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

[wipster]

The MM’s psychological operation has certainly been in full effect with their ability to dump TSLA share price through the week below the 3-year trend line. Stay strong @wipster - Today we may see that the most frustrating part of this week’s possible manipulation head fake for those of us that follow the share price by the minute is that if the MM’s simply let TSLA run back up above the 3 year trend line before close of trading today then it will never even look like TSLA traded below the converging wedge of the 1-year and 3-year charts on the longer charts. Thus they may once again have managed to take TSLA as low as they possibly could have before a breakout to the upside on earnings…….allowing them to make an additional 20% or more on the move than the rest of us that simply held the last few weeks, and creating enough fear in the process that they probably managed to gather up a few more bucket loads of shares from the unfortunate at much lower costs before the ride back up.

Certainly not an advice - just another reminder that they have successfully done this many, many times in the past .

Not to worry my friend, HODLer since 2012, TMC member since 2013, still possess original shares with a cost basis of 3.10 and total gain of 7,270%...

Was just using an old axiom to blow off some stream, but my shares aren't going anywhere.

 

[lascavarian]

Tesla fsd software when fully functional,
should help maintain gross margins at levels above 30%.
fsd has sustainable pricing power.

A fsd monthly subscription model , coupled with lower
insurance premiums, should make it even more compelling.

My opinion is that the Semi announcement is highly bullish for FSD.

An eighty thousand pound EV truck under human control is dangerous to the mission IMO. FSD will be needed to assure success.

 

[SOULPEDL]

My opinion is that the Semi announcement is highly bullish for FSD a battery ramp!

FIFY

 

[Paracelsus]

RU effn joking?! Pres. Biden said within the past 24 hrs that the world is now closer to a nuclear exchange than at any time since the Cuban Missile Crisis.

I personally don't think it'll happen if the West keeps its nerve, but that is a FAR CRY from 'nearly guaranteed'.

Just for everyone else, DO NOT gamble any money you think you'll need in the next few years, DON'T use margin, and even consider keeping some cash and clean water at home.

Why in the hell would any leader of the 'free' world say anything like that unless it was to instil mass fear for control, and to help transfer wealth from scared investors to Wall Street. Those kind of comments make me feel not so 'free.' It has been a constant barrage of 'fear' for several years now, from one crisis to the next. And in every instance there were many posts here about people selling into fear and then people regretting it later after things quickly reversed. I myself am guilty for selling some shares into the Covid dip before DC gave WS about $4.2 Trillion at the bottom of the market so it could completely reverse to their benefit in a matter of weeks. Its getting to be a bit like the Dark Ages until the Gutenburg Press was invented and people could be informed through other conduits. Thank goodness for TMC..............it might get frustrating from time to time here, but at least we have input for the moveable-type printing press here, and it has really helped to inform me over the years.

 

[elasalle]

My opinion is that the Semi announcement is highly bullish for FSD.

An eighty thousand pound EV truck under human control is dangerous to the mission IMO. FSD will be needed to assure success.

Disagree, because they are mutually exclusive. FSD had nothing to do with Semi timeline.
Battery supplies .. yes

 

[Todd Burch]

Gary seems fixated on thinking that Elon needs to sell more.

 

[EVDRVN]

My opinion is that the Semi announcement is highly bullish for FSD.

An eighty thousand pound EV truck under human control is dangerous to the mission IMO. FSD will be needed to assure success.

Let me correct that. "An eighty thousand pound EV truck under FSD is dangerous to the mission IMO" No FSD no one to blame but the driver. Giant FUD rigs

 

[elasalle]

got me 2 Jan25 320's leaps for ~ $62. Be greedy(if you can), when the market is fearful. (Sold 55 pigg(CC)y bank shares for this)

It's all about Macro and Fed right now ... all eyes on CPI for next week

 

[MikeC]

Not letting myself get excited, but this is plausible. Some here noted that credit wouldn't change until Tesla actually sought some debt.

https://twitter.com/x/status/1578339803304951809

What is “more aggressive” in the context of shareholder distributions? More money back to shareholders or less?

Given that there are zero distributions now, they can’t be less aggressive by starting to give them out because that would imply that zero is already somewhat aggressive. Nor could they be less aggressive by decreasing distributions since they’re already zero.

For this comment to make sense, I’m reading it as there is some plan to increase shareholder distributions - but if they go overboard, then their rating could drop.

Any other ways to interpret that?

 

[mongo]

CS9000 has completed testing at IDRA. Nice view of the toggle lock system

 

[EVDRVN]

Gary seems fixated on thinking that Elon needs to sell more.

"Reverse Gary" ?

 

[StealthP3D]

Please go and look at the Chinese info I linked to. That info addresses each of your points which is why I don't recite it myself. The data shows the Chinese are building BEV mfg capacity faster than Tesla, no reason to think that is going to change. The data shows that China is bringing products to market that are directly comparable to 3/Y and which are very credible indeed, and being liked by Chinese buyers who historically would only consider BMW/Audi/Mercedes.

So, you are saying, "The competition is coming!"?

Yes, I get it, China can make lots of BEV's too! And these BEV's can eat into the bulk of the market that is legacy ICE. Legacy ICE sales in China are cratering! Tesla sales are growing.

Anyone with investment capital can expand production. But to continue to expand production such that it erodes Tesla's China sales requires them to compete directly with Tesla Shanghai which has the highest gross margins of all of Tesla's factories. Tesla has massive pricing power in China while the manufacturer's you think will erode their sales in the future have NONE! They are selling around break-even. They can out-compete when competing with ICE, but there is no good evidence they can out-compete when it comes to Tesla. And you cannot neglect this most important fact when analyzing how this will play out.

