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

[Beltsbear]

SpaceX employees draft open letter to company executives denouncing Elon Musk’s behavior

The letter calls on ways for SpaceX to fix its reputation and culture.

www.theverge.com

 

[Ogre]

You don't think the Lyriq looks cool as heck?

I’m pretty sure the people who designed it were locked in a room watching the Transformers movies for 48 hours non-stop before they produced it.

What happens to customers who are paying the new higher prices and then watch prices decline at the back end?

What happens to orders locked in at lower prices that are pushing out into a higher-rate environment and who will be hit with higher financing costs?

When prices actually start to decline that will be a potential problem. I suspect Tesla has some levers they can pull to avoid just outright lowering prices.

Tesla doesn’t control interest rates. Yes, it sucks to end up paying more due to higher interest rates, but people buying a Ford are seeing the same issues.

 

[MP3Mike]

Assuming prices even come down in the first place, what would happen is that those customers will either:

1. Deal with it and take delivery
2. Cancel their order and get back in line to wait for another 12 months to get the new lower price

Interest costs are a small portion of the overall purchase cost, by the way, especially since people who can afford a $50k+ car tend to have good credit ratings.

There is a third option: Tesla will normally lower the price of existing orders when the lower the price of the vehicle. The only people that end up feeling "screwed" are the ones that purchased shortly before the price dropped. But with as far as Tesla is with orders they are likely to be able to avoid that.

 

[AndrewZ]

I’m pretty sure the people who designed it were locked in a room watching the Transformers movies for 48 hours non-stop before they produced it.

When prices actually start to decline that will be a potential problem. I suspect Tesla has some levers they can pull to avoid just outright lowering prices.

Tesla doesn’t control interest rates. Yes, it sucks to end up paying more due to higher interest rates, but people buying a Ford are seeing the same issues.

Hmmmm you think prices will stay elevated longer term?

I don't think wild price swings are in anyone's best interests, price stability is and is part of what the Fed is trying to achieve and control with interest rates

 

[SunCatcher]

What happens to customers who are paying the new higher prices and then watch prices decline at the back end?

What happens to orders locked in at lower prices that are pushing out into a higher-rate environment and who will be hit with higher financing costs?

 

[thx1139]

There is a third option: Tesla will normally lower the price of existing orders when the lower the price of the vehicle. The only people that end up feeling "screwed" are the ones that purchased shortly before the price dropped. But with as far as Tesla is with orders they are likely to be able to avoid that.

Didnt Zach and Elon in Q1 call even mention cutting prices if COGS dont materialize as they are preparing.

 

[FireMedic]

What happens to customers who are paying the new higher prices and then watch prices decline at the back end?

What happens to orders locked in at lower prices that are pushing out into a higher-rate environment and who will be hit with higher financing costs?

I certainly hope (but no not expect) that the market allows for Tesla to lower prices at some point. I would expect that existing reservation holders would also see those price reductions.

The only people getting ‘boned’ are the people buying new ICE cars right now...If you want to worry on someone’s behalf; I suggest you start there.

 

[replicant]

SpaceX employees draft open letter to company executives denouncing Elon Musk’s behavior

The letter calls on ways for SpaceX to fix its reputation and culture.

www.theverge.com

Maybe Elon owning Twitter will give him the opportunity to learn about using multiple accounts Creating and managing multiple Twitter accounts | Twitter Help and allow investors, employees and the public to have the option to follow his work and companies but not the memes?

Right now, following @elonmusk to follow @tesla (which is a must for investors, since his account is recognized by the company as its official communication channel) is like sign up to a website to pay a service and being automatically subscribed to unrelated newsletters, on crypto news, political endorsementss, dick jokes, mocking the left, etc.

I have hope.

 

[Ogre]

Hmmmm you think prices will stay elevated long term?

That is generally the way inflation works.

But lets picture a scenario where demand for the Model Y slacks off and Tesla needs to do something with prices to stimulate sales. What do you do?

Seems to me the best route would be to upgrade the Model Y LR and Model Y Performance (Air suspension, hardware 4, longer range, etc etc) and introduce a “Lower end” Model Y which is comparable to today’s Model Y.

Comfortable margins leaves Tesla a lot of levers they can pull here to make things right as rain for their customers.

 

[thx1139]

Hmmmm you think prices will stay elevated longer term?

I don't think wild price swings are in anyone's best interests, price stability is and is part of what the Fed is trying to achieve and control with interest rates

I have thought that the new GigaTexas 279 mile Model Y is priced to closely to the Model Y LR. Could this be a way to make some more room between them and indicate that Tesla is closer to making the new Model Y orderable on the Website?

 

[henchman24]

Sorry, but disagree. If the contactors are undersized (problem Tesla had in the early S), there is no other solution but to replace them. You can buy time by throttling power, but not fix the problem.

I think you're right on the the only way to fix the problem and maintain the performance and charging of the vehicle. Cutting back the performance below the capabilities of the contactors is a solution and basing it off Ford's plan to over the air update, that is the route they are taking.

 

[StarFoxisDown!]

Days like today are what has been absolutely destroying this stock. Doesn't matter how much TSLA outperforms on a small macro up day because it's been consistently underperforming on big macro down days. We had actually been seeing a really nice trend this week and end of last week where TSLA was consistently outperforming it's beta on both up and down days.

We'll see how much weaker it gets today. Was outperforming it's beta, only down 1.5X the macros, now past it's 2X beta and heading for down 3X. This dynamic has really killed any and all momentum in the stock for months now.

Btw a lot of Put action on TSLA options today. I think it's more likely we see 600 this Friday than the actual max pain of 660.

