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

[Thekiwi]

TWTR overhang not going away for a long time IMHO. Just a different kind of TWTR overhang.

I am curious about how Elon is going to deal with his Twitter free speech ambitions and the Chinese government, which has a huge stick to wield over Tesla if it wants.

If it becomes a choice between Chinese government “requests” to moderate something on Twitter Vs. Facing disruptions to GigaShanghai, which does Elon hold most dear: Free Speech on Twitter or Tesla operations in China?

In my opinion that is the single biggest new risk Elons ownership of Twitter brings to Tesla (And a good reason for him to get rid of it as soon as practical, be it as a merger or re-float)

 

[wipster]

Yes - I gave my chart to someone on Twitter who posted it.
btw - I am now on Twitter trying to fight the good fight. My account is CPAinNYC

I'm following you my friend!

 

[H Mak]

People here love to post about how obvious past events were. Some people do it pretty much every day, and provide endless charts to demonstrate how obvious it is. Of course if they attempt any actual predictions, they're wrong. Well, not wrong all the time, just the amount that you would expect from random guesses.

It's uncanny!

Its the old stock market adage: no one know what's going to happen, but afterwards everyone can explain it

 

[M|S|M MYP]

I'm following you my friend!

Ditto!

 

[MC3OZ]

I am curious about how Elon is going to deal with his Twitter free speech ambitions and the Chinese government, which has a huge stick to wield over Tesla if it wants.

If it becomes a choice between Chinese government “requests” to moderate something on Twitter Vs. Facing disruptions to GigaShanghai, which does Elon hold most dear: Free Speech on Twitter or Tesla operations in China?

In my opinion that is the single biggest new risk Elons ownership of Twitter brings to Tesla.

Is uncensored Twitter allowed in China?

I doubt that China wants the current version of Twitter uncensored.

IMO the most likely outcome is the Chinese ban Twitter, or produce a censored version of it, with them doing the censoring.

Approved Chinese Twitter posts could still be exported to the uncensored version of Twitter.

I will be surprised of this is an issue, the Chinese need to actively censor or ban most of western media and social media.

 

[space_s3x]

What AI Day sounded like before @jimmy_d ‘s explanations on @DaveT ’s channel

 

[RMan]

Ditto

 

[insaneoctane]

Headline by AP:

"11 more crash deaths are linked to automated-driving systems"
10 of the deaths involved vehicles made by Tesla

I'm amazed how by not having the "other" side of this discussion it sounds really bad on the surface ...but:
How many fatalities or accidents would Tesla have if autopilot wasn't being used?
How many accidents / fatalities does Tesla have per mile vs other mfg?

 

[Knightshade]

Is uncensored Twitter allowed in China?

I doubt that China wants the current version of Twitter uncensored.

IMO the most likely outcome is the Chinese ban Twitter

Twitter is already banned in China and has been for some time (handful of other countries too)


I read their question as what if the chinese government wants some criticism of them removed from rest-of-the-worlds twitter though.

 

[Gigapress]

With the exception of Higher Quality, all of these areas feed into lower COGs and improved margins.

Great post except there's more to quality than most people realize. As a quality engineer I can tell you quality actually affects COGS, margins and production rates profoundly. Most of Production Hell was caused by quality problems; that is, production processes making output that deviated from nominal engineering requirements. It's not uncommon for companies to have like 20-30% of their cost structure actually being cost of poor quality. The challenge of making good quality product is one of the biggest reasons why manufacturing is hard.

Typically in quality engineering we break down cost of poor quality into four categories:

1. Appraisal
2. Internal failures
3. External failures
4. Prevention

What is Cost of Quality (COQ)? | ASQ

Cost of Quality is a method that allows organizations to determine the costs associated with producing and maintaining quality products. Learn more at ASQ.org.

asq.org

Here's a pretty good version of the Juran "quality iceberg" diagram encapsulating some the most common manifestations of these costs:

(source)

Maniacal focus on quality was one of the biggest reasons Japan came roaring back after being in ruins in 1945 to become the world's second most productive economy by the 1990s. Deming and Juran came over to help them out with that and they listened. This quality focus also was the main reason Toyota Motor Corp took over the auto industry during those decades and garnered the best margins in the business. I wrote about this a few weeks ago in an essay about Toyota: #202.

When stuff goes right on the first try and parts fit together cleanly, you make more product faster, with higher utility for the customer and lower COGS.

 

[wipster]

Awesome - thanks for doing this.

Damn, this is a heck of a complement, especially with all the so-called analysts on Twitter!

 

[wipster]

Headline by AP:

"11 more crash deaths are linked to automated-driving systems"
10 of the deaths involved vehicles made by Tesla

I'm amazed how by not having the "other" side of this discussion it sounds really bad on the surface ...but:
How many fatalities or accidents would Tesla have if autopilot wasn't being used?
How many accidents / fatalities does Tesla have per mile vs other mfg?

This is just how accurate many of these "fatalities" blamed on Tesla are. A motorcyclist in Florida died when he was thrown from his bike. Then a Tesla in Autopilot hit the motorcycle... the cyclist was already dead and the Tesla never touched him. Yet Autopilot was blamed for his death.

Many if not most of these accusations are pure FUD...

 

[Singuy]

So far the wave is still on from giga shanghai. Little deliveries out of EU and China. China only hitting 1.4k deliveries the past week. Everything produced are all on ships this month. Like I said the unwinding the wave has nothing to do with shanghai.

 

[Bet TSLA]

Headline by AP:

"11 more crash deaths are linked to automated-driving systems"
10 of the deaths involved vehicles made by Tesla

I'm amazed how by not having the "other" side of this discussion it sounds really bad on the surface ...but:
How many fatalities or accidents would Tesla have if autopilot wasn't being used?
How many accidents / fatalities does Tesla have per mile vs other mfg?

