $10 to 15 an hour I can buy about the same amount of gas BUT I can travel much further on that gallon and be safer doing it. I get much more value for that hour of labor In terms of travel value.

This is arguably because the US love affair with our cars and our wonderful people with some ingenuity and values, advanced travel value greatly With better tires, air bags, safety glass, colapsing steering columns and air conditioning. This even ignores the last decade of EV advancement.

The value was advanced by us. We give our currency value through our great people and resources. Can we do better, sure but we have done well and will do better once we unite around a vision for a better future.

Today I hate gas and move everything to electricity which gets me even more value for my labor.

Apples and oranges.

My statement was about time/labor relationship to earnings as a gauge of currency inflation over time.

You are talking about the value from spending on a particular commodity and how that commodity gets more value with a particular car today. This is cherry picking your apples and comparing them to my oranges.

FWIW, I bought $0.17 gas to put in my mini-bike in the late 60s. So got 5 gallons of gas for the same dollar that bought you 3.

 

[petit_bateau]

Comparing $10/MWh solar to the equivalent gasoline price is a good way to get a sense of how revolutionary that is for transportation once that price starts to be achievable in less sunny locations than the Middle East and North Africe.

Saudi Arabia utility-scale solar price:

$10.4/MWh (and dropping)​

....

To predict this just requires willingness to extrapolate the solar cost curve trends of 10-15% per year saved for just 12 more years or so. The cost curve has been steady for about 68 years since 1954 and there is no clear reason to expect the trend not to continue for the foreseeable future. EVs will be cheaper up front and cheaper to operate literally everywhere on the planet, even countries with more oil & gas than they know what to do with.

There are real solar contracts being signed right now in Saudi Arabia, Qatar, UAE, for $10.4-19/MWh. (link link). When materials and logistics shortages calm down, prices will continue dropping.

You are overlooking the social unrest that is coming in the petro-states (ROPEC) and their client-states (primarily but not exclusively the Arab League).

Just using simple numbers for illustration, Saudi Arabia (KSA) may have an average oil production cost of (say) $20/bbl, but it takes approx $80/bbl for KSA to balance its budget. A very large part of that budget is spent on social subsidies (i.e. bribery to stop the peasants revolting) and a fair chunk goes on military, and another substantial chunk goes on keeping the client states (such as Egypt) from collapsing. So when KSA pushed oil price down to $45/bbl to bankrut the US fraccers (and burn Wall St enough to never try bankrolling the fraccers again) that was a decision to run down the sovereign wealth fund (SWF) to bridge the gap.

Crude Oil Prices - 70 Year Historical Chart

Interactive charts of West Texas Intermediate (WTI or NYMEX) crude oil prices per barrel back to 1946. The price of oil shown is adjusted for inflation using the headline CPI and is shown by default on a logarithmic scale. The current month is updated on an hourly basis with today's latest value.

www.macrotrends.net

Frackers could soon face mass extinction

An analyst says that as many as one third of hydraulic-fracturing companies could face extinction.

fortune.com

But in the coming world, when renewables are the dominant energy source, the tipping point comes quite quickly for the fossil fuel prices. This is a forecast I ran in early 2019

The point to note is that total annual build of new fossil-fuel (for increasing demand) + replacement of declining field output (that has to also be built, and is an issue in coal as well as oil & gas was about 816 mtoe in 2018*. So by the early 2030s the implication is that the renewables build rate is such that not a single $ would be spent on drilling another oil or gas well, or digging another coal mine. Clearly along that path there will be periods - because it will be episodic - that fossil fuel prices will spike downwards, and others when they will spike upwards (like now) but by c. 2032 there will be almost no pricing power left in fossils. That point happens to be just before the timing of the peak build-out rate for renewables in 2035.

That in turn is going to collapse the economies of (especially) the petro-states and their client-states, plus the coal-states. Yes, they too may be able to make the transfer to renewables thereby accelerating their own demise, but they will not have anywhere near as great a rentier profit stream from renewables as from oil & gas. At $120/bbl the Saudis are rebuilding their SWF quite quickly - they are in fact banking not $ 120-20=100/bbl into the SWF, but $120 - $80 = $40/bbl into rebuilding the SWF. But as soon as renewables push the oil price much below $80 then it is only a matter of time.

