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

[ZachF]

I dont expect that US consumers will be that warm to Chinese automakers for a good while.

The free world’s capacity to sit back and let bellicose fascist dictatorships like Russia and China make money off their markets is declining at a breathtaking pace.

 

[Max Plaid]

If it goes any lower than this I may even start using some margin to buy short term TSLA. This is ridiculously low and the SP is nearly guaranteed to go up from here over the next half year, even if the macros continue to suck and the world goes into a possible recession. I still think we'll stay below the ATH of $415 for a year or more, but dangit a gain from $230 to ~$400 per share would be a nice gain for a short term fun account!

Sorry, need to pull you up here, but TSLA is not guaranteed to go up, down or sideways over any give time-frame, never mind a short one like that. Could be that Tesla execute perfectly, but if the macros go down the shitter then TSLA will go with it

 

[PeterJA]

My expectation is that by the time Tesla FSD is at level 4 and accepted for sale by the regulators in EU and China then other systems will either be fast closing in on level 4 or also have achieved it. I expect they wil do it the same way Tesla is, i.e. vision + neural nets + supercomputers + large scale data acquisition from large fleets.

Again thanks. There is another possibility for other automakers besides building their own Dojos and millions of data-collecting cars: license the technology from Tesla. I imagine they could market "Tesla Autopilot Inside" (similar to "Intel Inside" for PCs) a lot quicker and cheaper than attempting to duplicate Tesla's FSD development program. And this would earn more profit for Tesla, not less, and keep Tesla cars selling to people who want the technology leader.

 

[bkp_duke]

If this 11,000 order number is true (and order numbers are sequential), there is going to be quite a backlog.
View attachment 861154

11,000 . . . wowsers. That's amazing!

 

[PeterJA]

Good thing Tesla didn't also get an investment grade rating from Moody's, or we might be down 12%.

 

[KBF]

Just put in an order for more TSLA - thanks to Elon for the stupid Twitter fiasco/having to sell, and Biden for his ill-advised nuclear comments, and whatever else is pushing prices down. I happened to have a bit of spare charge in my investment accounts and the time seems right (profit off of others' anxiety doesn't seem fair, but I'm not the one FUD'ing all over the place - and interest rates are still not high enough to make GIC's a better long term investment due to taxation).

And as someone else said - if we have a nuclear war, money becomes worthless quickly. It's why I wasn't worried about starting my investment journey in 2008/9 - the markets were crashing, and people were predicting as end to the financial sector if things would be allowed to fail, and so I figured either my savings would be useless anyway, or all the quality companies would recover... Suffice to say, my portfolio did very well.

My son is hoping TSLA SP stays low for another week - he's turning 18 and wants his own...

I'll be gifting a handful of my original shares to each child when they turn 18 anyway (because it's only $3-4 from my end... And I've maxed out on my lifetime capital gains exemptions a long time ago...)

 

[StealthP3D]

So your suggestion is firstly re volume that ChinaCo will only eat into the residual ICE market faster and not impede Tesla growth at all. So no-one who would have bought a Tesla is tempted away to ChinaCo, or at least to the extent that any are tempted away there is an equal and opposite counterflow. And secondly re pricing power that Tesla's growth (which is currently top-end downwards) is not adversely affected in pricing power terms by ChinaCo product pricing. Because if it were to be affected then Tesla would have to reduce price (and GM%) to maintain volume.

It's a given that Tesla will reduce prices to grow volume and that's true even without any other competition. Because the size of Tesla's addressable market will grow rapidly as the price goes down. I have NEVER said that other manufacturers will not lower margins compared to what they would be without other competing products, rather I was countering your notion that Tesla sales volume would be limited early in the game from this new competition out of China. As long as Tesla can profitably sell every car they make (somewhere) and they don't slow down production expansion, this 'competition' will not limit Tesla's sales. They can only sell as many as they can make. Telsa's strong pricing power, and the competitions low to negative margins, suggest that will not be the case. Of course, they could suddenly become as efficient as Tesla but I don't see a mechanism for that to happen.

I'm sorry if I don't see it how you see it and all the graphs and charts of what you project will happen cannot sway me that the charts reflect reality. Because we have a fundamentally different understanding of how markets work.

If ChinaCo were only producing low-end vehicles without any premium aspirations then you'd be very convincing and I'd definitely admit I have missed something. But looking at that ChinaCo information, it seems to me those 3/Y segment ChinaCo competition are definitely not low end. I might not like their aesthetic (though I like it a lot more than some of the frugly stuff that ICE-land are pumping out) but it doesn't seem pitched at the low end. So either Tesla has a unmatched secret weapon ( ?FSD ? ) or there will likely be direct competition for Tesla sales and/or pricing. Perhaps 90% of ChinaCo will go to new converts and perhaps 10% will steal natural Tesla buyers. Or maybe it will be 50/50. Hmmmm .....

Just one concrete example explaining my position:

There is no doubt some Ford Mach-e buyers would have bought a Tesla if not for the Mach-e. And yet the Mach-e did not cause Tesla to sell even one less car during this period than they would have if the Mach-e never existed. Because other buyers that also wanted a Tesla stepped up to the plate. The Mach-e sold in low volumes, but the principle remains the same. At best, the Mach-e could have impacted Tesla's gross margins but, alas, it was no match for the Model Y and Tesla raised the prices as the Mach-e ramped production and deliveries.