Yeah, same old same old. Buried down in the middle: "Tesla’s crash number may appear elevated because it uses telematics to monitor its vehicles and obtain real-time crash reports. Other automakers lack such capability, so their crash reports may emerge more slowly or may not be reported at all, NHTSA has said."

 

[Tommy O]

I am curious about how Elon is going to deal with his Twitter free speech ambitions and the Chinese government, which has a huge stick to wield over Tesla if it wants.

If it becomes a choice between Chinese government “requests” to moderate something on Twitter Vs. Facing disruptions to GigaShanghai, which does Elon hold most dear: Free Speech on Twitter or Tesla operations in China?

In my opinion that is the single biggest new risk Elons ownership of Twitter brings to Tesla (And a good reason for him to get rid of it as soon as practical, be it as a merger or re-float)

That's not how they're thinking. Could it conceivably happen? Sure. But Star Link is a great example. China's government does not want Star Link to be activated over Chinese territory. Reportedly, SpaceX/Elon have agreed to not activate it there. China wanted data collected in country by Tesla to remain in country. Tesla/Elon agreed to house the data in China and are now doing so.

Twitter is already banned in China and has been for some time (handful of other countries too)


I read their question as what if the chinese government wants some criticism of them removed from rest-of-the-worlds twitter though.

See above. China wants their laws and wishes to apply within their country. Would they like to use their influence over others? Sure. But they're rarely so overt and forceful as to think to do this wrt Twitter. Heck, have you seen Chen WeiHua's account on Twitter? They ALREADY are allowed to say lots of pretty wild things. And plenty of other Chinese state media accounts run wild on Twitter, and have been for years.

 

[Artful Dodger]

Some put holders seeing a rising stock price, and their gains slipping away will close out positions, leading to shares sold short being bought back, this should further accelerate a move upwards.

Options Market Makers have 3 days to deliver any shares due whenever a trade creates that need (2 days for shares, 3 days for options). So that's Monday after the Close for Options settlement. Before that, most brokers will require that you have appropriate margin in place.

So MMs can weather a big storm w/o delta hedging the appropriate amount indicated by any big move in the SP. Then as long as they are able to pounce within 3 days, they can cover at a profit even when the SP spikes. Plus, they have the safety blanket of not needing to report any Fails-to-Deliver (FTDs) for about 13 days. And there's no penalty if they don't.

TL;dr Expect shenanigans until Retail is hosed, and hedgies have repositioned themselves. IMO, that's why buying options that expire 2 days after Earnings is a boondoggle.

 

[Thekiwi]

Is uncensored Twitter allowed in China?

I doubt that China wants the current version of Twitter uncensored.

IMO the most likely outcome is the Chinese ban Twitter, or produce a censored version of it, with them doing the censoring.

Approved Chinese Twitter posts could still be exported to the uncensored version of Twitter.

I will be surprised of this is an issue, the Chinese need to actively censor or ban most of western media and social media.

No western social media in China as I understand it.

I was referring to China making requests of Elon to moderate content on twitter globally to suit its agenda, with the unspoken threat of disruption to GigaShanghai as a consequence of Elon rejecting their requests.

See Tik Tok as an example of how the Chinese government wants to exert influence over social media apps.

 

[StealthP3D]

The starting point is to recognise why Tesla margins are currently higher:-

• Tesla has brand appeal - people will pay a premium (Supercharging helps, but not as a permanent moat.)
• Customers will pay a premium for EVs - lower fuel and maintenance costs help offset some of the premium.
• Tesla is an efficient manufacturer.
• Tesla is vertically integrated
• Tesla doesn't have dealers.
• legacy ICE auto (and dealers) make some money on service and parts allowing lower sales prices.

And you forgot one of the biggest contributors to Tesla's superior margins, they don't spend billions on slick ads to try to convince you to buy their cars instead of the competitors. I've seen estimates that legacy auto, combined with their dealerships, average around $1500-$1800 per car in direct advertising expenses. Legacy auto even pays their dealerships to advertise out of an advertising "slush fund"!

One of my earliest memories from around age eight was wondering why companies had to spend so much money on advertising. My thoughts were that people would learn from family, friends, neighbors and co-workers which products offered the most value, the most durability and the most functionality for the dollar. Wasn't advertising just forcing their customers to pay for something they didn't want or need?

And, indeed, Elon believes the product should be so good it sells itself. Is there a better way to spend $1500-$1800 to make the car better? Why make your best customers pay more for something they don't even want? How about the manufacturer equip the car with premium tires? That's gonna cost them a couple hundred more, check. Let's use the best brakes, that's another $150, check! Let's put some light and strong wheels on there for $200 more bucks, not make the customer pay $500 more just to avoid junk wheels, check!

OK, now we've spent $550 to make the car safer and better, how should we spend the remaining $950-$1250? We could spend the remaining money on ads so people know how good our cars are. Or, we could just knock it off the MSRP. It seems like potential customers might like that. What? We have too many potential customers? OK, we will just keep it as extra profit for a job well done!

Buying heavily advertised legacy cars makes you a sucker when there is a real alternative.

 

[Tommy O]

No western social media in China as I understand it.

I was referring to China making requests of Elon to moderate content on twitter globally to suit its agenda, with the unspoken threat of disruption to GigaShanghai as a consequence of Elon rejecting their requests.

See Tik Tok as an example of how the Chinese government wants to exert influence over social media apps.

It's a reasonable concern to have if you're not familiar with China. Am I saying it's impossible? No. I just think it's very unlikely.

 

[EL0NTRK]

What's with the AH stock price on TSLA? Up $4 and change.