And in the long term there is nothing that KSA can do that will make their sunshine worth $80/bbl. Yes, they might be able to do things that are worth $40/bbl equivalent (and something at about that point might be where the medium-term price settles at as the Western nations do the fastest-switch to renewables), but that $40 ain't going to stop the peasants in Saudi from revolting. And there is no significant extra value in Saudi sunshine vs (say) New Mexico sunshine or (say) Spanish sunshine. Whether in Saudi or Kuwait, or Russia, or their client states such as Egypt, Syria, there is going to come a time that makes the Arab Spring look like a kindergarten warm-up act. I reckong the ruling class have about 10-years left to finalise their exit plans.

Any industrialised nations that are laggards in making this switch are also going to be very vulnerable, but that is a different point arising from the same underlying analysis. In a way we are witnessing that right now with the squealing coming from Orban in Hungary where access to cheap (Russian) oil was what has kept him in power all this time. Come the day when the competitor nations have all switched to (by then) cheaper renewables, the laggard industrial nations still running on fossils will hurt badly. China can see this coming and are moving fast, India on the other hand might struggle to ever get properly established on the development ladder; indeed India will likely be counting its blessings if it can encounter the middle income trap.

===
Footnote: This forcast is mine, the source data for the analysis is

* strictly speaking I included nuclear in the 816 mtoe

 

[Usain]

How can you be sure your Bolt isn't subject to random fires? I thought it was a design issue, or was the issue limited to certain models only?

You can never be sure of that with any car. The recall affected all Bolts manufactured up to that time.

Out of about 140,000 cars produced there were about 15 fires. GM said the fires were caused by two manufacturing defects in the battery pack. Your pack had to have both defects to cause a fire.

GM said they fixed the problem and they offered replacement packs for all 140,000 affected cars. So far, none of the new packs have reported fires.

 

[jbcarioca]

You are overlooking the social unrest that is coming in the petro-states (ROPEC) and their client-states (primarily but not exclusively the Arab League).

Just using simple numbers for illustration, Saudi Arabia (KSA) may have an average oil production cost of (say) $20/bbl, but it takes approx $80/bbl for KSA to balance its budget. A very large part of that budget is spent on social subsidies (i.e. bribery to stop the peasants revolting) and a fair chunk goes on military, and another substantial chunk goes on keeping the client states (such as Egypt) from collapsing. So when KSA pushed oil price down to $45/bbl to bankrut the US fraccers (and burn Wall St enough to never try bankrolling the fraccers again) that was a decision to run down the sovereign wealth fund (SWF) to bridge the gap.

Crude Oil Prices - 70 Year Historical Chart

Interactive charts of West Texas Intermediate (WTI or NYMEX) crude oil prices per barrel back to 1946. The price of oil shown is adjusted for inflation using the headline CPI and is shown by default on a logarithmic scale. The current month is updated on an hourly basis with today's latest value.

www.macrotrends.net

Frackers could soon face mass extinction

An analyst says that as many as one third of hydraulic-fracturing companies could face extinction.

fortune.com

But in the coming world, when renewables are the dominant energy source, the tipping point comes quite quickly for the fossil fuel prices. This is a forecast I ran in early 2019

View attachment 811733

The point to note is that total annual build of new fossil-fuel (for increasing demand) + replacement of declining field output (that has to also be built, and is an issue in coal as well as oil & gas was about 816 mtoe in 2018*. So by the early 2030s the implication is that the renewables build rate is such that not a single $ would be spent on drilling another oil or gas well, or digging another coal mine. Clearly along that path there will be periods - because it will be episodic - that fossil fuel prices will spike downwards, and others when they will spike upwards (like now) but by c. 2032 there will be almost no pricing power left in fossils. That point happens to be just before the timing of the peak build-out rate for renewables in 2035.

That in turn is going to collapse the economies of (especially) the petro-states and their client-states, plus the coal-states. Yes, they too may be able to make the transfer to renewables thereby accelerating their own demise, but they will not have anywhere near as great a rentier profit stream from renewables as from oil & gas. At $120/bbl the Saudis are rebuilding their SWF quite quickly - they are in fact banking not $ 120-20=100/bbl into the SWF, but $120 - $80 = $40/bbl into rebuilding the SWF. But as soon as renewables push the oil price much below $80 then it is only a matter of time.

And in the long term there is nothing that KSA can do that will make their sunshine worth $80/bbl. Yes, they might be able to do things that are worth $40/bbl equivalent (and something at about that point might be where the medium-term price settles at as the Western nations do the fastest-switch to renewables), but that $40 ain't going to stop the peasants in Saudi from revolting. And there is no significant extra value in Saudi sunshine vs (say) New Mexico sunshine or (say) Spanish sunshine. Whether in Saudi or Kuwait, or Russia, or their client states such as Egypt, Syria, there is going to come a time that makes the Arab Spring look like a kindergarten warm-up act. I reckong the ruling class have about 10-years left to finalise their exit plans.