I guess we will have to watch the data very closely over the next few years for any signs of which of us is more right, and to what extent this impinges on either GM% or volume growth rate, or both. I'd also hazard a guess that China will keep the playing field optimised for their home team by not permitting country-wide autonomy until at least one non-Tesla offering is available in the market - no-one said this was a fair game.

In the meantime I'll run the scenario at the weekend to get some insight into how material an effect it might be for a shareholder. That info helps understand how important it is or is not to scrutinise the ChinaCo data.

I'll suggest you might do better to spend your time trying to figure out how the "competition" is going to make EV's as cost effectively as Tesla. Don't look at their MSRP's which may be desperately low to get their feet in the market, look at their gross margins. Also remember, we are likely on the verge of high production of 4680 cells. Another factor of cost to produce is something I've been hammering on for years. That is how small gains in vehicle efficiency combine so that a vehicle can be manufactured for less than a comparable vehicle. Chinese EV's still do not match the thermal efficiency of Tesla when comparing apples to apples. All of this puts them at a disadvantage in terms of how much it costs them to build a car of given specs. I have no reason to believe Tesla will stop innovating new ways to make a better vehicle for less money (things like the giga-castings). And that's the beauty of capitalism and why the Model T was a runaway success. It could sell profitably for a much lower price than anything the competitors could offer. This matters increasingly more as EV's go down-market but is also important, to a lesser degree, in the luxury segment.

The Chinese pay a premium for goods made by non-Chinese companies (as does most of the rest of the world), so Tesla has the edge there too. All of this adds up to the fact that Tesla will be very stiff competition, even for the best Chinese companies. Unless they surpass Tesla in cost to produce, and have a reliable, very low-cost supply of batteries, Tesla will always be able to undercut their prices so they can sell every car they can produce (at a profit).

 

[elasalle]

Nov 25 300 lotto plays for $2 …

 

[Ogre]

Nov 25 300 lotto plays for $2 …

Yeah… I already own some. I didn’t pay $2 though.

 

[Dutchie]

I have a small position in a weed company. It least that is green. May try their product this weekend - hope it helps to forget the past couple of days.

 

[ZachF]

I have a small position in a weed company. It least that is green. May try their product this weekend - hope it helps to forget the past couple of days.

…Is it actually green or are you making a pun?

 

[ZachF]

Brent crude is back over €100/barrel

 

[wipster]

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.

Just what do you think they have been working on for the past two years at a minimum? Production is starting and as with any new production efforts they'll probably run into some snags. But they're waaay past the days of model 3 early production and have learned a huge amount in the interim. I predict a relatively quick rollout with very few problems personally, but what do I know? I'm just a mere retail investor, not a fracking analyst (anal, ha!) or super smart hedge fund manager.

 

[2daMoon]

…Is it actually green or are you making a pun?

... or both?

 

[Hock1]

I agree with this, but for me personally:

1) I have over a year's worth of funds in my credit union and I'm debt free with meager bills, so I'm not concerned with needing cash in a pinch
2) If I'd use margin I'd keep it a low percentage of my margin allowance. I'd never take on a margin upkeep I couldn't easily afford or pay off if need be.

I stay fairly risk free for the most part, I like sleeping peacefully at night. That said, my "fun" account is the one I could lose completely and it wouldn't hurt me financially at all. So I do take minor risks in it now and then.

I don't think anyone with a "fun" account, is having fun now. "Fun accounts", options and margin are the best vehicles to accelerate one's education of how not to "invest". Good luck.

 

[MartinAustin]

Mr. Bull here... Tesla has an enormous earnings report due in 12 calendar days. Moody's will probably alter their rating after that. I'm expecting TSLA to do much better after that. Wouldn't be surprised if it rallies next week off of this oversold position.

I don't think they will give out too much Cybertruck information until January - like, perhaps alongside the Q4 ER/CC. I think the Q3 & Q4 earnings reports will be left to do the heavy lifting until after that. Then there will be a barrage of Cybertruck news in the media as Tesla turns on access to ordering, configuration, and other details.

Don't forget, they can't build any "final production" Cybertrucks until the IDRA9000 thing is installed and operational. Everything prior to that is a prototype of some sort that can't & won't demonstrate the truck's full capabilities - for example, performance under load and so on. (by "performance" I don't mean 0-60... I mean how much does the body creak and/or twist on uneven ground while carrying max payload, towing, and so on) I think EM will be giddy to tweet about the Cybertruck's first final production example(s).

 

[wipster]

I feel Gary is probably thinking share buybacks from Tesla themselves. Gary has been pushing for this for some time now, and Elon has stated he's open to the notion of it.

Really? When has Elon stated he's open to it?

 

[woodisgood]

Really? When has Elon stated he's open to it?

He said he’s open to it down the road. It was on one of the recent calls/events, either Q2 ER or this summer’s shareholder’s meeting.

 

[The Accountant]

Really? When has Elon stated he's open to it?

See time stamp = 37:15

 

[Krugerrand]

With so much conversation around demand issues, I'd have expected @Krugerrand to be buying so many shares that the market finds a bottom here. Not sure why that's not happening.

I’m counting, keeping a running total. When the time comes that people stop talking about it, that is when I’ll buy the whole lot of shares.