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

[2daMoon]

Something to keep in mind regarding the PHEVs being included in the latest version of the bill.

1) PHEVs are only in the bill to secure a deciding vote from a coal/ICE congress-critter.​

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B) Gas prices being high really won't set well with anyone buying a new PHEV. Especially if they meet a Tesla owner and the conversation goes toward how much does it cost to fill up?​

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III) Any OEM that bankrolls PHEVs will only hasten their eventual demise.​

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Fore) In a few years this will be old news, and the truth about PHEVs added costs of operation and environmental short-comings will be common knowledge.​

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Cinco) The incentives for purchasing BEVs, Solar, and Storage will still be alive and well long years beyond the event horizon when PHEVs have completely lost their luster, and, Tesla's cars have become more affordable as production capacity grows, demand is met, and economy of scale sinks those who believed what the oil shills told them.​

The stupidity of PHEVs being blessed with the subsidy will be inconsequential in a remarkably short period of time as the ICE age concludes.

HODL

 

[Snerruc]

I obviously touched a sensitive nerve. Making financial decisions only based on breakeven analysis.
That is the reason I am where I am today. If the results were close, let just say within 10%, I would say go with your gut.
I did have a sub 4.0 0-60 TT from the Japanese supercar era, it was fun but I was lucky to be alive today, seriously.
I will not post anymore on this topic. But for folks that thinks I am talking puffy or non logic.
Here are links from the EPA's car fuel cost calculators.
I used my analysis numbers, whops, got a break even of 170 years instead of my 107.
They're also biased I assume.
Bye

The worst car decisions I’ve made came from buying on practical reasons. Why? Because I didn’t really like them and sold early The car I kept for 20 years was totally impractical, but I loved it. Living on a small island on the Pacific at the time, my neighbors thought I was crazy buying a Tesla with no service available. Depreciation is a huge part of cost of ownership. The Tesla wound up making me a million dollars so far.

 

[insaneoctane]

Has anyone seen/ looked into the cost estimates for the IRA? Just curious how out of bed their predicted number of vehicles to utilize the subsidy vs just our predicted Tesla production numbers alone. My guess is the cost (must be estimated by the CBO, right?) is way under estimated. Just a hunch.

 

[SOULPEDL]

Big brother joins the little one indoors. I especially love how there’s no Engine Block to have to cool off after a drive in this heat.
I’m not against color, just that blue is too blue and red is… not green. This is Az, so Stainless would be very cool.
(Ha. I didn’t plan on this symmetry, not in parking them nor the photo, but it’s a cool effect with the floor line.)

 

[MikeC]

With the $37k price difference between the two cars he referenced, you could buy a fair number of Tesla shares...

True - but you’ll need the conviction that comes from driving the car to hold them!

 

[Zythryn]

@Skryll said it. Tesla increases prices, and increased demand allows them to prioritize higher margin orders. This revenue increase is NOT zero, even if not one single additional vehicle is delivered.

This is a fair point. People getting a rebate MAY spend more on options.
However, I still stand by the idea that this will not be the huge windfall some think it will be.

I would love to see some numbers afterwards about the take rate of various options.
As for Tesla increasing prices overall, they have been doing that for over a year and it hasn't shortened the waiting line. It will be difficult to untangle why Tesla made a price increase. I don't think the presence of the rebate is required for them to be able to do so.

 

[StarFoxisDown!]

This is a fair point. People getting a rebate MAY spend more on options.
However, I still stand by the idea that this will not be the huge windfall some think it will be.

I would love to see some numbers afterwards about the take rate of various options.
As for Tesla increasing prices overall, they have been doing that for over a year and it hasn't shortened the waiting line. It will be difficult to untangle why Tesla made a price increase. I don't think the presence of the rebate is required for them to be able to do so.

It also makes it so the chances of price cuts as inflation drops less likely. Practically takes away any chance of price drops for the next 2-3 years, if not 3-4 years. During that time, Tesla will continue reducing costs and recognizing efficiencies in the manufacturing process which will lead to higher gross, operating, and net margin.

So the impact on revenue is debatable, but the impact to margins and profits isn’t

 

[Skryll]

True - but you’ll need the conviction that comes from driving the car to hold them!

100% this, plus why deprave yourself of a positive life experience just for some extra money, find a balance. Plus you living with it, makes you demonstrate to others how desirable it is, and will result network and butterfly effect wise in faster appreciation of the stock you do own. Trust me. Also, you will likely finance most of the purchase price, appreciation of Tesla shares sure beats any interest rate you could pay off faster by not buying more TSLA? Thats how I got our free 2016 Model X90D and 2018 Model 3 LR RWD

 

[samppa]

Anothet anecdotal point to phevs.. was talking with a vw dealer some time ago, he told me they are getting now back a bunch of leased gte hybrids, 3-year leases are up.
These have been mostly company cars, so your monthly payments cover gas. Never plugged in.
Almost all batteries are dead or have degraded to very little capacity from sitting at so low state of charge all that time.

