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I'm just trying to justify this drop with record breaking P/D numbers released. If 'analyst' couldn't correctly identify that there would be logistical challenges with worldwide deliveries shouldn't that reflect an error in their research and not a problem with Tesla's growth potential? Maybe I'm still in shock/denial phase
I'm just trying to justify this drop with record breaking P/D numbers released. If 'analyst' couldn't correctly identify that there would be logistical challenges with worldwide deliveries shouldn't that reflect an error in their research and not a problem with Tesla's growth potential? Maybe I'm still in shock/denial phase
I'm just trying to justify this drop with record breaking P/D numbers released. If 'analyst' couldn't correctly identify that there would be logistical challenges with worldwide deliveries shouldn't that reflect an error in their research and not a problem with Tesla's growth potential? Maybe I'm still in shock/denial phase
Yeah I’m with you. Quite an extreme response that feels more like someone got cover to do a lot of selling. Could be CS-related. Or maybe even Elon (though not sure if he’s allowed to at the moment).
Haven't read every post here since yesterday's P&D announcement, but I have been somewhat pleased at the tone of all the headlines. Instead of the "Demand Craters! Tesla in Trouble " stuff i was expecting, I am seeing a decent percentage of things like "Tesla misses on deliveries...but analysts say production is more important ". It's almost like they are giving themselves an "out" for earnings or Q4, etc. We'll see...
I don’t agree with Elon on this one. But I think that like any other individual he can have an opinion and express it on Twitter. In this case he is looking, in his way, for a solution to avoid further bloodshed and maybe even nuclear war.
Many are cheering about the territorial gains the Ukrainians are making, from the safety of their homes, but thousands of young people are dying. Many accept that this massive loss of life is part of the deal. Even I do and I’m not proud of it. Elon does not.
Should he just keep that opinion to himself, shut up and stick to memes and jokes because he’s the CEO of a big company? If you’re mad at him, raise your hand if it’s not because it may be costing you money? Anyone? If it’s not about the money, why would you condemn Elon for giving his opinion about an end to this war?
It was just evidence of the count of shares that CS has/had to back up my claim that they owned 4.8 million shares. I didn't want to give a number and not back it up with a link to where I got that information. They might still have that many and not sold any, we wont know until a newer report comes out. Heck, for all we know it could have been Elon selling today
This is not sustainable.
I just sold off ~15% of my remaining TSLA shares to cover yet another scary margin call and buy more call options.
I've said it before and I'll say it again: I expect a TSLA explosion in 2023 so large that it's bigger than any other inflation-adjusted, single-year market cap rise in the entire history of capitalism, and that's even if there's a recession and without material impact from the supposed leaps forward in FSD performance that the AI team has in store for us in the coming months.
Even with ridiculously low institutional analyst estimates of $5.85 non-GAAP EPS for 2023 (per Yahoo Finance) the 2023 P/E is now 42. For 2024 the average estimate is $7.09/share for a P/E of 34. Absurd.
My model still outputs a 2023 estimate 170% higher than theirs, with $16/share earnings as the maximum likelihood estimate. This hasn't changed much, so my post history can be reviewed for more details.
2023 Vehicle Unit Economics
I'm still projecting major gross margin expansion due simultaneous improvements on both revenue and cost.
$27k gross profit per car (43% gross margin) by Q4 '23 sounds crazy, but really it just boils down to two estimates:
Revenue per car will rise by $6k from $56k in Q2 '22 up to $62k in Q4 '23.
Cost per car will gradually revert to around the $34.5k-$36.5k range we had from Q1 '21 through Q1 '22
For revenue most of the bump I expect just because of the price increases from earlier in 2022. I think that we're mostly, if not completely, done with the 2021 price increases but I think the 2022 hikes hadn't hit much at all in Q2. Some of the revenue improvement expectation is coming from selling more Ys and Cybertrucks, and a small portion from FSD and insurance. There is substantial upside if demand growth continues to outpace supply growth and especially if FSD has amazing breakthroughs that tangibly improve the value proposition.
