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

[ZeApelido]

Sadly, I disagree on Brazil. The skilled workforce is aging, and many qualified engineers have been emigrating. There is a large auto industry, and some, notably CAOA have managed excellent quality for the vehicles they build. However, there is not a good way to absorb 1.5 million or more in all of Mercosur. However, a plant in Mexico could supply Mercosur and all of North America. A Mexican plant seems likely to be quite high on the consideration list.

We used to have an expert on Brazil here, but sadly he ghosted us to probably

1) go run for Brazilian president
2) win
3) get caught in some scandal
4) claim Elon Musk is attempting a coup to get Brazilian minerals

 

[Prunesquallor]

The Isaac Asimov book that laid all this out was The Naked Sun. And while that book was a sequel, it reads just fine if you read it first (It was the first Asimov book I read actually). IMHO, the book still holds up well now, 65 years later, which isn’t something you can often say about early sci-fi.

It is set in a world that is the end game of a fully robotized society. 20,000 humans occupy a distant planet, each with huge robot workforces to do all the mining, food production, building, etc. There are very few human experts in anything since the robots do everything. Needless to say it has profound societal consequences.

With Folded Hands, a 1947 novelette by Jack Williamson is another of those robotic-servant cautionary tales. It still creeps me out.

 

[Singuy]

We really need another category for OTA recalls.

For Tesla only 7,311 were physically recalled to the service center. 2,250,339 were fixed with over the air updates. This is right from the NHTSA website. The majority were really silly and just had to do with the noise made by pedestrian warning speaker.

All of the Ford recalls start with "Dealer will perform" so I assume no OTA.



View attachment 837420

At Ford, Quality Is Now Problem 1

Ford used to tout the reliability of its vehicles in ads. After a string of recalls, the auto maker is trying to change how it finds problems.

www.wsj.com

It's wsj. I'm surprised they didn't include every girl Elon has been with in those recall numbers.

 

[insaneoctane]

Which begs the question, why didn’t they do a 5-1 instead?

What was the share price when the split first surfaced? What was the share price when the previous split first surfaced? I'm guessing the post split price, calculated using the SP when the split suggestion first surfaced is quite similar between the last 5:1 vs this 3:1...

 

[Cosmacelf]

It's wsj. I'm surprised they didn't include every girl Elon has been with in those recall numbers.

The WSJ takes omitting pertinent facts, and selectively presenting damaging ones, to an art form.

 

[Skryll]

.Under the current proposal, a car is only eligible for full credit if the batteries were made with materials from the U.S. or countries that have trade agreements with the U.S. — a requirement that some experts argue will make it very difficult to obtain the tax credit.

But those provisions can apparently remain in the package — a decision likely to please Sen. Joe Manchin (D-W.Va.), who wanted the restrictions in order to curb the electric vehicle industry. [edited for accuracy Skryll]

More accurate without the 'reliance on China' part.

Look at who pays for Manchin to understand his goals.

 

[insaneoctane]

When I bought my car I thought of 3 possible timeframes too keep the car:
- 4 years: sell the car when it is still worth something
- 15 to 20 years: drive the car until the wheels fall off, in order the spread the purchase cost over as much years as possible
- 8 years: sell the car by the time the drive train warranty expires, in order to avoid the risk of expensive repairs

When I bought my Model S in 2016 the car was so far ahead of the competition that I didn’t think technology advances might be the main reason to sell. But here we are in 2022, and a new Model S has the following advances I’m interested in:
- 600 to 650km range instead 350 mainly because of efficiency reasons: roughly 180Wh/km instead of 220km
— I would lose free supercharging, but I charge >80% at home, so total charging cost wouldn’t change a lot
— much higher second hand prices for old Model S’s, certainly if they have free supercharging (electricity may approach 1 euro/kWh this winter in Europe)
— longer range is mainly useful on location on holiday, to avoid dealing with the different charge cards that seem to be needed everywhere. There are now so many supercharger location that extra range is not needed to reach your holiday destination
- new autopilot being much more functional than autopilot v1
- better infotainment
- smart card instead of key fob, phone as key
- much better active suspension
- native CSS support (hopefully, to be confirmed)
- better climate control
- better noise isolation
- better seats

So I’ll probably sell my Model S before it‘s 8 years old, and the drive train warranty expiration will only be a minor reason amongst a lot of tech reasons.

I'm also guessing premium connectivity will change from free to monthly, albeit only $10 or $20 per month...

 

[oneday]

That's how I'd characterize his entire approach to the Twitter deal from the beginning.

One big reason is because he should’ve waited until after earnings, the writing was on the wall that advertising revenue would be down. He couldn’t have predicted the Ukraine War, but earnings was within 1 mo IIRC.

 

[M|S|M MYP]

As the world turns....

 

[lascavarian]

One big reason is because he should’ve waited until after earnings, the writing was on the wall that advertising revenue would be down. He couldn’t have predicted the Ukraine War, but earnings was within 1 mo IIRC.

This view is a little atypical I know.

I don't think the Shareholders meeting was entirely for shareholders. EM was generous with his time and pleasant, hopeful views partly because his most important audience was Twitter employees. He demonstrated that he could take a business (automobiles) and achieve more than anyone could imagine. He showed that he works hard, has loyal employees, builds new things that challenge conventional thinking and that he is approachable, gifted and ambitious.

Who at Twitter would not want to close this deal. There is good return on the stock and a great chance to change the world as part of an unbelievable team. What a gift opportunity. Elon is even talking down expectations that will guarantee lots of room for success for those key Twitter employees.

I don't know at what price but it seems clear to me that this deal is going through and Elon can't wait to get at it but getting a slightly better price will retain resources that can be put toward the goal.