Tesla Shanghai will be able to profitably sell all they can make for years to come. The key metric here is Tesla's pricing power relative to other BEV manufacturers.

 

[lascavarian]

FIFY

Agree as well. Battery supply has various favorable destinations that can build the mission with little risk. FSD mitigates risk with highway applications where mass has an oversized presence as I see it. I think FSD is within months of being mostly amazing and that opens some gates.

 

[juanmedina]

Gary seems fixated on thinking that Elon needs to sell more.

There is now an article about it.

Tesla investors beware: Musk has narrow window to offload more shares to generate cash for Twitter takeover

This deal really needs to get closed.

 

[TN Mtn Man]

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.

It's a brand new vehicle, on a brand new production line. Worse than say ramping up MY in Austin or Berlin, where there is at least a largely proven design (with some new design details) and supply chains. This is all new, and will be low-volume production (relative to MY or M3 anyway). IMO, first vehicles will be sold at a significant loss-just like every other brand new vehicle on a brand new line. But given Tesla's ability to learn and ramp quickly, that IMO will change quickly. Maybe by Q3 03? Would like to be wrong and see positive GM from the first semi, but I don't think that's reasonable, rather it's Tesla or any other manufacturer.

This isn't pessimism or a negative comment, still VERY positive about the future of TSLA. But just a rational look at how any new product rolls out.

 

[larmor]

Gary seems fixated on thinking that Elon needs to sell more.

"Someone wants to buy in at a discount prior to Semi production announcement, continued earnings on lower than expected deliveries, investment grade trigger for funds, and is able to with just a few social media messages and some sideways articles."

 

[thx1139]

Let me correct that. "An eighty thousand pound EV truck under FSD is dangerous to the mission IMO" No FSD no one to blame but the driver. Giant FUD rigs

I think FSD is good way off for the Semi's, but AP on the highway will be life saving.

 

[MikeAtkinson]

Gen 3 is taking longer than expected because the volume of demand for the higher price points of Gen 2 was far stronger than expected and this is straight from Tesla management. So it has nothing to do with raw materials or drivetrain efficiency and is only related to battery production in that it makes sense to put the batteries in more valuable cars as long as there is a large enough market for more valuable cars. This is a good thing and contrary to Moody's wish for more model diversity, makes Tesla financially stronger, not weaker.

I also think when Tesla ran the numbers on the production costs of various designs, they realized the savings realized simply by making it smaller are pretty minimal because costs do not scale with size. Most of the cost is the battery and since even a much smaller car than the Model 3 only has around 10% less drag, the battery still needs to be 90% as big to get the same range (even though the interior space is 30% smaller). Also, both cars need a climate control system (as but one example) and it would cost more to make a slightly smaller system than it would to just use what they have. In other words, scaling things smaller does not save much money since raw materials are such a small part of the cost of a manufactured item. So, you end up with a car that is worth considerably less but only costs a little less to build.

To make a small car substantially cheaper, they have to also cheapen it up, something Musk is loath to do. He believes it's better to innovate new ways to make existing platforms cheaper, and to make more of them. They will eventually make a smaller car, but there is absolutely no pressure to push it out sooner. Making more EV's is the number one priority, not making smaller EV's.



The smaller cars will come in time, but not anytime soon because Tesla is still only 2% of global auto demand, so the point at which it makes sense to enter that market, a market known for very challenging margins, is simply not as close as many people think. It has to make sense when considering all factors. That said, you can be sure Tesla is doing the necessary work, so they are not caught off-guard if market preferences undergo rapid change.

I agree with most of that. There is room for VW Polo (small hatchback) and Golf (medium hatchback) sized cars, mainly for the European and Asian markets where many people want a small car to fit on narrow roads and in tight parking spaces. At the other end there is room for an estate car, something like a Model Y with stretched storage in rear.

Gen 3 will use technology to reduce costs, but will still be premium vehicles with excellent safety, good soundproofing, big display, excellent sound system, etc. A bit lower drag and less weight means a smaller battery for the same range, but not that much smaller. Smaller means less materials cost, but not much, plastic, steel and aluminium are relatively cheap. So I think cost may only be $1000-2000 less for the medium hatchback and $2000-4000 for the small hatchback.

Scale is also important, these small cars are likey to sell very well, perhaps two or three times that of the Model 3. Ecomonies of scale (number of units per year) and learning curve (total number of units made) are such that doubling production may lead to a 10% reduction in unit costs.

If Tesla sold the medium hatchback for $5000 less, and the small hatchback for $10,000 than the Model 3 then sticker price margins would be less. However, services like premium connectivity, FSD and others in the future would be at the same price as the Model 3, so overall margins would still be very high.

Tesla could round out the range with a much cheaper than Model X large SUV and much cheaper than Roadster sports car. Vans are difficult they come in a range of form factors and sizes, same with minibuses which commonly range from 9 to 22 seats.

 

[jw934]

Moody's wrote back in September when they answered why they consider Tesla below investment grade:

"Dear Mrs. Merz, Thank you for reaching out to us. For reference, I copied below our considerations for an upgrade of Tesla (se press release January 24th). The considerations are not so much of a qualitative nature, but more qualitative. Importantly, we are looking for a broadening of the company's product line-up. Today, Tesla remains narrowly reliant on primarily two models, albeit highly successful ones. Note also in this respect that one of the models was first introduced in 2017. More concrete prospects for a broader vehicle line-up would be regarded as a positive development in this respect."

I think the semi for December 1st and any news on the CyberTruck on the Q3 earning call (and of course the S&P upgrade) could convince Moody to reconsider.

 

[phantasms]

Odd sticky price action today. MMs working that 230 put wall or someone accumulating ~228?


edit: my bad. lol