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

[Singuy]

So let's say we are in a recession, how does that negativity impact Tesla *exactly*?

This hand wringing while having incredible demand is odd.

It only affects Tesla stocks as we see Elon is doing everything to weather any kind of recession storm. Here are a couple of issues that may come up.

1. Recession may cause supply chain disruptions as poorly managed part of the supply chain goes under.

2. It compresses the multiples of all companies as major big ones project lower than expected earnings. Of course exceptional companies will follow with the compression or else in a sea of companies like Google with a PE of 20, a Tesla with a PE of 200 seems ridiculous even with the growth.

 

[hobbes]

UPDATE: something big (?) will be announced by Johnna Crider after July 1st - and it isn't in the interview

Someone please recap all events likely to possibly shock next week, starting Tuesday July 5th - looks like the near future could be chaotic - or not

Or maybe Elon / Tesla's Twitter team is just hot testing Twitter's algos - so a Twitter induced TSLA shock?

The EMSK Elon show goes on 24x7

View attachment 822578

And the beat show goes on

You write the big change "isn´t in the interview", but the tweet actually says that the big change is "not the Elon interview". While this seems minor at first, it changes the perspective/scope significantly IMHO - from something that would have been expected to be mentioned by Elon but wasn´t (something regarding Tesla/SpaceX assumably) to something new in Johnna´s world (the interview was a big thing for her but it is not the big change she is tweeting about). Maybe overinterpreting but seemed worth pointing out.

Also if this is a big change in the Tesla/Elon scope coming on July 1, she likely wouldn´t be able to hide it until "a couple of days later" to announce.

So I think we all should take a deep breath and relax !

 

[Discoducky]

It only affects Tesla stocks as we see Elon is doing everything to weather any kind of recession storm. Here are a couple of issues that may come up.

1. Recession may cause supply chain disruptions as poorly managed part of the supply chain goes under.

2. It compresses the multiples of all companies as major big ones project lower than expected earnings. Of course exceptional companies will follow with the compression or else in a sea of companies like Google with a PE of 20, a Tesla with a PE of 200 seems ridiculous even with the growth.

Good points and to reply to them

1. True, however, if Tesla has good relations with end to end supply chain participants, they should be able to help them weather the storm/recession as they have such a huge backlog. I'd be optimistic here as Tesla will continue to ramp up, even if we see other car companies go under, to keep suppliers solvent. Sure, we could see a massive recession, causing some suppliers to lose >50% of their contracts/throughput, but if they see this coming and can re-tool or start to move to making more Tesla parts (with the insight that Tesla will continue to increase demand) they should be able to stay afloat.

2. Totally get that and I am worried about Q2 knocking SP down as well, but Q3 should be massive (already looking forward to the Oct earnings call)

 

[PKEllefsen]

Tesla's IR dept compiles the Analyst Consensus for Q2 deliveries. There were 20 analysts that confirmed they adjusted for China COVID lockdown and their consensus is 256.7k vehicles. If you add in the 5 analysts who did not confirm that they adjusted for China Covid lockdown you get 25 analysts with consensus of 266.8k. As Gary points out, you can calculate that the 5 analysts have an average of 307.2k.

I feel certain that the media will go with the 266.8k expectation.

https://twitter.com/x/status/1542025187310403585

Oh damn the general consensus is waaaay different from my own projections

 

[Knightshade]

Tesla's IR dept compiles the Analyst Consensus for Q2 deliveries. There were 20 analysts that confirmed they adjusted for China COVID lockdown and their consensus is 256.7k vehicles. If you add in the 5 analysts who did not confirm that they adjusted for China Covid lockdown you get 25 analysts with consensus of 266.8k. As Gary points out, you can calculate that the 5 analysts have an average of 307.2k.

I feel certain that the media will go with the 266.8k expectation.

https://twitter.com/x/status/1542025187310403585

One thing I noticed here is they never has S/X annual getting much above 80k.... which is still ~20% below where S/X sales had peaked a few years ago... I wonder is the assumption just that many buyers are happy to go with smaller/cheaper EVs- or perhaps now that there's some full size lux EVs from Mercedes and others that sales won't be as high as they used to be?

Of course, the estimates also have YoY deliveries for all models below 50% increase every year on the chart (WAY below in some years) but there's also no CT or anything else new on the chart so probably can't read too much into that.

 

[cliff harris]

One thing I noticed here is they never has S/X annual getting much above 80k.... which is still ~20% below where S/X sales had peaked a few years ago... I wonder is the assumption just that many buyers are happy to go with smaller/cheaper EVs- or perhaps now that there's some full size lux EVs from Mercedes and others that sales won't be as high as they used to be?