Also these hybrid batteries suck since there is no liquid cooling/heating.. most are just passively cooled and won't last for long.

compare this battery life:
one tesla, 75kwh battery, will last 10 years or longer, the new 4680 cells might last 20..

or ten hybrid cars with 7kwh batteries
that are all practically dead in 3-5 years

Which one is a better use for the cells?

 

[Rohan]

We are of a similar mind on this. (Don't expect to win the most number of "likes" competition.)

Electric cars will be a commodity with low profit margins within a decade. Much sooner than is necessary to justify TSLA becoming the most valuable company in the world. Elon has stated that FSD will succumb to the same problem.

My investment thesis is that Elon will be wrong about FSD and that FSD/AI will have strong network effects (I'm using the term loosely to describe most durable competitive advantages. To include ecosystem but exclude brand and first mover). Millions of cars driving around observing road conditions, traffic, open parking spots, detours and Robotaxi availability will drive the flywheel (Dojo and feedback loop) resulting in fewer accidents, better driving and improved navigation. Personalizing this information to include Bot, as almost a personal assistant, will make it much stickier. Tesla Bot/AI/FSD will be added to the list of accountant, lawyer, banker and wife - those who are hard to fire (even if you want to) because your lives have become so intertwined. The car may end up being a loss-leader to peddle our software, so I give it a high value ... but nowhere close to 900B.

Valueing TSLA on earnings has become popular lately on the board. While there is some validity to this approach, I think it works better with companies that have predictable long term earnings. I prefer something more opaque, pace of innovation and product roadmap for my analysis. The numbers are no more than guesses, but I prefer to look at the horizon rather than down at my feet. Early investors in TSLA were rewarded for seeing what Tesla was becoming more than what it was. I place a negative value on analyst reports that only span a few years, are based on earnings and don't even consider AI. They missed the last run and will miss the next.

Hi, you really need to sell your shares as soon as possible. I'll have them if you like. If I understand you correctly your investment thesis is reliant on Tesla solving fsd because apparently, EVs will be a commodity with low profit margins. But, all the evidence is that Tesla margins are likely to increase in the near to midterm. Low margins for other mfs is agreed because they don't want to succeed. But Tesla has healthy and increasing margins, yes? In order for EVs to be a commodity, there would have to be an excess of batteries, which isn't happening any time soon and certainly not soon enough. So the evidence, if you read the posts on this thread at all is that Tesla ar least can in the near to mid term make vast wedges of profit from EVs. That is certain. FSD is a gamble. There's simply no evidence for it becoming a reality any time soon. If I'm wrong then I am going to be fantastically rich rather than just very rich. So I'm good

 

[lascavarian]

Here is a little math doodle. What % of Tesla do you own?

Number of shares owned divided by 1,000,000,000 shares gets you about right or close at least. There is little debt To consider.

This decimal number might then be applied to the production number you estimate for this year such as 1,400,000 units. Your guess. Multiply it out.

This yields the quantity of EVs your percentage of ownership may produce this year.

These EVs (or portion thereof) will be delivering years of EV benefits because investors like you hold your shares whether you own a Tesla or not.

Something like .14 EVs per 100 shares per year (and growing). It is another way to look at ownership and investment. YMMV - not a mathlete

 

[Causalien]

Anothet anecdotal point to phevs.. was talking with a vw dealer some time ago, he told me they are getting now back a bunch of leased gte hybrids, 3-year leases are up.
These have been mostly company cars, so your monthly payments cover gas. Never plugged in.
Almost all batteries are dead or have degraded to very little capacity from sitting at so low state of charge all that time.

Also these hybrid batteries suck since there is no liquid cooling/heating.. most are just passively cooled and won't last for long.

compare this battery life:
one tesla, 75kwh battery, will last 10 years or longer, the new 4680 cells might last 20..

or ten hybrid cars with 7kwh batteries
that are all practically dead in 3-5 years

Which one is a better use for the cells?

doesn't the gasoline engine charge the battery in a phev?

 

[MP3Mike]

doesn't the gasoline engine charge the battery in a phev?

That wouldn't make a lot of sense. Say you drive double the battery only range and it charges the battery on the way back, now when you get home it is full and there is no point in plugging in.

 

[Discoducky]

doesn't the gasoline engine charge the battery in a phev?