The car buying market still has immense potential demand waiting latent due to mere ignorance and lack of awareness about EVs and Teslas. Occasionally, exogenous events can trigger sudden, rapid social changes based on learning and sharing ideas. I think we already started to see this learning effect and consumer mindset shift in 2022 with fuel prices and the war, but the Vegas Loop isn't even scaled up yet and Cybertrucks still aren't shipping. For another example, see the steep decline in American religiosity immediately following the advent of mainstream internet usage and then again following the advent of mainstream social media usage. If even 10% of the population simultaneously changes their minds on wanting to buy Tesla cars, that's enough to overwhelm Tesla's near-term production capacity and drive prices up further.
Only a few decades ago, a Christian identity was so common among Americans that it could almost be taken for granted. As recently as the early 1990s,
www.pewresearch.org
The cost side mainly accounts for temporary impacts in Q2 from Shanghai shutdowns, the war in Ukraine, and new factories entering the low rate initial production phase, which appear to be the main reasons why cost per car jumped up almost $5k QoQ. The cost estimate also now accounts for the US tax credit of $45/kWh for battery manufacturing, which impacts the global cost average by $1.4k per car if the average battery capacity is 80 kWh and 35-40% of Tesla's production is allocated to the USA. I am conservatively not counting any impact from the 10% US tax credit for critical battery minerals. (Last year 33% of Tesla's global production was sold in America but that was without Giga Austin and without the tax benefits incentivizing Tesla to sell American-made vehicles in the domestic market.) So, on cost I'm basically just modeling for a regression to the mean as the dust settles from the mid-2022 craziness, with all the cost improvements combining to cancel out the effect of inflation.
I have more detailed justifications for these projections in my post history.
2023 Volume
2.8M vehicles
0.64 Fre
1.3 Sha
0.45 Ber
0.42 Tex
Fremont made about 136k in Q2 (544k annualized). 650k is the nominal capacity according to the Q2 update deck (100k SX, 550k 3Y), but I don't believe that number any more than I believe ">750,000" for Shanghai and ">250,000" for Berlin and Austin. 640k in 2023 would be moderate growth, projected based on 110k SX and 530k 3Y, with run rates in Q4 '23 slightly exceeding the nominal capacity.
Shanghai is already around 1.1M annualized run rate today, so 1.3M for 2023 isn't much growth compared to past growth. Giga Shanghai could do much better than this, maybe even producing as much as 1.5M in 2023 if they manage 50% growth in run rate from ~1.2M at the beginning of the year to 1.8M by December. I'm also keeping this lower due to the possibility of another government shutdown artificially affecting production.
Berlin and Texas numbers equate to 2023 averages of 8.7k and 8.1k cars per week respectively. They're still supposed to be at 5k per week by the end of this year. Shanghai hit 5k per week in Oct '20 and twelve months later got to 12k per week in Sep '21. Berlin and Austin should go substantially faster than Shanghai did (as Tesla leadership has directly guided), but there's also uncertainty about all the new technology like 4680s and also macroeconomic uncertainty around supply chain and especially the war situation in Europe, so I think it's a fair balance to just project these plants slightly exceeding the speed of Shanghai.
Macros!!! Scary! Fed! Ukraine! Credit Suisse Collapsing! UK Pound Collapsing! Global Recession!
How low can the TSLA P/E ratio realistically get? TSLA now is quite different from TSLA in the 2014-2019 doldrums, because now Tesla has tangible earnings and free cash flow, plus they've demonstrated they can mass-produce cars successfully so there's less execution risk.
Roughly, I think there's a 99.9% probability that TSLA will maintain a current P/E greater than 25, equivalent to a 1/25 = 4% dividend yield. For comparison, right now the S&P 500 is trading at a trailing-twelve-month P/E of 19 and it frequently exceeds 25, like it did last year for example. I think this puts a floor on the TSLA trading range even in a Great Depression 2.0 scenario, and that floor will step up quarter after quarter after quarter as the earnings keep rising.
At today's share price of $243, the P/E based on my Q4 '23 $5.08 earnings estimate would be merely 12. If it were 25 at that time, TSLA would be trading at ~$510. At a more realistic 70 P/E, TSLA would be at $1420. At 100--which TSLA's current P/E was above at this time last year--TSLA would exceed $2000.
