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

[Paracelsus]

if TSLA is trading below a 3yr trend line, it is not b/c of market manipulation, it is b/c of market agreement.

Totally true IMO if you are suggesting that those that can control short term pricing of the market through the many means that @Artful Dodger and others have often shared must come to an agreement to move the price of TSLA @MABMAB -

 

[Artful Dodger]

It would be interesting to know there is a Model 2 into the design room. Not to announce it officially to avoid Osbourning the sales of Model 3 and Model Y in Chinal but at least to know there will be a car available to the masses once the luxury car China sector is filled up

Martin Viecha recently said that Tesla will eventually need a cheaper model. But that's as much as you're going to get from Tesla until product reveal day. I expect we'll get the Giga Shanghai 2 announcement first, maybe in Q4 (or possibly even during the Oct 2022 Conf. Call).

 

[MABMAB]

Totally true IMO if you are suggesting that those that can control short term pricing of the market through the many means that @Artful Dodger and others have often shared must come to an agreement to move the price of TSLA @MABMAB -

Huh?

I do not accept a lot of what passes inspection here.

MMM for example is purely jittery anxious retail orders being exhausted. Common Intra-Day Stock Market Patterns

Trading Near the Bells

What to know about the market’s two most volatile trading hours.

www.schwab.com

yawn

 

[willow_hiller]

The Black-Scholes formula models short-term stock prices as stochastic, defined only by a long-term drift term and volatility. I think that's generally true. In the short term, all movements are just noise against the backdrop of long-term trends.

 

[The Accountant]

For you folks with your fancy financial models....what are you using for semi GM%?

I took a look at PACCAR Inc. financials. They are owners of DAF, Leyland, Kenworth and Peterbilt.
Their financials show GM% at 16.5%. I will double that for Tesla at 34%; however, I won't assume 34% until Q2 or Q3 2024.
I will probably start at -10% in Q4 2022, +5% in Q1 2023, +15% Q2 2023 and so on.
There is not much detailed support for my approach. I use 2 pieces of knowledge: Tesla delivers better margins than ICE and that it takes time to ramp to peak gross margins. I am likely conservative here.
Perhaps @unk45 or members with knowledge of this industry can help shed some light on this business.

 

[cusetownusa]

Here's an article I came across on the '23 Kia EV9. Thought people here might want to see what the competition is up to. (if this belongs on another forum, please delete or move).

First Look Review: 2024 Kia EV9 offers comfort, space, features but at a price

The 2024 Kia EV9 is the first non-luxury pure electric three-row midsize SUV in the U.S. It's scheduled to start arriving at dealerships in late 2023.

topelectricsuv.com

I think this car has the potential to be super popular. We have a telluride and love it and this seems like it will be an electric version of it.

The only competition for a vehicle this size is the R1S ($80,000+) and Model X ($130,000+ for the 6 seater that we would want).

 

[The Accountant]

Martin Viecha recently said that Tesla will eventually need a cheaper model. But that's as much as you're going to get from Tesla until product reveal day. I expect we'll get the Giga Shanghai 2 announcement first, maybe in Q4 (or possibly even during the Oct 2022 Conf. Call).

In a recent interview (within the past 9 months but I can't remember which one), the interviewer asked Elon about a cheaper car and he said something to the effect of, "this is not the time nor the place for new product announcements". That non-denial sounded like a yes to me.

I do think that a cheaper model will be a rare moment for Tesla where deliveries will start within 12 months of reveal; this to avoid the Osborne effect.
I have no evidence of this but it seems to be the logical business approach to take. And I believe they will be sold as cars with a steering wheel for private ownership and then the platform would be used for Robotaxi later.

 

[Nocturnal]

Jobs growth was lower than expected so that's good. (since we live in Bizzaro Fed world now) Unemployment still decreasing though.

Unemployment rate falls to 3.5% in September, payrolls rise by 263,000 as job market stays strong

Nonfarm payrolls in September increased 263,000 for the month, compared to the Dow Jones estimate of 275,000. The unemployment rate was 3.5%.

www.cnbc.com

I think this car has the potential to be super popular. We have a telluride and love it and this seems like it will be an electric version of it.

The only competition for a vehicle this size is the R1S ($80,000+) and Model X ($130,000+ for the 6 seater that we would want).

