On Twitter folks in China say the backlog is back to 4-6 weeks. At the end of the quarter, it will be shorter again - like always. China demand "problem" appears to be FUD designed to drive down the SP.My view of Tesla's price action is that Twitter has very little to do with it. The primary concerns are growth and margins and I don't see how the Twitter deal really influences those metrics. We're talking about the last 10 days or so spanning from right before P&D numbers to now. Elon's already sold enough stock to cover the purchase of Twitter and I doubt anyone is front running more sales from Elon.
I believe 90% of the price action is due to China demand concerns. China is a big market for Tesla and China's backlog has cratered. The implications are that growth in China will only come with margin contraction. The dollars strength makes it incredible hard for Tesla to further reduce prices in China. As is, Tesla is getting 10% less per car than earlier this year due to the USD strength. I believe Tesla will pivot to exporting from China as the primary strategy and letting China sales slightly declined. Without China in the mix as part of the growth engine, can Tesla continue to grow 50% per year? That is why we saw the 20% haircut in one week in the stock price. Currently the backlog around the world sans China is strong. Tesla will try to maintain margin if at all possible. The U.S. EV credit also makes it unlikely that Tesla will give up margins in the near term.
I am an all in never sold stock holder since early 2020 and I bought materially more every day this week. This is because I believe Tesla price will recover in the mid to long term based primarily on faith that Tesla will deliver FSD. If not at the end of this year, by summer of 2023. As Elon said, Tesla is worth essential zero without FSD (an exaggeration with some truth to it) . My belief could turn out to be disastrous for my wealth but I do believe. The big question in FSD is are there problems that can't be solved that will prevent FSD from being used for driving on the road? Can FSD be a game changer in terms of driving experience and safety? The progress so far leads me to believe problems, if not all, are solvable.
I also see ways to overcome the China problem, namely the long rumored model 2. China's car market is a different market. Tesla currently competes with Mercedes, BMW, and lately higher end EVs from Chinese manufacturers. Tesla does not compete with lowered end offering from foreign and Chinese manufacturers. In the U.S., the consumers typically have more wealth and the model 3 competes with mass brands such as Honda and Toyota. In China Tesla is in the luxury car sector. Can Tesla make a profitable lower end car to fit the China market? In 2 to 3 years, I believe we will see a China only Tesla model.
Here are the catalysts that will spur a turnaround.
1) China demand comes back. If this is the case, all problems solved. You'll see the stock shoot up immediately.
2) Q4 exceeds expectations
3) Official Fed pivot to spur growth
4) FSD summer 2023
We do have the overhang of a possible deep recession, an escalation in the war or more oil shocks. It's not an easy time to be a Tesla investor.
Lastly, it will be quite interesting to see if Tesla announces a 5th Giga factory location this year. Either way, it will give us some insight into how Tesla sees the mid term demand.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
On Twitter folks in China say the backlog is back to 4-6 weeks. At the end of the quarter, it will be shorter again - like always. China demand "problem" appears to be FUD designed to drive down the SP.
Well I’m not buying their oil
I was thinking a nice 5 percent rise would be nice for tomorrow. But with the announcement of the semi going into production I’ll call a 12 dollar drop. Remember, you read it here first. /s
I did not understand people saying that TSLA would be dead money for 2 years after the 2020 run up. After reading your post and seeing how TSLA is now immune to any good news but dropping to any tweet related to Twitter or Elon, I am starting to believe TSLA is only where MMs want it for option trading purposes and that’s it
JSML
Member
From what I understand deliveries are 4 to 6 weeks due to Tesla Shanghai exporting the first month of the production as they normally do at the beginning of the quarter. The overall backlog for China sales remain low.
You may be right in the very short term about China, but don't forget in that same time period, Giga Shanghai increased their production by a substantial amount, which reduced the weight time considerably. And while there are a lot more Tesla wannabes over there now, how many possess Tesla's inherent advantages of the supercharger network and more importantly OTA upgrades/recall resolutions? The one issue that's not discussed is recalls among the new players in China (and even more so in the US). Even the established players are going to experience challenges that Tesla has already solved, which contributes to their reputation.
