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

[StarFoxisDown!]

You're right on there being a disconnect and it not being a direct relationship. With Tesla still heavily skewed to being an auto maker, it is still pretty close to direct.

Here's my counter point on the cheaper price point... as of now and any vehicle we know of, there is little reason to think the average sale price will drop in the near term (meaning 2-3 years). We've seen the price increases on the current model range that still has a significant backlog. The roadster and semi are much higher priced, but unlikely to materially impact ASP with their low volumes. The next volume vehicle is the Cybertruck, and we don't fully know the pricing yet. We do know the single motor and tri motor were 'canceled.' Leaving only dual and quad motor versions. Reasonable to expect the dual motor to at least start at 50k that it was originally announced and 55k is probably more realistic. The quad motor is likely 75-80k. This is before EAP or FSD. The ASP should actually increase for the next ~2-3 years. If there is a new model that is cheaper, we are likely ~4 years from volume production.

Now we may see the backlog dry up and prices have to be cut to keep up demand. That could hurt ASP and is a risk, but I don't think we'd see more than a 5% cut and certainly not more than 10%. This would also likely come at the time we have a quad motor Cybertruck pumping up ASPs too.

Don't forget Semi going into volume production which, while much lower production, it has a disproportional effect on ASP due it's much higher ASP.

 

[insaneoctane]

Looking at demand, and the products coming on line in the next couple of years, it seems unlikely ASPs will come down.

It's looking less and less likely Tesla will ever release a $25k car at all. Looks a lot more like FSD/ Robotaxi comes online first which will better address the need for low income buyers. Before Tesla looks at launching a $25k vehicle, demand for their current lineup plus the Cybertruck needs to start slacking off.

The $25K car evaporated into the ether once inflation reared it's ugliness. Apply the actual 12%+ inflation numbers for new vehicles to that number. So, $25K in 2021, becomes $28K in 2022. If it's announced in 2023, it's now $31.4K, but the backlog means you can't take delivery sooner than 2024, so now it's $35.1K. This is just an example of assumptions....in any case, IMO, the $25K is dead for the foreseeable future.

 

[henchman24]

Don't forget Semi going into volume production which, while much lower production, it has a disproportional effect on ASP due it's much higher ASP.

I have it in the 2nd paragraph.

The low volumes will get drown out by the other models. They could produces 1000 a quarter and it wouldn't change it much.

 

[StarFoxisDown!]

I have it in the 2nd paragraph.

The low volumes will get drown out by the other models. They could produces 1000 a quarter and it wouldn't change it much.

Missed that part

 

[insaneoctane]

Don't forget Semi going into volume production which, while much lower production, it has a disproportional effect on ASP due it's much higher ASP.

I think semi's margins will be MUCH lower than the other Tesla vehicles.

 

[PKEllefsen]

To summarize quickly, while I do think ASP will decline in 2024/2025 (though not quite to the extent that you have), I believe gross profit margin will be at a all-time high due to cheaper cost of goods (Tesla riding the 4680 Cell cost of good decline curve) and amortization/depreciation being spread across much higher production out of each factory.

Further your operating expenses are too high. Tesla already guided to operating expenses remaining relatively flat from last year and Tesla has shown that due to operating leverage, they are very very good at increasing production without increasing the same % of operating costs. They already have all the factories in place and ready to go to reach 3 million production. To go from 3 million to 5.4 million will only require 2 additional factories. But that will only increase operating expenses for Tesla in total about 25-30% from 2023 to 2025. You have operating expenses increasing 40% this year, 40% in 2023, and then 30% in 2024 and 2025. I think those numbers are grossly inaccurate.

My bad, forgot OpEx that margin doesn't affect revenue.

I guess if the compact vehicle doesn't come out and the 5,45 million numbers i have for deliveres are all 3's and Y's (and a bit semis, cybers and roadsters), and if they won't have to decrease ASP at all from the 2023 highs (remaining at ASP of 60K) then i guess 50% compound growth in revenue should be possible for 2024 and 2025 as well...

 

[henchman24]

The $25K car evaporated into the ether once inflation reared it's ugliness. Apply the actual 12%+ inflation numbers for new vehicles to that number. So, $25K in 2021, becomes $28K in 2022. If it's announced in 2023, it's now $31.4K, but the backlog means you can't take delivery sooner than 2024, so now it's $35.1K. This is just an example of assumptions....in any case, IMO, the $25K is dead for the foreseeable future.

I personally don't think the cheap car (at whatever price it comes out at) will be anything other than a fleet vehicle. There might be some instances of purchases... but it really sounds like they are going all in on the robotaxi model for it. Which means they'll likely sell to Uber/Hertz and/or keep for themselves for usage as a service. I don't think this will be a Civic competitor, it'll be something else... and likely hated by wall street at the start.

 

[Electroman]

I agree. I’ve put about 10,000 miles on my car since I got FSD last November and most of it has been with FSD enabled. I’ve covered 7 western states while avoiding interstates where possible, and lots of small towns. FSD has definitely gotten progressively better, with better speed control for curvature and visibility, smoother transitions between maneuvers, and better recognition of road geometry.

