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

[BrownOuttaSpec]

Can you repost this sorted by TipRanks? That will shed some light

This is a very handy link for Tesla price targets, for those who are on TipRanks it has their score listed:
Tesla Price Targets

Tesla Price Targets

Calculate the potential investment value of your Tesla shares, with price targets from the largest collection of TSLA analysts, institutional and retail! | When can you retire on Tesla stock?

teslapricetargets.com

 

[X Fan]

Psst...

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

Robovan. MX Gullwing doors are impressive, but expensive and complex by Tesla's own admission...the real question is can Tesla put sliding doors on their van and still make it cool?

teslamotorsclub.com

I don’t believe that link included
unfunded pension obligations.

 

[ZachF]

Any news out of China causing other China EVs to be down?

General macro in China is bad… bursting property bubble, bank runs

 

[UkNorthampton]

With finite Gigapress supply from IDRA it’s best to use them for the highest-value purpose which is Model Y mass production.

According to Sandy Munro's video when visiting IDRA - IDRA have plenty of capacity and want more orders

 

[Knightshade]

This is a very handy link for Tesla price targets, for those who are on TipRanks it has their score listed:
Tesla Price Targets

Tesla Price Targets

Calculate the potential investment value of your Tesla shares, with price targets from the largest collection of TSLA analysts, institutional and retail! | When can you retire on Tesla stock?

teslapricetargets.com

Huh- Needham/Rajvindra Gill entry is a pretty weird outlier... only highly ranked (by tipranks) person on there with a target under $1000... and WAY below not just $1000, but even the current price.

 

[Nolimits]

Gary has added point # 5 to his Tesla catalysts: Buyback in October.

I find Gary to be very conservative; so this prediction of a buyback in October is a bit out of character.
My thinking is that Tesla would not entertain a buyback for a few years. Perhaps in early 2025 when cash on hand exceeds $80b.

View attachment 831544

They have so much work ahead to reach 10M cars a year, buyback would not be in line w their mission. Besides cybertruck ramp, lithium mining/refining, robotaxi/Optimus ramp all will be capital intensive. Love Gary but I agree that it’s not going to happen.

 

[mongo]

According to Sandy Munro's video when visiting IDRA - IDRA have plenty of capacity

Yah, IDRA has space for assembly, but what is the capacity of their suppliers?
That's some large pieces to cast and machine.

 

[StealthP3D]

I wouldn't be surprised to see them announce multiple new factory locations at the shareholder meeting. I'm hoping for 3

The fewer, the better. Announcing 3 new factories would signal they are not making any headway on manufacturing efficiency and economies of scale. I'm hoping that Tesla can blow us away with how productive they can make Shanghai, Berlin and Austin.

I think it was at Battery Day that Elon spoke at some length about maximizing the efficiency of factories in two ways:

production line speed and
utilizing the factory space more efficiently. He even went as far to include the third dimension of vertical space.

Previous guidance on the announcement of new factory locations was by the end of this year (maybe) and there were only 2 anticipated at that time. It won't bum me out at all if there is only one due to learning how to do more with less. One issue legacy auto has is their manufacturing is really spread out, especially when you consider their suppliers facilities (and there are a lot more of those vs. Tesla suppliers). Legacy auto often has separate engine plants, transmission plants, etc. When you buy a legacy auto, you have to pay for all that inefficiency.

Even the general assembly plants of legacy auto are terribly inefficient. Tesla's out-dated Fremont Plant puts out more cars per quarter vs. any legacy plant in the US. even though it's only a little over 5 million square feet. And that's tiny compared to Tesla's new Gigafactories and many larger legacy plants that put out fewer cars. The output of Tesla's new Gigafactories is going to massively dwarf the output of any legacy auto factories and this is one primary reason why legacy cannot and will not be price competitive with Tesla. Tesla will enjoy strong margins while legacy auto will not.

 

[jhm]

Ask Elon, he's the one who said on an earnings call a couple years ago:

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

Do we really believe that when Tesla is straining to crank out 10M units per year that it will keep making 100k bespoke Model S/X for sentimental reasons? It seems to me that Model S/X needs to provide 5% to10% of total units sold just to be relevant. So the relevance is growing thin.

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2? When the Model S came out, it superseded the Roadster as the halo car. Musk was never so sentimental as to continue the original Roadster as Model S became available. So why should the Model S/X still be produced when Roadster 2 becomes available?

What I'm pressing for with all these questions is a real business case for the Model S/X? Legacy, heritage, sentiment, halo, these notions do not amount to a business case for a growing automaker of the caliber of Tesla. Product lines that do not scale over time, how does that fit with the ethos of a company that seeks 50% or higher annual growth? My sense of Elon Musk is that he cares much more about scalability and innovation than sentiment and the brand power of a halo car. These things may matter to a legacy automaker, but Tesla is not an ordinary OEM.