Yep, but I had to laugh remembering the supposed "perpetual engine" ads from Lexus and Toyota

 

[Causalien]

That wouldn't make a lot of sense. Say you drive double the battery only range and it charges the battery on the way back, now when you get home it is full and there is no point in plugging in.

So what % of phev owners actually charge?

 

[TN Mtn Man]

I see Aunt Cathie sold TSLA and bought ROKU again today in her flagship fund.

I'm trying to give her the benefit of the doubt. Her analysis and her pound-the-table conviction on TSLA was a factor in me going most-in into TSLA. And I kinda understand her strategy to double down on beaten down stocks. But my patience is wearing thin. As strong as her conviction is on TSLA, I don't understand why she would lighten her holdings, especially since it's obvious to most of us that we are on the cusp of another run over the next year or more. Surely she has to see this also.

Smh and really kicking myself for having invested in her funds, thinking I was diversifying. Clearly a case of di-worse-ifying in this case. I would have been so much better off going all-in instead of most-in TSLA.

I still have a fair amount of ARKK and ARKG. Only reason I still have it is it's down ~65% and I don't want to lock in those kinds of losses. I think her "philosophy" of disruptive technology makes sense, but she sure has picked some losers this last year. Still, one "10-bagger" and you can have several holdings go bust and still be fine.

 

[traxila]

I still have a fair amount of ARKK and ARKG. Only reason I still have it is it's down ~65% and I don't want to lock in those kinds of losses. I think her "philosophy" of disruptive technology makes sense, but she sure has picked some losers this last year. Still, one "10-bagger" and you can have several holdings go bust and still be fine.

That was basically my philosophy. Had some huge losers, but TSLA, ENPH, and SEDG have made them all moot.

It also helps that my largest bet by far was TSLA. Minimum 20x more than any other stock I ever invested in.

 

[WattsHappening]

How are you doing? Isn’t it great to be able to look forward to viewing our portfolio again, to savor shortz burning? Now on to my 1st post. I usually just enjoy reading the insights of others seasoned Tesla investors. Needless to say, I am also a Tesla supporter, more so for the mission than for dominating all players in EV and renewable energy. I’d love to see Apple, BYD, Ford…step up and create some real challenge to Tesla. We’ve seen examples of near monopoly in industry…Facebook, Microsoft, Boeing…even Google.

5 years ago I did a financial analysis of buying new, 1) Model 3 vs 2) Phev of same size/class. I based on my own usage model, costs and my projection of gasoline cost at $5 at 5 years. The first 3 years I was badly off the mark wrt gas $, but this year I’m right. So much for my forecasting energy $. I have these 2 key factors in my model: We have rooftop solar (cover my trip to work) and I have free charging at workplace (free ride home). Now I didn’t expect the free charging to go on for much longer and indeed it is becoming harder to find an unoccupied charger each month. So long short, a new model 3 didn’t even come close in terms of ROI in 5 years. I got similar, maybe even better $ incentives for the Phev such that it really only costed $20k, and it is a mid level with navig, pwr seats, premium sound and superior warranty both battery and drivetrain. I loved the model 3, however I didn’t love the shoddy production hell quality.

Today, bc all the uproar on this potential EV credit bill, I correct myself, it is “Inflation Reduction Act”. I did a back of napkin update on my 5 year old analysis. To my surprise and dismay, it still does not work out for a model Y. (I actually have one on order, TSLA had been good to me) W-t-h, tell me where I went wrong.

Y vs. / Ioniq Phev (I updated our family preference to suv)

Mpge 119 / 131hw 117cty (I used ave 124)

Range 330m / 29 e 620 total

Start $ 65,990 / $27,845

Ave daily 39 miles (mine was very close to AAA’s average)

Gas $4.23 per gallon, electricity $/kwh is irrelevant since same for both car.

So in summary, I would need to drive 10 miles per day on average, on gas. Which is 0.084 gal/day or $0.355 cost of gasoline for the Ioniq plugin.

It would take 107 years to break even. What am I doing wrong?
It is not Inflation Reduction if $ of wheels doesn't pencil.

ROI?

What's the ROI comparison between a meal at a Michelin star restaurant versus a Big Mac meal deal at McDonalds?

Or the ROI of a Hawaiian vacation versus a stay-cation?

Or the ROI of buying a Rolex versus a Timex?

Often times, we make decisions not based on ROI, but on other non-measurable things like happiness and enjoyment. To me, owning and driving Teslas is a perfect example. I didn't do an ROI calculation before buying. The Teslas we bought were easily the most expensive cars we've ever bought. But they have delivered so much more enjoyment and happiness than previous cars, there is no question they were good 'investments.' So that is what you are missing in your calculation: the enjoyment/happiness factor.