 

[ZeApelido]

Jim Chanos is still around with some FUD.

But hey at least he thinks Tesla isn't going to go bankrupt!

https://twitter.com/x/status/1537432938840662017

 

[AndrewZ]

That is generally the way inflation works.

But lets picture a scenario where demand for the Model Y slacks off and Tesla needs to do something with prices to stimulate sales. What do you do?

Seems to me the best route would be to upgrade the Model Y LR and Model Y Performance (Air suspension, hardware 4, longer range, etc etc) and introduce a “Lower end” Model Y which is comparable to today’s Model Y.

Comfortable margins leaves Tesla a lot of levers they can pull here to make things right as rain for their customers.

I like this angle but has it been the pattern with Tesla's previous price swings?

The Model S LR started out at $96.5k in 2018, dropped to $69,420 at the start of 2021, and is now at $104,990

 

[Ogre]

Maybe Elon owning Twitter will give him the opportunity to learn about using multiple accounts Creating and managing multiple Twitter accounts | Twitter Help and allow investors, employees and the public to have the option to follow the companies and filter the memes out? I have hope.

Translation of the letter:

“Please keep paying me $500k/ year, but STFU on Twitter already!”

If people want to make a genuine statement here talking with their feet is the best and likely only way they will make any real statement. But these people are sacrificing nothing to make this “bold” statement.

Very few people who disagree with their company executive‘s politics are willing to actually make sacrifices to back that disagreement up.

I hear Blue Origin and their entirely safe on Twitter CEO is looking for rocket scientists.

 

[M|S|M MYP]

 

[bkp_duke]

Lots of materials going into ICE vehicles are affected. A huge chunk of car materials cost are steel and aluminum. Also secondary things like copper and the cost of finished electronics (chips, etc).

The big problem ICE vehicles have is the cost of operating them has massively increased. This increased the premium an EV supplier can charge for their vehicle. It is a price increase which customers see but vehicle makers cannot affect. Every dollar gas goes up increases the amount people are willing to pay for EVs. That makes it tougher for ICE vehicle makers to increase prices, so if they are less affected by inflation, they are also less able to increase prices.

Interestingly enough, a lot of the materials you listed are down from their recent highs, so hopefully there is some relief in sight. Sadly they are all still up substantially over the past 2 years.

Aluminum - Price - Chart - Historical Data - News

Aluminum increased 72 USD/Tonne or 3.02% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Aluminum - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Steel - Price - Chart - Historical Data - News

Steel decreased 361 Yuan/MT or 9.19% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Steel - values, historical data, forecasts and news - updated on March of 2024.

tradingeconomics.com

Copper - Price - Chart - Historical Data - News

Copper increased 0.36 USd/LB or 9.31% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Copper - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Lithium is the big exception:

Lithium - Price - Chart - Historical Data - News

Lithium increased 13,000 CNY/T or 13.47% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Lithium - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Fortunately, there are not tons of Li in each battery pack (something like 100-200kg if memory serves)

 

[AndrewZ]

Interestingly enough, a lot of the materials you listed are down from their recent highs, so hopefully there is some relief in sight. Sadly they are all still up substantially over the past 2 years.

Aluminum - Price - Chart - Historical Data - News

Aluminum increased 72 USD/Tonne or 3.02% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Aluminum - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Steel - Price - Chart - Historical Data - News

Steel decreased 361 Yuan/MT or 9.19% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Steel - values, historical data, forecasts and news - updated on March of 2024.

tradingeconomics.com

Copper - Price - Chart - Historical Data - News

Copper increased 0.36 USd/LB or 9.31% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Copper - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Lithium is the big exception:

Lithium - Price - Chart - Historical Data - News

Lithium increased 13,000 CNY/T or 13.47% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Lithium - values, historical data, forecasts and news - updated on April of 2024.

tradingeconomics.com

Fortunately, there are not tons of Li in each battery pack (something like 100-200kg if memory serves)

What we really need to be asking here is why are material/commodity prices decreasing when demand is apparently so high?

It could be manufacturing capacity throttling that is reducing material prices, like from China's COVID measures trickling through the supply chain. Or it could be reduced manufacturing across Europe in response to high natural gas prices.

 

[henchman24]

Days like today are what has been absolutely destroying this stock. Doesn't matter how much TSLA outperforms on a small macro up day because it's been consistently underperforming on big macro down days. We had actually been seeing a really nice trend this week and end of last week where TSLA was consistently outperforming it's beta on both up and down days.

We'll see how much weaker it gets today. Was outperforming it's beta, only down 1.5X the macros, now past it's 2X beta and heading for down 3X. This dynamic has really killed any and all momentum in the stock for months now.

Btw a lot of Put action on TSLA options today. I think it's more likely we see 600 this Friday than the actual max pain of 660.

Today is basically the same beta as yesterday. The past week the beta is closer to 1 (1.23). Tesla fell to 620 on May 24th when the Nasdaq was 3% higher at its low that day. Since last part of May, Tesla has been consistently outperforming its normal beta during this drop. Days like today hurt, but Tesla has held stronger in this pullback than the previous ones and by a good margin.

Now I agree 600 is likely coming at some point, maybe even 560-580... but that will being coming when the Nasdaq goes for the next leg down (I think a 10k test is coming).

 

[bkp_duke]

Jim Chanos is still around with some FUD.

But hey at least he thinks Tesla isn't going to go bankrupt!

https://twitter.com/x/status/1537432938840662017

Chanos is a moron that continues to value Tesla solely on their automotive value, not on their value as a tech or energy company.