 

[LYTRIDR]

Even the general assembly plants of legacy auto are terribly inefficient. Tesla's out-dated Fremont Plant puts out more cars per quarter vs. any legacy plant in the US. even though it's only a little over 5 million square feet. And that's tiny compared to Tesla's new Gigafactories and many larger legacy plants that put out fewer cars. The output of Tesla's new Gigafactories is going to massively dwarf the output of any legacy auto factories

I share your optimism, but I do wonder about using volumetric to unit output comparisons is straightforward. One of the hallmarks of the Tesla approach is vertical integration. We know they are putting cell lines in the factory and even though they are highly space efficient, how many more processes have they brought in-house that other automakers outsource. I think a more apt comparison would be the entire floorplan of GA plus all the subcontractors combined, but that is cumbersome and likely impossible to calculate.

Even if Tesla is able to match output/square meter, it would be a huge feat. Still, I share your perspective that Tesla will outperform on that metric and the advantage will be underrated.

 

[M|S|M MYP]

Great week y'all....let's hope it keeps going next week! Have a great weekend and live life to the fullest!

 

[jabloomf1230]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

Do we really believe that when Tesla is straining to crank out 10M units per year that it will keep making 100k bespoke Model S/X for sentimental reasons? It seems to me that Model S/X needs to provide 5% to10% of total units sold just to be relevant. So the relevance is growing thin.

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2? When the Model S came out, it superseded the Roadster as the halo car. Musk was never so sentimental as to continue the original Roadster as Model S became available. So why should the Model S/X still be produced when Roadster 2 becomes available?

What I'm pressing for with all these questions is a real business case for the Model S/X? Legacy, heritage, sentiment, halo, these notions do not amount to a business case for a growing automaker of the caliber of Tesla. Product lines that do not scale over time, how does that fit with the ethos of a company that seeks 50% or higher annual growth? My sense of Elon Musk is that he cares much more about scalability and innovation than sentiment and the brand power of a halo car. These things may matter to a legacy automaker, but Tesla is not an ordinary OEM.

Unless Tesla looks at those models as their flagship product line. Most hardware manufacturers have a flagship product, whether it's either an OLED TV or a video card. I doubt that the Nvidia GTX 4090ti will account for even 1% of the video cards that will be sold in 2023 using an Nvidia design. It's about bragging rights for selling the fastest card(d).

 

[Knightshade]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

Ok.

But wouldn't all that new production make far more sense to install in NEW buildings in Texas, or Berlin, or China, or new locations-- where they're not already running lines and massively constrained on both space and labor costs?

Do we really believe that when Tesla is straining to crank out 10M units per year that it will keep making 100k bespoke Model S/X for sentimental reasons? It seems to me that Model S/X needs to provide 5% to10% of total units sold just to be relevant. So the relevance is growing thin.

Elon already said that back in late 2019 as I cited.

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2?

It's entirely possible they might. But Roadster 2 keeps getting delayed exactly because it's another inefficient use of resources on a low-volume car and on top of that unlike the S/X isn't already in production.

When the Model S came out, it superseded the Roadster as the halo car. Musk was never so sentimental as to continue the original Roadster as Model S became available. So why should the Model S/X still be produced when Roadster 2 becomes available?

IIRC the roadster couldn't be continued- remember they had a lot more external dependency then.

From the preliminary IPO prospectus

.we do not plan to sell our current generation Tesla Roadster after 2011 due to planned tooling changes at a supplier for the Tesla Roadster

What I'm pressing for with all these questions is a real business case for the Model S/X? Legacy, heritage, sentiment, halo, these notions do not amount to a business case for a growing automaker of the caliber of Tesla

Again, Elon LITERALLY SAID this. There isn't a great business case, beyond perhaps the fact they have a ready supply of 18650s and nothing better to use them for... and it can serve as a test bed in limited #s for certain new ideas (the Lithium Ion 12v for example, or the Ryzen MCU). It's done for sentiment, and you shouldn't expect them to be a significant part of the future of the company.

My sense of Elon Musk is that he cares much more about scalability and innovation than sentiment and the brand power of a halo car. These things may matter to a legacy automaker, but Tesla is not an ordinary OEM.

Then how do you explain his remarks that S/X production is largely due to exactly the things you insist he doesn't care about?

 

[MP3Mike]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

You are still missing that they can't put their current production setup in the space that the S&X line use. And Elon said that there is no point knocking down the current building, taking production capacity offline for years, to rebuild it the new way. (Not to mention how horrible the permitting process is in California.) So it makes sense to continue to use that space to produce cars that people want.

If demand falls too far below production, I expect that they would just discontinue the S&X and use that space for something else. (But not a new car production line.) Maybe they would use it for R&D?

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2?

Actually the S&X are the newest designs that are in production. (Since the refresh was an almost complete redesign.)

