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

[GOVA]

Was just looking at iphone sales. We're so clearly on a similar trajectory, perhaps on about double or triple the time scale.

It's 2010/11 in the iPhone timeline, the idea of owning an EV has just gone somewhat mainstream, but volumes are still limited. People question if there's room for growth and if more than 20% of consumers even want a smartphone.

Tesla will keep it's insane lead another 4 or 5 years, then begin to level off as the android options fill the market gaps. We shall see if that turns into robotaxi time or not.

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I don't really care if robotaxi becomes reality. My hope is simply for greater transport efficiency that's also 100% EV so we can turn our focus to the grid.

Long before the S-curve completes for EVs.....we then begin another far larger ascent up the Energy S-curve. That's what I'm interested in.

Lord only knows what it'll even look like. Reshaping the energy system of the entire planet isn't exactly a consumer product. Hopefully we get a really good idea of how much storage is needed globally and there's a quantifiable goldrush to meet that threshold.

Most of this could and IMO likely will happen over the next 15 years. Bananas.

I do have love-hate relationship with Tesla - Apple ananogies. Yes, I like the trend it shows in terms of growth numbers. Yet, what I don't like is that building EV cars and making money on it is vastly different from making a phone unit. I get the Android analogy too, but again, this might not be similar at all to all of the non-Tesla EV makers out there. I don't know, time will tell but I think the similarities will end as Tesla becomes a true monster.

 

[GOVA]

Bullish:

Elon looks and feels great, apparently. Good for him and us.

Elon's Trip.

 

[The Accountant]

A question about these numbers. Are they the mean, median or the mode of the estimated distribution?

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For example if you estimate that Tesla will make $1 eps but there is a 10% chance they will recognize $2 eps in deferred revenue, is that a mean of $1.2 or a mode of $1?

When completing short term forecasts, most forecasters will not probablize events. The approach is binary . . either the event is in (100%) or out (0%).
My Q2 forecast would be the mode. Although I think there is a 5% chance of recognizing the Deferred Tax Benefit this quarter, I have taken nothing for it.
I think there is a 20% chance Tesla takes FSD revenue this quarter but I have taken nothing. If I believe something is 50% or higher, then I take 100% of the event. In reviewing the other forecasters' models, I believe they do the same (using the mode).

It is common for forecasters to take the Mean when developing long term financials (5 to 10 years out). Financial planners will often probablize events (e.g. 20% chance of Tesla Model 2 launching in 2025). With these long term forecasts containing probablized events, the end result is the Mean.

I hope this answered your question.

 

[dhanson865]

In the age of Covid, Energy shortages & trade wars there is no way to know which of your “available parts“ becomes a “part limited” item, so best to have safety stock of every part.

Yes, we don't want just in time to become just in this year or just in this quarter.

I feel sorry for the plants so heavily into just in time that they don't have anywhere to store the excess. Not every part is cast material that can sit outdoors exposed to weather. Most parts would need to be stored indoors.

oh wait, that's why they build the cars missing several parts by the thousands and put them in lots. They don't have anywhere to store that stuff indoors so Ford, GM, Etc just par build and deal with it later when they get more parts.

 

[traxila]

Crypto has has been a decent leading indicator for market action upcoming for the past year or so.

It has been acting well this weekend.

Just an FYI.

 

[Usain]

I don't understand why this is a concern (that's what I'm getting from the OP). I appreciate the bottoms-up calculations in the replies, but top-down, Tesla just had to calculate the conservative standard cycle time times the operating hours times the number of Gigapresses to estimate their annual capacity. Gigapresses are a known commodity to Tesla. Do we really think they didn't do the simple math to buy enough capacity for their production targets?

If I've misunderstood, and this thread is just to show how ahead of the game Tesla is, well,

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No, I'm not concerned at all. I trust that Tesla did the math and made the right decisions. I was just trying to get my head around what went into that math. The replies helped a lot. Thanks folks!

 

[Usain]

I feel TE's estimate is way too high. James Stephenson's $1.73 is much more realistic in my opinion for Q2.

TE seems to think his own number is too bullish. He just can't figure out why.

 

[kcveins]

That's weird. I have never seen this happen.

Consensus off the Bloomberg terminal was $1.98 two weeks ago and then last week it dropped to $1.80 and now this week it's up to $1.85.
I sourced these numbers from Gary Black's Twitter posts. Consensus numbers exclude Bitcoin Impairment and Severance charges according to Gary.

according to Schwab this evening..

Upcoming Earnings​

Next Earnings Announcement	07/20/2022
Time of Release	After Market Close
Consensus Estimate (Q2 2022)	$1.86

 

[Drumheller]

Would someone that has severance included in their Q2 model please break down how they came to that number.