Even if my Q4 '23 EPS estimate ends up being 2x too high, such that Tesla actually earns $2.54/share (equal to ~$37B annualized net income) and TSLA has a current P/E of 25 at that time, TSLA would still end up at $254 (5% higher than today), and obviously earnings would still be growing so the share price would quickly increase from there going into '24 and '25 as earnings double and double again.
For comparison, look at the charts below to see how the market treated Microsoft, which hit $39B income in 2019 with much slower growth than Tesla has been showing. The P/E since then has stayed between 25 and 40, and it dragged the share price up with it as earnings kept growing. I want to emphasize how much slower Microsoft's earnings growth was compared to what Tesla is about to do. Microsoft doubled earnings in 3 years for a 25% CAGR. Not even in the same league as Tesla in the next several years.
@StarFoxisDown! was hammering away at this analysis a ways back, when the looming 2Q, 3Q, 4Q earnings deluge became apparent. I feel like TMC looked at this rational PE-based analysis for 2 days, fully agreed it was logical, then went right back to letting their sentiment sway in the breeze.
Even the originator of the analysis is now seeing nothing but clouds and doom thru 2023.
I just don't understand how we can all agree on so much fundamental value.......but then not appreciate how EPS changes the conversation for good. And changes it in such a clearly defined window of time.
The overarching rule of the universe is that cash is king. It's plain as day Tesla's going to earn the most cash from here thru the end of the 2020's.
I don’t agree with Elon on this one. But I think that like any other individual he can have an opinion and express it on Twitter. In this case he is looking, in his way, for a solution to avoid further bloodshed and maybe even nuclear war.
Many are cheering about the territorial gains the Ukrainians are making, from the safety of their homes, but thousands of young people are dying. Many accept that this massive loss of life is part of the deal. Even I do and I’m not proud of it. Elon does not.
Should he just keep that opinion to himself, shut up and stick to memes and jokes because he’s the CEO of a big company? If you’re mad at him, raise your hand if it’s not because it may be costing you money? Anyone? If it’s not about the money, why would you condemn Elon for giving his opinion about an end to this war?
I don’t agree with Elon on this one. But I think that like any other individual he can have an opinion and express it on Twitter. In this case he is looking, in his way, for a solution to avoid further bloodshed and maybe even nuclear war.
Many are cheering about the territorial gains the Ukrainians are making, from the safety of their homes, but thousands of young people are dying. Many accept that this massive loss of life is part of the deal, Elon does not.
Should he just keep that opinion to himself, shut up and stick to memes and jokes because he’s the CEO of a big company? If you’re mad at him, raise your hand if it’s not because it may be costing you money? Anyone? If it’s not about the money, why would you condemn Elon for giving his opinion about an end to this war?
If it’s not about the money, directly or indirectly, what then is the motivation for some investors to get this mad at Elon for trying to find a way out of this horrific war? Do they feel they own him and can determine what opinion he is allowed to express?
None of your business. I love how all these long term TSLA holders (like me since 2013) preach to others who may have bought recently and may not be able to ride out the current environment. I realize I got lucky with my continued TSLA purchases over the years. Keep some perspective.
Asking genuine questions to get a better idea of a situation is preaching? Ah, ok. Looks like one of us needs a dictionary and a suppository for Christmas.
This is not sustainable.
I just sold off ~15% of my remaining TSLA shares to cover yet another scary margin call and buy more call options.
I've said it before and I'll say it again: I expect a TSLA explosion in 2023 so large that it's bigger than any other inflation-adjusted, single-year market cap rise in the entire history of capitalism, and that's even if there's a recession and without material impact from the supposed leaps forward in FSD performance that the AI team has in store for us in the coming months.
Even with ridiculously low institutional analyst estimates of $5.85 non-GAAP EPS for 2023 (per Yahoo Finance) the 2023 P/E is now 42. For 2024 the average estimate is $7.09/share for a P/E of 34. Absurd.
My model still outputs a 2023 estimate 170% higher than theirs, with $16/share earnings as the maximum likelihood estimate. This hasn't changed much, so my post history can be reviewed for more details.