I'm really skeptical of those MSRPS and range numbers from Kia. Very much agree that it's a gap in the current EV landscape. I have 2 kids and a small dog, my GF has 1 kid and a mini-horse (great dane mix) so the Model Y is very tight when we load up. Might have to upgrade her to an X at some point but the cupboard is a little bare right now and I'll already be buying my quad Cybertruck this summer.

 

[petit_bateau]

Forward Observing

“You Need to know What’s happening in China”

The general takeaway from my reading of that author was; will the consumer be left holding the bag, and, and that is some serious competition.

Seriously, not all startups or legacy automakers will come out alive; thus the consumers will be left with their very own “Pet Rock.”

The only, IMhumbleO, competitor is VW and maybe Ford Riven. .....

Which automakers are household manufacturers when talking to the grandkids about solar storage, solar cells/roof, and reinventing your house from gas primary to electrical, on, and on. GM ~ got tanks? I said, household damn it. Oh yeah, Starlink for their hand held devices.

Everybody that is in partnership with Huawei pretty much fits that bill, which is to say many of the Chinerse auto manufacturers. In may not be under one company mfg/design roof but it is under a lot of pairs of roofs. People in the West are unused to waking up and realising that China is ahead of them, rather than behind them, and it can come as quite a surprise. Quite apart from being one of the leading players in handsets & base stations, Huawei already does solar, battery, car/home infotainment and is pushing towards a full-car-OS with autonomy. Oh, and Huawei are pushing into chip design with paired fab solutions as well.

China is absolutely intent on achieving strategic autonomy from the West.

Homepage - FusionSolar Global

Huawei FusionSolar provides new generation string inverters with smart management technology to create a fully digitalized Smart PV Solution.

solar.huawei.com

Homepage - FusionSolar Global

Huawei FusionSolar provides new generation string inverters with smart management technology to create a fully digitalized Smart PV Solution.

solar.huawei.com

Geely's Geometry adopts Huawei's HarmonyOS for its next car

Huawei might have a chance rivaling Android Auto and Apple's CarPlay in China.

www.arenaev.com

Huawei dives into chip production to battle U.S. clampdown

Telecom equipment maker is partnering with fellow blacklisted companies

asia.nikkei.com

 

[ZsoZso]

Looks like Unemployment rate came in at 3.5% vs expected 3.7% and market went into panic mode.
Another macro down day. TSLA can't catch a break these days...

 

[Stretch2727]

I am wingin' it at 33% in my not so fancy model.

I am not so optimistic on the starting GM for the Semi.

Remember the Semi has a battery that could be 13x size of a Model Y but will be selling for 3-4x the price. Another way to look at it is they could sell 13 Model Y (approx $750K) with the battery capacity in the Semi.

I know not a perfect comparison considering 13 bodies for a Model Y and 1 for the Semi.

If they hit 10% to start it would be a win. The margin will increase a 4680 scales and they make other improvements. The numbers are going to be small to start so the initial margins will have little impact on the overall company.

 

[The Accountant]

I took a look at PACCAR Inc. financials. They are owners of DAF, Leyland, Kenworth and Peterbilt.
Their financials show GM% at 16.5%. I will double that for Tesla at 34%; however, I won't assume 34% until Q2 or Q3 2024.
I will probably start at -10% in Q4 2022, +5% in Q1 2023, +15% Q2 2023 and so on.
There is not much detailed support for my approach. I use 2 pieces of knowledge: Tesla delivers better margins than ICE and that it takes time to ramp to peak gross margins. I am likely conservative here.
Perhaps @unk45 or members with knowledge of this industry can help shed some light on this business.

It's always good to understand the competition.
I have attached PACCAR's investor presentation for anyone interested in looking at it:

https://www.paccar.com/media/3240/2q22-investor-presentation.pdf

 

[UncaNed]

This was outstanding perspective for me. Helps to keep us bulls grounded. I think Tesla has an unassailable COGS lead due to their commitment to constantly and truly innovate their manufacturing. I thought GM and profitably was the ultimate metric...But I didn't consider state sponsored competition, certainly not so many of them! China has often been recognized for their long term thinking and end-goal market strategy, so I'm not sure how deep they're willing to allow their pockets to go while they bankroll competitors to artificially challenge Tesla way beyond what a non state sponsored competitor would possibly survive. The Chinese market will indeed be far more complex than I thought!

How does the analogy to the iPhone and it's competitors in China hold up?