Any industrialised nations that are laggards in making this switch are also going to be very vulnerable, but that is a different point arising from the same underlying analysis. In a way we are witnessing that right now with the squealing coming from Orban in Hungary where access to cheap (Russian) oil was what has kept him in power all this time. Come the day when the competitor nations have all switched to (by then) cheaper renewables, the laggard industrial nations still running on fossils will hurt badly. China can see this coming and are moving fast, India on the other hand might struggle to ever get properly established on the development ladder; indeed India will likely be counting its blessings if it can encounter the middle income trap.

===
Footnote: This forcast is mine, the source data for the analysis is
View attachment 811734

* strictly speaking I included nuclear in the 816 mtoe

A seemingly minor point: Saudi Arabia does not have a ‘peasant’ class. Those are a feature of agricultural societies. The traditional Bedouin society had slaves, but no peasants. Even the slaves were used for domestic chores and animal husbandry.

There is plenty to criticize about such societies; we might as well have the terms correct.
one of the primary internal stress points is the gigantic population of descendants of King Saud, who married his way to create the nation of Saudi Arabia, thus seeding the bloated royal family of today.

It is a serious misnomer to speak of ‘client states’ of KSA. That, too, is not even remotely the nature of the relationships involved.

All of this is only on-topic to the extent that it directly effects material change for TSLA prospects. At present such a connection is only vestigial.

Note: only my opinion, as usual. I did work in SÁ and all the Gulf States as well as non-Arab nearby countries for more than a decade. My perspective may well be biased by my superficiality while there. During that era I resided in Iran, Bahrain, UAE, Yemen and Lebanon. Mostly I worked in Kuwait, Iraq and Saudi while commuting, but was never a resident. I do note the persistent effort by outsiders to view this region with Occidental or Asian perspectives. That persistently itself has created horrible disasters- for millennia, not just recently.

 

[petit_bateau]

A seemingly minor point: Saudi Arabia does not have a ‘peasant’ class. Those are a feature of agricultural societies. The traditional Bedouin society had slaves, but no peasants. Even the slaves were used for domestic chores and animal husbandry.

There is plenty to criticize about such societies; we might as well have the terms correct.
one of the primary internal stress points is the gigantic population of descendants of King Saud, who married his way to create the nation of Saudi Arabia, thus seeding the bloated royal family of today.

It is a serious misnomer to speak of ‘client states’ of KSA. That, too, is not even remotely the nature of the relationships involved.

All of this is only on-topic to the extent that it directly effects material change for TSLA prospects. At present such a connection is only vestigial.

Note: only my opinion, as usual. I did work in SÁ and all the Gulf States as well as non-Arab nearby countries for more than a decade. My perspective may well be biased by my superficiality while there. During that era I resided in Iran, Bahrain, UAE, Yemen and Lebanon. Mostly I worked in Kuwait, Iraq and Saudi while commuting, but was never a resident. I do note the persistent effort by outsiders to view this region with Occidental or Asian perspectives. That persistently itself has created horrible disasters- for millennia, not just recently.

1. I used peasant class as shorthand. The more normal term in that part of the world is "the power of the street". Bottom line, there is a very large chunk of the population who cannot be supported at low oil prices, and crashing their standard of living will have political consequences. (ad in global warming and it could be pretty dire). Would you like to propose a term we can all relate to regarding who those people are ?

2. Client states is again shorthand, as the dependencies are in both directions. But again the impact of reducing financial flows from (eg) KSA to Egypt will have consequences that will be akin to a client state getting cut off.

3. This is relevant to Tesla as part of understanding the bigger picture - where to prioritise and why; where there is likely to be socio-economic upheaval and whether to be exposed to that; etc.

 

[Artful Dodger]

One or more things is behind schedule, in Elon’s opinion. That’s the major takeaway for me from all of this WFH discussion.

I highly doubt that. I think its much more likely that Elon walked into the HR office in Fremont, and there was nobody there. He had to find the janitor to find out that everyone now "works from home". Well, used to...

 

[Todd Burch]

I highly doubt that. I think its much more likely that Elon walked into the HR office in Fremont, and there was nobody there. He had to find the janitor to find out that everyone now "works from home". Well, used to...

That is actually how I picture this having gone in my head, having watched Elon's behavior for the last 13 years.

He was clearly ticked off by something...it came through in the tone of the emails, and in the Twitter response ("They can pretend to work somewhere else"). He needed information from someone and they were not available, or he found evidence that people were slacking at home. That is definitely something Elon won't tolerate, and for good reason. If I had a list of 3 million anxious applicants waiting in the wings, I wouldn't put up with that either.