As for why not the Roadster 2, there wouldn't be enough demand for it. It will be a very low volume vehicle. And as Elon said, you don't spend your limited resources on dessert until you have finished the main course.

 

[mongo]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

Do we really believe that when Tesla is straining to crank out 10M units per year that it will keep making 100k bespoke Model S/X for sentimental reasons? It seems to me that Model S/X needs to provide 5% to10% of total units sold just to be relevant. So the relevance is growing thin.

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2? When the Model S came out, it superseded the Roadster as the halo car. Musk was never so sentimental as to continue the original Roadster as Model S became available. So why should the Model S/X still be produced when Roadster 2 becomes available?

What I'm pressing for with all these questions is a real business case for the Model S/X? Legacy, heritage, sentiment, halo, these notions do not amount to a business case for a growing automaker of the caliber of Tesla. Product lines that do not scale over time, how does that fit with the ethos of a company that seeks 50% or higher annual growth? My sense of Elon Musk is that he cares much more about scalability and innovation than sentiment and the brand power of a halo car. These things may matter to a legacy automaker, but Tesla is not an ordinary OEM.

Vehicles at 30% margin or greater are vehicles at 30% margin or greater. Plus, S/X are 2-3X the price of 3/Y, so they are effectively 2-3x the volume (profit) per unit.

It's questionable whether Fremont could support a high volume vehicle line in place of the S/X. It's not just the floor space, it's parts flow, paint, stamping, etc. There may also be long term 18650 purchase agreements (along with other suppliers).

 

[Mengy]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

I don't think that is likely. The S & X are popular cars, they are in demand, and they have high margins. Tesla is probably pretty happy making both cars at about the rate they are right now, with maybe a bit more ramping up but nothing extravagant.

They have larger things to worry about right now than retrofitting and retiring the S & X to make room for other things. If they need room they'll simply add on to an existing factory or build a new one, no big deal.

 

[BigDawgz]

Gary has added point # 5 to his Tesla catalysts: Buyback in October.

I find Gary to be very conservative; so this prediction of a buyback in October is a bit out of character.
My thinking is that Tesla would not entertain a buyback for a few years. Perhaps in early 2025 when cash on hand exceeds $80b.

View attachment 831544

Yeah especially since their reasoning for selling BTC was to have more cash on hand to be safe for the China shutdown, I would doubt they would be giving up cash so soon after.

 

[jerry33]

Sure that was in 2019 IIRC. But now we see that 3X as many vehicles could be build with the equipment and floor space that the S/X lines occupy. At some point, sentimentality may no longer cut it. All of the sudden we could get an announcement from Musk that Tesla will abandon S/X to make room for something new and substantially more capital efficient.

Do we really believe that when Tesla is straining to crank out 10M units per year that it will keep making 100k bespoke Model S/X for sentimental reasons? It seems to me that Model S/X needs to provide 5% to10% of total units sold just to be relevant. So the relevance is growing thin.

Moreover, these are the oldest models in production. If one assumes that Tesla needs a halo car for advertisement purposes, then why not replace Model S/X with Roadster 2? When the Model S came out, it superseded the Roadster as the halo car. Musk was never so sentimental as to continue the original Roadster as Model S became available. So why should the Model S/X still be produced when Roadster 2 becomes available?

What I'm pressing for with all these questions is a real business case for the Model S/X? Legacy, heritage, sentiment, halo, these notions do not amount to a business case for a growing automaker of the caliber of Tesla. Product lines that do not scale over time, how does that fit with the ethos of a company that seeks 50% or higher annual growth? My sense of Elon Musk is that he cares much more about scalability and innovation than sentiment and the brand power of a halo car. These things may matter to a legacy automaker, but Tesla is not an ordinary OEM.

The business case is that some want a larger car than a 3 or Y and will pay extra for it. If Tesla doesn’t supply, then they will go elsewhere.

 

[Bet TSLA]

Here is the tweet thread from earlier today with his reasoning:

https://twitter.com/x/status/1550413213023539200

Gary Black is a Wall St. guy. He thinks about Tesla and understands Tesla like a Wall St. guy. Which means he understands Tesla not at all. Not even a little bit. Nobody at Tesla thinks about the company from a Wall St. perspective, because if they did they'd be gone in a heartbeat. Wall St. doesn't care in the slightest if the planet burns up, so long as they can make money on it.

This is why I pay no attention to Gary Black. I think there's a small chance that Tesla would be more understandable to Gary Black if, for instance, Zach were CEO rather than Musk. But that's just another obvious reason why Zach will never be CEO of Tesla.

 

[damonbrodie]

DEMAND UPDATE: Model 3 Standard Range, cheapest option, white color, 18" wheels, black seats: Pushed another month - delivery is now April - June 2023 for Germany and Denmark (possibly in all of EU - didn't check...)

What was it before?