2023 Vehicle Unit Economics
I'm still projecting major gross margin expansion due simultaneous improvements on both revenue and cost.
$27k gross profit per car (43% gross margin) by Q4 '23 sounds crazy, but really it just boils down to two estimates:
Revenue per car will rise by $6k from $56k in Q2 '22 up to $62k in Q4 '23.
Cost per car will gradually revert to around the $34.5k-$36.5k range we had from Q1 '21 through Q1 '22
For revenue most of the bump I expect just because of the price increases from earlier in 2022. I think that we're mostly, if not completely, done with the 2021 price increases but I think the 2022 hikes hadn't hit much at all in Q2. Some of the revenue improvement expectation is coming from selling more Ys and Cybertrucks, and a small portion from FSD and insurance. There is substantial upside if demand growth continues to outpace supply growth and especially if FSD has amazing breakthroughs that tangibly improve the value proposition.
The car buying market still has immense potential demand waiting latent due to mere ignorance and lack of awareness about EVs and Teslas. Occasionally, exogenous events can trigger sudden, rapid social changes based on learning and sharing ideas. I think we already started to see this learning effect and consumer mindset shift in 2022 with fuel prices and the war, but the Vegas Loop isn't even scaled up yet and Cybertrucks still aren't shipping. For another example, see the steep decline in American religiosity immediately following the advent of mainstream internet usage and then again following the advent of mainstream social media usage. If even 10% of the population simultaneously changes their minds on wanting to buy Tesla cars, that's enough to overwhelm Tesla's near-term production capacity and drive prices up further. Remember, Las Vegas gets about 42 million visitors per year and a bunch of them are going to ride in Model Ys in the Vegas Loop as it expands in 2023 and 2024.
Only a few decades ago, a Christian identity was so common among Americans that it could almost be taken for granted. As recently as the early 1990s,
www.pewresearch.org
The cost side mainly accounts for temporary impacts in Q2 from Shanghai shutdowns, the war in Ukraine, and new factories entering the low rate initial production phase, which appear to be the main reasons why cost per car jumped up almost $5k QoQ. The cost estimate also now accounts for the US tax credit of $45/kWh for battery manufacturing, which impacts the global cost average by $1.4k per car if the average battery capacity is 80 kWh and 35-40% of Tesla's production is allocated to the USA. I am conservatively not counting any impact from the 10% US tax credit for critical battery minerals. (Last year 33% of Tesla's global production was sold in America but that was without Giga Austin and without the tax benefits incentivizing Tesla to sell American-made vehicles in the domestic market.) So, on cost I'm basically just modeling for a regression to the mean as the dust settles from the mid-2022 craziness, with all the cost improvements combining to cancel out the effect of inflation.
I have more detailed justifications for these projections in my post history.
2023 Volume
2.8M vehicles
0.64 Fre
1.3 Sha
0.45 Ber
0.42 Tex
Fremont made about 136k in Q2 (544k annualized). 650k is the nominal capacity according to the Q2 update deck (100k SX, 550k 3Y), but I don't believe that number any more than I believe ">750,000" for Shanghai and ">250,000" for Berlin and Austin. 640k in 2023 would be moderate growth, projected based on 110k SX and 530k 3Y, with run rates in Q4 '23 slightly exceeding the nominal capacity.
Shanghai is already around 1.1M annualized run rate today, so 1.3M for 2023 isn't much growth compared to past growth. Giga Shanghai could do much better than this, maybe even producing as much as 1.5M in 2023 if they manage 50% growth in run rate from ~1.2M at the beginning of the year to 1.8M by December. I'm also keeping this lower due to the possibility of another government shutdown artificially affecting production.
Berlin and Texas numbers equate to 2023 averages of 8.7k and 8.1k cars per week respectively. They're still supposed to be at 5k per week by the end of this year. Shanghai hit 5k per week in Oct '20 and twelve months later got to 12k per week in Sep '21. Berlin and Austin should go substantially faster than Shanghai did (as Tesla leadership has directly guided), but there's also uncertainty about all the new technology like 4680s and also macroeconomic uncertainty around supply chain and especially the war situation in Europe, so I think it's a fair balance to just project these plants slightly exceeding the speed of Shanghai.