For all of my career, most people getting laid off would receive for severance 2 weeks of pay. One company offered a week of pay per year of tenure. If 1000 salaried workers were laid off, most received 2 weeks pay, and assuming the avg salary is a bit over 100k, then that's 4k of severance per employee or $4M total. Say salaries are higher or Tesla gave more, that could get the number to $10M. How are some models going over $100M for severance?

Thanks!

 

[mongo]

HIPAA is strictly about what you doctor/hospital can release without your permission. You are free to say whatever the heck you want about yourself.

We could totally discuss code of conduct on a public forum, decency, moderation policy etc - none of that would have ANYTHING to do with HIPAA, which was the only matter I addressed.

I feel the point of the post was missed:

My understanding of HIPAA is that personal health information can't be disclosed without the patients permission.

Is there some corollary wherein you can't post your health info to be read online without my permission? If not, Mods Gods make it so! Or else move it to the off topic gory section of the forum?

The question: do persons A-Y need to give approval before person Z post's person Z's surgery shot on the forum that A-Z all use? i.e. eye bleach waiver.

Not the question: Does HIPAA prevent people from posting their own medical details?

And @AudubonB has given the answer.

 

[mongo]

Would someone that has severance included in their Q2 model please break down how they came to that number.

For all of my career, most people getting laid off would receive for severance 2 weeks of pay. One company offered a week of pay per year of tenure. If 1000 salaried workers were laid off, most received 2 weeks pay, and assuming the avg salary is a bit over 100k, then that's 4k of severance per employee or $4M total. Say salaries or higher or Tesla gave more, that could get the number to $10M. How are some models going over $100M for severance?

Thanks!

WARN act calls for 60 days WARN Act Compliance Assistance | U.S. Department of Labor
in cases where this applies, basically one extra month of pay would be added to Q2 since the layoffs occured one month before the end of Q2.

 

[ZenRockGarden]

I think they are pursing compact models, but Tesla will keep their mouth shut as long as it necessary, they knows cannibalization very well.

There's just zero reason to move forward on compact/entry-level models when they are unable to meet the demand of their existing higher margin cars. Every single model-2 would take factory time and battery supply away from a higher margin Model 3/Y/S/X

Eventually, when the factories can make all existing models for anyone who wants them in a matter of weeks - that is the time to expand downwards.

 

[The Accountant]

Would someone that has severance included in their Q2 model please break down how they came to that number.

For all of my career, most people getting laid off would receive for severance 2 weeks of pay. One company offered a week of pay per year of tenure. If 1000 salaried workers were laid off, most received 2 weeks pay, and assuming the avg salary is a bit over 100k, then that's 4k of severance per employee or $4M total. Say salaries are higher or Tesla gave more, that could get the number to $10M. How are some models going over $100M for severance?

Thanks!

My calculation is as follows:

In the US, severance is typically 1 week of pay for every year of tenure with a minimum of 2 weeks.
I conservatively used 4 weeks because companies will often provide other benefits such as outplacement services, etc.
Also, in some countries outside of the US, local laws require much more than the 2 weeks.

 

[Bet TSLA]

There's just zero reason to move forward on compact/entry-level models when they are unable to meet the demand of their existing higher margin cars. Every single model-2 would take factory time and battery supply away from a higher margin Model 3/Y/S/X

Eventually, when the factories can make all existing models for anyone who wants them in a matter of weeks - that is the time to expand downwards.

How about that "margin" and "profit" are not Tesla's stated mission. If they are trying to accelerate the transition to sustainable energy/transport then they trying to remove the maximum number of unsustainable vehicles from use. So they should be making vehicles that use the minimum amount of whatever the limiting item is. They've said that's chips now and batteries soon.

Sounds like making smaller, simpler cars is what the mission demands, now that they're profitable and have ensured their future. Of course nobody here knows the relative importance of the mission vs. profits. Me, I'm continuing my naive belief that the mission is what's driving Tesla.

 

[TheTalkingMule]

How about that "margin" and "profit" are not Tesla's stated mission. If they are trying to accelerate the transition to sustainable energy/transport then they trying to remove the maximum number of unsustainable vehicles from use. So they should be making vehicles that use the minimum amount of whatever the limiting item is. They've said that's chips now and batteries soon.

Sounds like making smaller, simpler cars is what the mission demands, now that they're profitable and have ensured their future. Of course nobody here knows the relative importance of the mission vs. profits. Me, I'm continuing my naive belief that the mission is what's driving Tesla.