Here’s me going up and down Pikes Peak a couple of weeks ago (no safety-related interventions):

I noticed on the way up, your car actually caught up to a slow moving minivan ahead (which was crossing the middle line on most turns). In fact at 20:45, another SUV ahead of you pulled out to give you way.

I was thinking FSD would be way slow and hesitant causing a huge backup.

Q: what is the disengagement at 26:50?

 

[henchman24]

I think semi's margins will be MUCH lower than the other Tesla vehicles.

Until the 4680 ramp happens, I don't think Semi will have much margin at all. Longer term, I expect the margin to approach the normal for Tesla.

 

[FlatSix911]

Some rough guesstimates for future production rates:
View attachment 822664

After this (2024) I expect new factories to be coming online… east coast, 2nd European, Indonesia, and maybe Brazil.

From the 1Q22 Shareholder deck.

 

[PKEllefsen]

Which of these are correct?

1,083B or 1,033B outstanding shares 12/31/21?

And for 03/31/22 macrotrends shows 1,157B for and ycharts shows 1,036B

 

[Ogre]

Well, i would be very worried right now if they had any sort of problem selling a bit more than 1 million model y's and 3's a year when they should be selling around 4 million in 2025. The biggest marked in the world is by far the sub 30K cars, so in my mind there is no doubt they will go into this marked at some point. Right now ASP's are also extremely high because there are almost no other car manufacturers managing to have any ev production at all.

If we get Robotaxi or any other autonomous platform, there will never be a $25k Tesla sold to the public. The future of cheap cars is not owning a car, not paying for insurance, not paying for parking, etc.

It is likely autonomous driving will be solved in the next 5 years, either by Tesla or someone else.

Strong chance there will never be a sub $35k Tesla sold to the public.

 

[SN_8]

Arbitrage opportunity... I'm going to buy a 4680 model Y and then sell the batteries for a total of $720k. (Edit because assumed wrong number of cells. Still a great deal )

 

[PKEllefsen]

If we get Robotaxi or any other autonomous platform, there will never be a $25k Tesla sold to the public. The future of cheap cars is not owning a car, not paying for insurance, not paying for parking, etc.

It is likely autonomous driving will be solved in the next 5 years, either by Tesla or someone else.

Strong chance there will never be a sub $35k Tesla sold to the public.

Maybe so. For my part i would assume at least 30-50% will still own their own cars. Most people who have 2 will go down to 1, and maybe 50% of the ones who own 1 will still keep their car. At least for the first 5-10 years before network has properly scaled up.

 

[henchman24]

Which of these are correct?

1,083B or 1,033B outstanding shares 12/31/21?

And for 03/31/22 macrotrends shows 1,157B for and ycharts shows 1,036B

View attachment 822691
View attachment 822692

1.036 is from the most recent 10Q. I believe MacroTrends includes convertible securities. So both are correct.

 

[Drumheller]

Arbitrage opportunity... I'm going to buy a 4680 model Y and then sell the batteries for a total of $720k. (Edit because assumed wrong number of cells. Still a great deal )
View attachment 822694

I paid $5 (shipped) for a 18650 cell. I paid $20 (shipped) for a 2170 cell. I intend to buy a 4680 cell when I can but $800 is too much.

 

[henchman24]

Arbitrage opportunity... I'm going to buy a 4680 model Y and then sell the batteries for a total of $720k. (Edit because assumed wrong number of cells. Still a great deal )
View attachment 822694

I gotta hand it to Munro... they are taking full advantage of the fanboys.

 

[Cosmacelf]

Here's my counter point on the cheaper price point... as of now and any vehicle we know of, there is little reason to think the average sale price will drop in the near term (meaning 2-3 years).

Yes, ignoring all Tesla related factors, there is going to be an inflation effect for all profitable stocks. So, assuming constant PE, assuming the economy stays constant (no recession), earnings are going to increase over the long term to match inflation. The company will still be making the same amount of money in inflation adjusted dollars, but in non-inflation adjusted dollars, the earnings will increase, meaning the stock price will increase.

That's why in an inflationary environment, you don't want to hold cash, but instead you want to hold hard assets, like real estate and equities. Inflation will cause those hard assets to rise in value over time. Obviously each submarket is going to have their own issues, and prolonged recessions will void this offer. But over a reasonable time horizon (2-5 years), stock prices will rise in aggregate just due to inflation. And mild recession staring at us in the face or no, I don't see inflation itself abating anytime soon for various other structural factors (that's a longer post if anyone is interested).

 

[elasalle]

https://twitter.com/x/status/1542209230215815170

 

[damonbrodie]

No, because of two things: 1. They deliver other products which affects the delivery/revenue relationship. 2. In the future they will most likely sell cheaper vehicles, so despite them increasing deliveries by 50%, revenue could still only grow by 30%. This would of course be the opposite if they started selling a lot more expensive vehicles.

example: If someone is selling 100K cars at 50K each that would amount to 5 Billion in revenue. Now they increase production by 50K cars which costs 25K each, so their new revenue becomes 6,25 Billion. Now their deliveres have increased by 50%, but revenue only by 25%.
edit: too much pressure

Oh sure - but for the next 12 months the cars and ratios are not going to change. I don't think Energy/Solar is going to have a material impact in the next 12 months either.