Also, you didn't add termination value to your ROI calculation. We were able to sell our first Tesla for more than we paid for it after driving it for 3+ years. So what happens to your calculation if the termination values are $55,000/$10,000?

Edit: I added the Rolex v. Timex comparison due to a similar dynamic of used prices. The way Teslas have held their value in the used car market is analogous to some luxury watch brands, Rolex and Patek Philippe being the obvious comparisons.

 

[TN Mtn Man]

@Ibreakrules
2 quite easy anecdotal examples
1) Spouse's cousin. Company car, free gas, PHEV. _Never_ plugged in, L1 charger still in trunk in bag unopened (big car not GM Volt), too much trouble he said
2) AW from SA, automotive writer, _seem_ to recall probably ~8-10 yrs ago. never did. GM Volt
3) buncha others

I had 2 PHEV's, absolutely _worst_ mistake ever. ICE engines plus _Compliance_ batteries
$7,500 Fed tax credit specifically written for 16kwh Volt (max 10.1kwh usable)
I shoulda bought an S60, or even an S40 as couldn't afford an S85

My GM Volt only saving grace was it died in a rear end collision at the _first_ stoplight coming into El Paso Texas in 90 miles out of Guadelupe Mountains instead of myself and spouse, (guy hit us, we were stopped) Model 3's not out yet

Like BP Duke said, PHEV's had their day, and it was way in the past

I'd guess most people don't get free gas. I've been following a PHEV page for the Sorento (along with a bunch of other cars). Like Tesla, they have some fans that see developing the skills to use as many electrons vs gas as possible. Some are putting in a tank 2-4 times a year. When someone else is paying for the gas, people don't have a reason to be responsible (much like the gov workers getting PHEVs in the link posted). But when someone does the research and spends the premium for a PHEV (with their own money!) I expect you see a lot more plugging them in. Much like Tesla owners, those people tend to be "enthusiasts".

On a different note, I want a Tesla (haven't made the leap yet) and looked at renting one for a trip to my brother's place in Alabama (Vernon), from my place in East TN. Only problem, the nearest DCFC to his place remotely on my route (still about 30 miles out of the way) is about 125 miles from his place, so 250 miles round trip. There aren't any commercial level 2 chargers in his small town (or at his house) and I don't want to presume to ask to plug in an extension cord to level 1 charge at his house. So yeah, there is some infrastructure build-out to be done to make BEVs a little more universally practical, especially in smaller towns/remote areas (regarding DCFC). At my home, I'm an hour and a quarter from the nearest DCFC. Not an issue with a home charger, but a real issue for a renter. My previous home in Idaho was much more remote, there were a lot of loops in N. ID and N. Montana where ABRP threw up it's hands. But again, no doubt it's coming. Still, places like this are where PHEV with home charging could operate as a EV for normal, daily commuting, and only count on the ICE for trips, AT THIS TIME.

 

[SmokyPeat]

I'd guess most people don't get free gas. I've been following a PHEV page for the Sorento (along with a bunch of other cars). Like Tesla, they have some fans that see developing the skills to use as many electrons vs gas as possible. Some are putting in a tank 2-4 times a year. When someone else is paying for the gas, people don't have a reason to be responsible (much like the gov workers getting PHEVs in the link posted). But when someone does the research and spends the premium for a PHEV (with their own money!) I expect you see a lot more plugging them in. Much like Tesla owners, those people tend to be "enthusiasts".

On a different note, I want a Tesla (haven't made the leap yet) and looked at renting one for a trip to my brother's place in Alabama (Vernon), from my place in East TN. Only problem, the nearest DCFC to his place remotely on my route (still about 30 miles out of the way) is about 125 miles from his place, so 250 miles round trip. There aren't any commercial level 2 chargers in his small town (or at his house) and I don't want to presume to ask to plug in an extension cord to level 1 charge at his house. So yeah, there is some infrastructure build-out to be done to make BEVs a little more universally practical, especially in smaller towns/remote areas (regarding DCFC). At my home, I'm an hour and a quarter from the nearest DCFC. Not an issue with a home charger, but a real issue for a renter. My previous home in Idaho was much more remote, there were a lot of loops in N. ID and N. Montana where ABRP threw up it's hands. But again, no doubt it's coming. Still, places like this are where PHEV with home charging could operate as a EV for normal, daily commuting, and only count on the ICE for trips, AT THIS TIME.

I'm sure your brother would be happy to let you level 1 charge at his house. Toss him a few bucks for the electricity if that's your concern. He'd probably enjoy getting to test out a Tesla as much as you would.