Remembering of course that new models require design and all new lines and probably a million other things. While chips and cells are so deeply constrained, and the world so disrupted, best to just go hyperspeed with what's already working.

We clearly need to give Tesla another year to see if FSD can be resolved while the world gets back into rhythm. The direction of cheaper models or robotaxi can be made between mid-2023 to mid-2025.

And......the entire world is also now screaming for Megapacks.

 

[EVWatcher]

Would someone that has severance included in their Q2 model please break down how they came to that number.

For all of my career, most people getting laid off would receive for severance 2 weeks of pay. One company offered a week of pay per year of tenure. If 1000 salaried workers were laid off, most received 2 weeks pay, and assuming the avg salary is a bit over 100k, then that's 4k of severance per employee or $4M total. Say salaries are higher or Tesla gave more, that could get the number to $10M. How are some models going over $100M for severance?

Thanks!

My only severance experience in the bay was 8 weeks severance.

 

[MC3OZ]

How about that "margin" and "profit" are not Tesla's stated mission. If they are trying to accelerate the transition to sustainable energy/transport then they trying to remove the maximum number of unsustainable vehicles from use. So they should be making vehicles that use the minimum amount of whatever the limiting item is. They've said that's chips now and batteries soon.

Sounds like making smaller, simpler cars is what the mission demands, now that they're profitable and have ensured their future. Of course nobody here knows the relative importance of the mission vs. profits. Me, I'm continuing my naive belief that the mission is what's driving Tesla.

It is too early to make compact cars, but Tesla needs to think ahead.

If they intend to make a compact car in 3-4 years time, they probably need to do some design and planning work now.

Mission wise, if FSD worked, then Model 3/Y with FSD can help a lot.

Specifically on Model 3, could they redesign it with front and rear castings, then have structural battery packs of different sizes to vary the length of the car? i.e. support 2-3 different models with the same set of castings.

I suspect just doing castings for Model 3 in isolation is hard to justify, but they want to move most models to structural battery packs ASAP.

The best news from Sandy's visit to IDRA is IDRA have the floor space to 3X Giga-casting machine production. I suspect there are other ramp issues, but I also suspect orders from Tesla will not be an issue.

 

[Gigapress]

How about that "margin" and "profit" are not Tesla's stated mission. If they are trying to accelerate the transition to sustainable energy/transport then they trying to remove the maximum number of unsustainable vehicles from use. So they should be making vehicles that use the minimum amount of whatever the limiting item is. They've said that's chips now and batteries soon.

Sounds like making smaller, simpler cars is what the mission demands, now that they're profitable and have ensured their future. Of course nobody here knows the relative importance of the mission vs. profits. Me, I'm continuing my naive belief that the mission is what's driving Tesla.

Profits are mission-critical. The bigger the better.

• Cash for insurance against catastrophic economic crashes like the Great Depression
• More attention to Tesla and what they’re trying to accomplish
• Free advertising for the products too
• Credibility with suppliers that Tesla can succeed and grow as quickly as they claim while actually being financially able to follow through with their promises of stable long-term contracts for raw materials
• More capital for investments, especially robotaxi fleets and virtual power plants, both of which could consume tens of billions in upfront costs before flipping to positive cashflow
• Rewards for employees with rising share price over time
• Demonstrating to the whole world that transitioning to sustainable energy will actually increase economic prosperity

Tesla management keeps saying they’re doubling down on robotaxis. Compact car is not in work, at least as of January on the Q4 call. Nothing can displace ICE usage faster than an EV robotaxi, especially if it’s whizzing around unimpeded at high speeds in a Loop tunnel.

Q: How is the progress of the $25,000 compact car? Can you give an update?

Elon Musk
Well, we're not currently working on the -- on a $25,000 car. We -- you know, at some point, we will, but we have enough on our plate right now, too much on our plate, frankly. So, you know, at some point, there will be. I think that's sort of a question that -- it's sort of the wrong question, really. It's -- really the thing that overwhelmingly matters is when is the car autonomous? I think, at the point in which it is autonomous, the cost of transport drops by, I don't know, a factor of four or five.

 

[Bet TSLA]

Profits are mission-critical. The bigger the better.

None of your following statements shows this. Increasing production is what matters. Smaller, simpler cars are the fastest and most lasting way to increase production. Increased production puts more vehicles on the road sooner. Demand is irrelevant for the foreseeable future. Profits will come because they're making great vehicles that further the mission. It's what we're seeing now, and it keeps getting better.

 

[JusRelax]

Some more info on V4 superchargers. Is it possible to determine what the max charge rate of V4 superchargers would be from this document?

V4 - Google Drive

drive.google.com

Taken from:

https://twitter.com/x/status/1548882714866106369