 

[petit_bateau]

Again, how could Chinese carmakers threaten Tesla sales if Tesla has FSD and they don't? Are you aware of any Chinese competitors building a global self-driving AI based on billions of miles of driving data and low-cost cameras? Or does your modeling assume Tesla will not complete FSD in the next 4-5 years?

There are a lot of other ADAS systems out there. Whilst I agree that Tesla has a very compelling position at the moment this is an area where things move quickly. I have not so far included a specific line item for FSD value in my modelling, instead it gets rolled up in auto GM% just the same way that Tesla does in the accounts. For the low-case (i.e. China competition) my expectation is that Tesla's advantage in this area will have no more than a 5-year extra value, hence taking the GM% view I've described.

China is very clear that they will crack this (FSD/etc) as a country and be independent in this area. They know the industrial implications, the economic implications, the social implications, and the military implications. If anything it is more important for them to crack this than for the west to crack this as the Chinese demographics suck. They want a robot botty-wiper for their geriatrics just as much as the Japanese do. They want a factory-droid more than the US does.

In the GSM arena everyone thought China couldn't compete, either in handsets or in base stations. Same in large wind turbines. Same in inverters. Same in solar. Same in high speed trains. Same in machine tools. Now look at them ........ and many other such examples. I only have two clients making > 1-million volt widgetry, and one of them is in China. Don't underestimate them.

55 Top Chinese Autonomous Vehicles Companies and Startups - BestStartup.Asia

This article showcases our top picks for the best Chinese based Autonomous Vehicles companies. These startups and companies are taking a variety of approaches to innovating the Autonomous Vehicles industry, but are all exceptional companies well worth a follow. We tried to pick companies across...

beststartup.asia

China's robotaxis charged ahead in 2021

Autonomous driving startups in China are in an arms race to put passengers in their machine-driven vehicles. Every few weeks, news arrives that another major player has got the greenlight to launch a new pilot program or a small-scale service. These press releases, often dotted with regulatory...

techcrunch.com

Chinese self-driving companies face investor slowdown · TechNode

Qcraft and Cowarobot, two Chinese self-driving car companies, talked to TechNode about the sector's challenges at the BEYOND Expo.

technode.com

China’s autonomous vehicle start-ups keep their eye on the driverless road

Five Chinese start-ups – Auto X, Baidu Apollo, Didi Chuxing, Pony.ai and WeRide – are focused on bringing autonomous vehicle technology to the consumer passenger market

www.scmp.com

 

[Artful Dodger]

In a recent interview (within the past 9 months but I can't remember which one), the interviewer asked Elon about a cheaper car and he said something to the effect of, "this is not the time nor the place for new product announcements".

I think that was at Cyber Rodeo in Austin, TX on Apr 07:

Musk, 50, said last week that Tesla is working on other products that would remain secret. He also said there will be a broader rollout of driver-assistance software that Tesla calls Full Self-Driving. A limited number of customers have been given access to the full beta version for testing.

"I'm not going to spill all the beans right now, but what I can say is we're going to move to truly massive scale," Musk said on a stage inside the Texas factory.

 

[JRP3]

IMO this is the approximate situation:-

• Gen 0 - Original Roadster
• Gen 1 - Model S/X
• Gen 2 - Model 3/Y
• Gen 3 - Chinese designed car and others. (2025?)

You skipped the Cybertruck.

 

[OrthoSurg]

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

Already -4.45 you were not that far.
We have to remember TSLA goes down on bad news, goes down on bad news and goes up on no news.

 

[jw934]

Looks like IDRA pulled their video? It was a 2 minute long vid showing assembly and operation (movement) of a gigapress. I

Idra put the video back on.

 

[MP3Mike]

Remember the Semi has a battery that could be 13x size of a Model Y but will be selling for 3-4x the price. Another way to look at it is they could sell 13 Model Y (approx $750K) with the battery capacity in the Semi.

No, they can't. Because they can't make any additional Model Ys. (They are producing at capacity.)

Remember, they have said that they are no longer battery cell limited, which means they can now make the Semi without reducing Model S3XY production.

 

[Artful Dodger]

Looks like Unemployment rate came in at 3.5% vs expected 3.7% and market went into panic mode.
Another macro down day. TSLA can't catch a break these days...

Ah, so that's why S&P Global upgraded Tesla's credit rating yesterday... /s

Cheers!