S/X used to be the only option. Lots of people like me got an S because there was no model 3 in my country, and to-date still no performance model Y where I live. meanwhile, as people like me trade down to the smaller car, there are S/Xs available secondhand in reasonable numbers now.
I think the S/X *could* sell more in future, but they definitely suffer from internal competition from 3/Y. When I get my new model Y it will outperform the model S I sell in every metric.

 

[Discoducky]

One thing I noticed here is they never has S/X annual getting much above 80k.... which is still ~20% below where S/X sales had peaked a few years ago... I wonder is the assumption just that many buyers are happy to go with smaller/cheaper EVs- or perhaps now that there's some full size lux EVs from Mercedes and others that sales won't be as high as they used to be?

Of course, the estimates also have YoY deliveries for all models below 50% increase every year on the chart (WAY below in some years) but there's also no CT or anything else new on the chart so probably can't read too much into that.

I assume Tesla is prioritizing Model Y throughput, but if they wanted to could ramp up S/X to take over the market, but that wouldn't be optimal for the vision of sustainable energy.

I found this chart and had to laugh as Tesla isn't on it and Genesis, Crysler and Kia are.

 

[PKEllefsen]

Oh damn the general consensus is waaaay different from my own projections

I guess it makes sense to add this table as well:

 

[Singuy]

Good points and to reply to them

1. True, however, if Tesla has good relations with end to end supply chain participants, they should be able to help them weather the storm/recession as they have such a huge backlog. I'd be optimistic here as Tesla will continue to ramp up, even if we see other car companies go under, to keep suppliers solvent. Sure, we could see a massive recession, causing some suppliers to lose >50% of their contracts/throughput, but if they see this coming and can re-tool or start to move to making more Tesla parts (with the insight that Tesla will continue to increase demand) they should be able to stay afloat.

2. Totally get that and I am worried about Q2 knocking SP down as well, but Q3 should be massive (already looking forward to the Oct earnings call)

I think Q2 will surprise everyone like how Tesla surprised everyone Q1 of 2020 and SP will do okay. We are at peak bad news for Tesla. Layoffs, btc impairments, one time restructuring cost, China shut down, 4680s not ramping, and Elon being attacked politically. I mean what else is left in a quarter besides a meteor hitting every Tesla factory on earth (famous last words)?

 

[CLK350]

If China continues current covid-policy, lock downs will continue recurrently. Covid-19 is not going to disappear.

TL;DR: China's Covid policy is a red herring - no real effect on supplies except as decided by the CCP/ Xi Jinping - thinking out loud: combined with their ambition to continue to grow their dominance over the US, what with Russia/ Ukraine making them a key player, what would they do that maximizes their efforts?

Long form: Covid-19 is past history - like the seasonal flu with its variations/ mutations* it's here to stay, Not to say that story is dead, actually the experimental vaccines will be the next story if allowed to surface. To stay on topic: the China Shanghai situation was an internal political struggle between the Xi Jinping leading clique and Li Keqiang's adversary whose stronghold is in Shanghai.

We know full well how to deal with Covid in its mild and elevated forms; dealing with the repercussions of the mRNA vaccines is a developing story or non-story.

The CCP used Covid-19** to essentially make all Shanghai residents prisoners in their own dwellings - thus punishing Li's clique.

** Covid related topic referenced to special thread to avoid polluting this thread with multiple opinionated posts, few if any of which done with a real back to basics thinking (we really are stuck thinking like our pack, it's a matter of evolution, most "successful" people have learned to delegate to others they trust. Not claiming I'm different, just less stuck /s

 

[jkirkwood001]

...We don't know what type of pack the CT will have, but IMO it is very unlikely that the Semi will have a structural pack.

Whatever issues Tesla may or may not have with 4860 production and structural packs, they don't seem to be show stoppers. Some 4680s and structural packs are being made.

It is likely that the issues are yield, linespeed, reliability, problems that can be overcome with some time and effort.

Even assuming the worst case that the problems linger on beyond Q1 2023, there are other sources for cells and other ways of making battery packs.

If the problem is yeild and machinery reliability, Tesla has solved similar problems in the past.

Q: What makes you say that? I can see arguments both ways:

• The CT requires greater rigidity and impact resistance than a smaller road car = No structural pack
• Structural pack is the optimal Tesla design for all new vehicles = yes structural pack

Have we any other indicators?