 

[wtlloyd]

Development time for Gigafactories may not be as lengthy as they have been to date. Austin, for example, required massive groundwork before the first structural pours started. Earthmoving and compaction, extensive geopier installations, it was 6 months before they started getting steel up.

 

[Krugerrand]

Look, you and I think Tesla is underpriced, but that doesn’t mean the market does. You proposed combining everything into one giant public company. What you and I think it is worth is meaningless, as we don’t have $1T hanging around to invest in it. People already have a hard time valuing a pretty straight forward auto manufacturer. Combine in a bunch of speculative investments (and a failing social media company!) and it won’t get any better.

I do agree that SpaceX (and only SpaceX) might fetch more as a public company today than its current $100B or so valuation, but there’s no guarantee even on that. Regardless, it is moot. Unless Elon changes his mind, it will stay private, with only Starlink being spun out at a very rich valuation once it is in sight of cash flow maturity.

I disagree with the premise ‘people’ have a hard time valuing a straight forward auto company. We know how to value it and I contend the head of WallStreet knows exactly how Tesla should be valued. But they don’t make money valuing it and keeping it properly valued. They make money valuing it all over the place but where it should be, and creating various narratives to tell lies.

 

[CorneliusXX]

Captive finance is not a license to mint money, despite the potential market. From the very first captive finance company, GMAC in 1919 and General Ele truc Credit in 1932 the idea was to finance purchases of Model T and refrigerators to people who could not afford them. Nothing fundamental has changed.

Tesla and Solar City before, have dealt in financing of various kinds. They do still and that will grow. Every significant move, including Tesla Insurance, has been built of quite careful thought about what Tesla must do to be significantly better than other choices.

Elon Musk knows and understands both finance and the entire financial services industry. Neither he nor Tesla will do something simply for profit, there must be contribution to objectives. Regulation hasn’t much to do with that, pro or con.

Most major recessions and depressions have involved financing excesses driven by over-optimistic financiers or worse. Tesla executives know that too. Apple, Google, Amazon and Tesla all aren’t ready to choose to do something that yields higher risk and lower rewards.

If you ask where hubris goes, ask Goldman Sachs how they feel about the Apple Card. Great from consumer perspective, not so glamorous for them.

I hope TSLA steers clear, as they’re doing, unless there are very solid reasons why.
If TSLA ever makes big moves in financial services without them I’ll immediately sell my shares and join the shorts. I do not ever expect to need to do that. Elon is not crazy.

I don't particularly agree. For a few reasons:

• Tesla already directly finances vehicles in certain countries - where is your cutoff between what they do now and selling your shares? (this is a good faith question)
• Asset finance has been hugely successful for multiple decades for legacy automakers - only when lending standards dropped did they fall into trouble. Certainly while Elon is there this is not likely to happen. From my read of your post it seems you are only looking at the downfall of captive finance in the GFC or equivalent crises, and not the massive benefit of expanding the market for new technologies that originally inspired captive finance - happy to be proven wrong.
• Seamless finance is an excellent driver of demand and an improvement in customer satisfaction - while it's not necessarily needed for vehicles as the asset class is very well known (even thought tesla finances vehicles), it could remove a real ball ache for people wanting to finance solar roofs, HVAC systems or the tesla bot as these are new technologies which would likely be difficult to finance or would incur increased costs (what's the RV on a Tesla Bot?)
• If Tesla uses their own cash to finance loans their treasury would be competing against their other options that are relatively low yielding (government bonds, etc) or against Bitcoin, which they mostly sold. A decent captive finance arm should easily be able to outperform these options.
• The vast majority of funding for captive finance arms is provided by outside investment (e.g. securitising loans) - so the impact on Tesla's liquidity is minimal, and could in fact improve the overall liquidity as Tesla has the timing option on when to sell down leases/loans.

 

[Krugerrand]

I know more than one of you has looked back at the data from the last stock split, and overlayed it onto the coming one. Would you guys mind talking about what you think is going to happen in the next 2-3 weeks in relation to the split and stock price movement?
I missed a huge part of the increase because I was so so new to the stock market. I got caught by the "3 day rule". I traded a day too soon to be outside the rule and was put in "Time Out" for 3 days. Unfortunately it was 4 days before the stock was to split. I lost about 20% while in trader's jail. and even worse I got out just a day before the split. As soon as I was able to I jumped completely back in. At which time the market dropped about 10% for the day...
So my mind is still suffering PTSD and I can't remember how it all went down.

Ant, buy and hold.

 

[Fred42]

Development time for Gigafactories may not be as lengthy as they have been to date. Austin, for example, required massive groundwork before the first structural pours started. Earthmoving and compaction, extensive geopier installations, it was 6 months before they started getting steel up.

Every location will have challenges, just not all the same ones.

 

[M|S|M MYP]

Ant, buy and hold.

Now that the split has an official date....what is mom's new SP target? Inquiring minds would like to know when we can put the order in for the mansion on the mountain

 

[dhanson865]

I had a dream this morning that I'd received a Blue Tesla with a yoke and when someone asked me about it I said it was only $44k. Not sure if I dreamed about buying a used car or if in my dream new cars had dropped in price. Not sure if it was a Model S, Y, or 3. But it was the car of my dreams.

 

[Krugerrand]

Now that the split has an official date....what is mom's new SP target? Inquiring minds would like to know when we can put the order in for the mansion on the mountain

She’s still not talking to me about it. She’s a great grudge holder.

 

[Snerruc]

We used to have an expert on Brazil here, but sadly he ghosted us to probably

1) go run for Brazilian president
2) win
3) get caught in some scandal
4) claim Elon Musk is attempting a coup to get Brazilian minerals

Or maybe he became unk45.

 

[M|S|M MYP]

She’s still not talking to me about it. She’s a great grudge holder.

I see the apple does not fall far from the tree......