Macros!!! Scary! Fed! Ukraine! Credit Suisse Collapsing! UK Pound Collapsing! Global Recession!
How low can the TSLA P/E ratio realistically get? TSLA now is quite different from TSLA in the 2014-2019 doldrums, because now Tesla has tangible earnings and free cash flow, plus they've demonstrated they can mass-produce cars successfully so there's less execution risk.
Roughly, I think there's a 99.9% probability that TSLA will maintain a current P/E greater than 25, equivalent to a 1/25 = 4% dividend yield. For comparison, right now the S&P 500 is trading at a trailing-twelve-month P/E of 19 and it frequently exceeds 25, like it did last year for example. I think this puts a floor on the TSLA trading range even in a Great Depression 2.0 scenario, and that floor will step up quarter after quarter after quarter as the earnings keep rising.
At today's share price of $243, the P/E based on my Q4 '23 $5.08 earnings estimate would be merely 12. If it were 25 at that time, TSLA would be trading at ~$510. At a more realistic 70 P/E, TSLA would be at $1420. At 100--which TSLA's current P/E was above at this time last year--TSLA would exceed $2000.
Even if my Q4 '23 EPS estimate ends up being 2x too high, such that Tesla actually earns $2.54/share (equal to ~$37B annualized net income) and TSLA has a current P/E of 25 at that time, TSLA would still end up at $254 (5% higher than today), and obviously earnings would still be growing so the share price would quickly increase from there going into '24 and '25 as earnings double and double again.
For comparison, look at the charts below to see how the market treated Microsoft, which hit $39B income in 2019 with much slower growth than Tesla has been showing. The P/E since then has stayed between 25 and 40, and it dragged the share price up with it as earnings kept growing. I want to emphasize how much slower Microsoft's earnings growth was compared to what Tesla is about to do. Microsoft doubled earnings in 3 years for a 25% CAGR. Not even in the same league as Tesla in the next several years.
When the stock is tanking and Elon is poop-posting, I always think, eff it - sell it all and be done. But then @Gigapress makes me realize I would be kicking my past self.
If it’s not about the money, directly or indirectly, what then is the motivation for some investors to get this mad at Elon for trying to find a way out of this horrific war? Do they feel they own him and can determine what opinion he is allowed to express on social media?
Woah... too much way, WAY-OFF TOPIC stuff in this thread (the Ukraine/EM Twitter thing) People who claim all the non-Tesla stuff that EM tweets about are relevant to TSLA are just as bad as any bear making up reasons to diss TSLA. We should be setting an example here and making sure we understand the boundary between relevant-to-TSLA and not relevant. I wish I did not see tweets from Ukrainian military/political staff brought right here in this thread. Can't imagine anything more off-topic. EM is boss of four different companies... one of which has products in Ukraine and it ain't Tesla.
So sure, today was a horrible day for TSLA, but I want to remind everyone that last October, TSLA went from $254 to $403. Can't remember the specifics but I'm guessing there was a lot of anticipation for the ER, and then the ER exceeded expectations. I think the same thing will happen this month. Especially since TSLA is obviously oversold at this point. And the $ figures will be even larger this time around.
If it’s not about the money, directly or indirectly, what then is the motivation for some investors to get this mad at Elon for trying to find a way out of this horrific war? Do they feel they own him and can determine what opinion he is allowed to express on social media?
I don’t agree with Elon on this one. But I think that like any other individual he can have an opinion and express it on Twitter. In this case he is looking, in his way, for a solution to avoid further bloodshed and maybe even nuclear war.
Many are cheering about the territorial gains the Ukrainians are making, from the safety of their homes, but thousands of young people are dying. Many accept that this massive loss of life is part of the deal. Even I do and I’m not proud of it. Elon does not.
Should he just keep that opinion to himself, shut up and stick to memes and jokes because he’s the CEO of a big company? If you’re mad at him, raise your hand if it’s not because it may be costing you money? Anyone? If it’s not about the money, why would you condemn Elon for giving his opinion about an end to this war?
When the stock is tanking and Elon is poop-posting, I always think, eff it - sell it all and be done. But then @Gigapress makes me realize I would be kicking my past self.