 

[hobbes]

Results from audit (part of permit) for Giga Berlin partly available, everything seems o.k. so far. Article (second page on twitter) also includes which parts of factory are not running yet (no big surprises there though).

https://twitter.com/x/status/1532326656072892417

Original Article (paywall): Gigafactory Grünheide: Wie werden die Auflagen bei Tesla erfüllt? Erste Ergebnisse der Revision liegen vor

 

[henchman24]

Interesting disconnect from the Nasdaq this morning.

 

[larmor]

One or more things is behind schedule, in Elon’s opinion. That’s the major takeaway for me from all of this WFH discussion.

Maybe they need people in person to get the Cybertruck line working, and logistics in both physical and paperwork, is to be done in person.

 

[Cosmacelf]

So, BYD is buying six lithium mines in Africa. Seems the real Tesla competitor is BYD…

China’s BYD Snaps Up Six African Lithium Mines to Get Ten Years' Supply of EV Battery Materials

www.yicaiglobal.com

 

[TheTalkingMule]

Interesting disconnect from the Nasdaq this morning.

NASDAQ is now positive despite the MSFT drag. TSLA options loves moves this whole market. Looks like the MM algos have given up on a 750 Friday close and we'll slip to 800(799)?

 

[juanmedina]

Working from home has allowed me to lose money trading Tesla . But gosh I love working from home.

Well Elon screwed me over again. We just got an email saying that they are expecting us to go back into the office . Elon please pump the stock so I don't have to go back lol.

 

[Atomsla]

I don't know if this is a reputable source, but if it is, then Giga Shanghai will be back to three shifts and non-closed loop soon.

https://twitter.com/x/status/1532287937961934848

 

[betstarship]

"The other large factor worrying Dimon is the Ukraine war and its impact on commodities, including food and fuel. Oil could hit $150 or $175 a barrel, he said."

Jamie Dimon says 'brace yourself' for an economic hurricane caused by the Fed and Ukraine war

"You know, I said there's storm clouds but I'm going to change it … it's a hurricane," Dimon said Wednesday at a financial conference in New York.

www.cnbc.com

 

[Accident]

I don't know if this is a reputable source, but if it is, then Giga Shanghai will be back to three shifts and non-closed loop soon.

https://twitter.com/x/status/1532287937961934848

June 10 according to Bloomberg: Bloomberg - Are you a robot?

"Elon Musk’s electric-car maker told the more than 10,000 workers living in Tesla’s “factory bubble” to be prepared to stay in the system until June 10, according to the people, who asked not to be named because the plans are private. While movement restrictions are being lifted for residents in low-risk parts of Shanghai, the company wants to have a 10-day buffer to ensure production stability, they said. "

 

[thx1139]

Even David Lee and Rob Maurer (aka Tesla Daily not portraying the WFH change positively, at least in the thumbnails for latest videos. David Lee on Investing "Do this or else". Tesla Daily last video title "Musk Blasts Remote Work, Tesla Employees Must Return Or Resign". Like I said previously saying hey we arent going to remain WFH company is one thing. The manner you say it is important and that is my biggest issue with the change.

 

[TheTalkingMule]

"The other large factor worrying Dimon is the Ukraine war and its impact on commodities, including food and fuel. Oil could hit $150 or $175 a barrel, he said."

Jamie Dimon says 'brace yourself' for an economic hurricane caused by the Fed and Ukraine war

"You know, I said there's storm clouds but I'm going to change it … it's a hurricane," Dimon said Wednesday at a financial conference in New York.

www.cnbc.com

The entity that stands to benefit most from higher oil prices is predicting higher oil prices? Shocking!

 

[TheTalkingMule]

Like I said previously saying hey we arent going to remain WFH company is one thing. The manner you say it is important and that is my biggest issue with the change.

That's not really how Tesla/SpaceX/Boring/Elon operates. It sure looks like this is Elon actively purging people from his entities who care about how he says things more than the mission. Logical move when you have literally the whole globe wanting to work for you.

 

[Cosmacelf]

"The other large factor worrying Dimon is the Ukraine war and its impact on commodities, including food and fuel. Oil could hit $150 or $175 a barrel, he said."

Jamie Dimon says 'brace yourself' for an economic hurricane caused by the Fed and Ukraine war

"You know, I said there's storm clouds but I'm going to change it … it's a hurricane," Dimon said Wednesday at a financial conference in New York.

www.cnbc.com

$175 a barrel in Europe. It won’t get that high in the US since we produce it ourselves.