 

[15Peter20]

Oh damn the general consensus is waaaay different from my own projections

$560 million trillion is a bit pessimistic for 2030.

 

[The Accountant]

Oh damn the general consensus is waaaay different from my own projections

Ah - A forecast that would make any accountant's heart flutter !!. Very Nice !!
Your 2025 numbers are slightly more bullish than mine except in one glaring area: Your P/E ratio.
If Tesla has a P/E ratio of 30 in 2025, it has become IBM. The P/E ratio will at least be double that, imo. I am projecting 80.
In 2025, Tesla will only be in the 3rd inning and embarking on Master Plan, Part Quatre.

 

[hobbes]

Can´t help but think these Ys in Berlin look redish under their white covers, especially comparing to the white tent in the background
(Also from Tobi Lindh´s latest vid)

 

[ZachF]

Oh damn the general consensus is waaaay different from my own projections

Not bad.

I do suspect though that when Tesla’s profit exceeds ~$50b you’re going to start seeing buybacks and the number of shares will begin to decline.

 

[PKEllefsen]

Ah - A forecast that would make any accountant's heart flutter !!. Very Nice !!
Your 2025 numbers are slightly more bullish than mine except in one glaring area: Your P/E ratio.
If Tesla has a P/E ratio of 30 in 2025, it has become IBM. The P/E ratio will at least be double that imo. I am projecting 80.
In 2025, Tesla will only be in the 3rd inning and embarking on Master Plan, Part Quatre.

I used to have a PE of 60 in all my forecasts, but i sleep better at night pricing down to 30 My problem was that net income dropped very sharply when looking into 2026-2030 if i was not including FSD. If robotaxi's become a thing, you could easily double net income and 3-4X the PE for 2025. But i don't feel the need to add it into the valuation model. For me it's all about knowing the potential without FSD, and if FSD gets solved ill just consider it a bonus. Also PE's have been a bit too inflated the last 5+ years.

 

[StealthP3D]

I don't think tesla need to change their interior now at all, but when a certain scale is reached, and when demand starts to match supply, I'd be sympathetic to them introducing a higher priced trim level for the 3 and Y that caters more to the 'chrome and leather' market. Whether we like it or not, people ARE buying porsche taycans and audi e-trons, and it sure isn't for the charging network, or the performance or technology!

It's true, Porsche and Audi are selling the 12 model versions of the Taycan and 7 model versions of the e-Tron to the people who still think leather and chrome are cool. Last year Porsche sold 41,296 Taycan globally and Audi sold 29,100 e-Tron.

Which means, of the global auto sales of 67.7 million vehicles, Taycan shaved off 0.06% and e-Tron took 0.04% of sales or only 0.1% combined. I think Tesla should continue to concede the leather and chrome market to Audi and Porsche and be glad someone is providing people having more 'discerning' tastes with EV's. I'm all for Tesla releasing higher cost trim levels eventually, but hopefully they are not based upon leather and chrome but actually offer additional functionality or durability.

 

[ZachF]

The spread between Brent and WTI is now over $6, which means that US oil supply is probably beginning to come online.

 

[ZachF]

I used to have a PE of 60 in all my forecasts, but i sleep better at night pricing down to 30 My problem was that net income dropped very sharply when looking into 2026-2030 if i was not including FSD. If robotaxi's become a thing, you could easily double net income and 3-4X the PE for 2025. But i don't feel the need to add it into the valuation model. For me it's all about knowing the potential without FSD, and if FSD gets solved ill just consider it a bonus. Also PE's have been a bit too inflated the last 5+ years.

Energy should begin to be a large source of revenue by the end of the decade.

If you have ~1 TWh of stationary storage sales in the early to mid 2030s that’s $200b in revenue at $200/KWh.

 

[CLK350]

S/X used to be the only option. Lots of people like me got an S because there was no model 3 in my country, and to-date still no performance model Y where I live. meanwhile, as people like me trade down to the smaller car, there are S/Xs available secondhand in reasonable numbers now.
I think the S/X *could* sell more in future, but they definitely suffer from internal competition from 3/Y. When I get my new model Y it will outperform the model S I sell in every metric.

" .. it will outperform the model S I sell in every metric..." except comfort - the Y is more like the Mercedes of old, with a firm /stiff suspension. BUT there's a fix for that via Tesla Model Y Luxury Coilover Suspension Kit by Unplugged Performance

PS. Someone please get Tesla to install these at their centers as an option so it doesn't void the Tesla warranty. Unplugged Performance already has good connections w/ Tesla techs. Just make it better integrated, good for profits if done right