Just my opinion, but I think in the short to mid term, this will move more folks to Tesla, in all of their markets.
I presume the oil/gas lobby is behind this, but I wonder how the OEMs that are actually trying to sell EVs feel about it.
There might be a point to potential problems with the electric cars that have been waterlogged for a substantial period, just not specifically Tesla's. Interesting article:
www.foxnews.com
Also, have heard of many Tesla Powerwalls down there that were submerged for a considerable period that are still working fine, so there's that...
Electric vehicles are exploding from water damage after Hurricane Ian, top Florida official warns
Florida's chief fire marshal warned Thursday that Hurricane Ian waterlogged a number of EVs and their sensitive batteries, creating a serious widespread danger of fires.
www.foxnews.com
Also, have heard of many Tesla Powerwalls down there that were submerged for a considerable period that are still working fine, so there's that...
Mike Smith
Active Member
There might be a point to potential problems with the electric cars that have been waterlogged for a substantial period, just not specifically Tesla's. Interesting article:
Electric vehicles are exploding from water damage after Hurricane Ian, top Florida official warns
Florida's chief fire marshal warned Thursday that Hurricane Ian waterlogged a number of EVs and their sensitive batteries, creating a serious widespread danger of fires.
That's true of any car.
Elon forgot to mention: "They go uphill!"
FSDtester#1
Craves Electrolytes
Funny you mentioned that.. Fox already removed the story from the app.
How did it go from #1 story to buried in a few hours??? The lead stories on the app stay around for a bit and then move down the list after time passes...Not this one...
Curious..
It's still on their website, but you really have to hunt for it...
A naïve investor might think “Wow, this is big. Bet the stock pops tomorrow!"
The Accountant
Active Member
You make some very good points. I do want to add 2 comments that help offset some of the risks you bring up.
1. Currency risk in China is mitigated by establishing a cost structure in China. The strong dollar can reduce sales by say 10% (when translating the Yuan to US$) but costs are also reduced by 10% during translation to US$. So the risk is only at the Gross Margin. A car sold at 50k with a cost of $34k will have currency risk on the $16k of margin. So about $1.6k (if 10%). One can argue that Tesla can find enough cost efficiencies to offset some of this $1.6k (more volume reduces fixed cost per car for example). Also establishing R&D functions in China helps mitigate currency risk as well.
2. When you have a global market, often price cuts in one market (e.g. China) can be offset with price increases in other markets (e.g. US). Most companies have a global pricing department that constantly looks to optimize pricing to balance demand and profits. I could see for example, Tesla taking a price cut in China while increasing the price on the Model Y in the US (as the IRA SUV limit is 80k). Also cost efficiencies in one market can help offset price cuts in another market. Savings in Austin and Berlin with 4680 batteries can help offset price cuts in China as an example.
These 2 points do not erase the risks entirely but Tesla has several actions they can take to address them.
Last edited:
Todd Burch
14-Year Member
IMO, none of this has to do with it. Macros, macros, Elon dumping tons of TSLA on the open market, and macros. Those are the 4 major reasons for Tesla’s performance this year so far. Better days are ahead. I hope. Man I am not really enjoying this decade so far.
I miss the days when credit rating and semi would have been good for 20% up. 
Fox hates EVs. So much for Murdoch Jr helping in that area.
It’s intentional FUD. “Exploding” is used to scare people. The actual article content mentions a few fires.There might be a point to potential problems with the electric cars that have been waterlogged for a substantial period, just not specifically Tesla's. Interesting article:
Electric vehicles are exploding from water damage after Hurricane Ian, top Florida official warns
Florida's chief fire marshal warned Thursday that Hurricane Ian waterlogged a number of EVs and their sensitive batteries, creating a serious widespread danger of fires.
Also, have heard of many Tesla Powerwalls down there that were submerged for a considerable period that are still working fine, so there's that...
Fox hates EVs. So much for Murdoch Jr helping in that area.
Similar threads
- Locked
- Locked
- Locked
