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

[Discoducky]

The thing that really made me wonder was the comments about Musk refusing a lower bid because there were “self serving” strings attached. I think the board and Parag wanted some kind of legal umbrella and Musk told them where to stick their golden parachute.

Also, Elon might just be happy owning the town hall and focus on bot extermination and human authentication due to first principles.

 

[StealthP3D]

The answer is everyone loses in a price war.

It's kind of odd to have such demand issues when EV plates are so much easier to get vs ICE plates.

"Everyone loses in a price war" is true if everyone is on roughly equal footing in terms of cost to produce. In that case, a price war takes everyone to zero profit or below.

But, if one producer has margins of 30% vs. 10% for the rest, then the lowest cost producer wins the price war simply by lowering their margins from 30% to 20%. As we know, Tesla's competitors in China already have to sell their wares for significantly less than Tesla so the comparisons are already not equal. Couple that with a lower cost to produce and the winner is clear. Add onto that fact that Tesla has plenty of under-served markets ripe for shipments of new Tesla in Asia-Pacific countries so they don't have to get in a vicious price war, they can initiate sales in those unserved countries where higher margins may be possible.

It's almost as if Elon has planned Tesla's expansions with an eye toward reducing exposure of future global recessions. I'm thinking a global recession might just be what it takes to wake up the rest of the investment community to Tesla's significant advantages when it comes to cost to produce and what a superior business model Tesla has compared to legacy auto. The rest can try to copy it but that will not work in a similar fashion when Tesla has been focused like a laser on this for the last decade and even sooner. It was a huge undertaking but it's much easier to build a lean, mean fighting machine from scratch than it is to turn an old, tired, overweight and unhealthy one into a competitive one. I just don't see that happening.

 

[GOVA]

Musk FIRES several top Twitter executives in his first power move.
text

 

[StealthP3D]

Are we not entertained?!?!?!

Regardless of what happens tomorrow, next week, next month and next year, you have to admit it’s entertaining as sugar to be an investor in TSLA. Gut wrenching at times, euphoric at times.

I've found investing is so much more rewarding when I refrain from getting too emotionally involved. It's better when I can look at either a devastating piece of news or the kind of news that might make a lot of investors euphoric, and just cock my head and think "hmmm, that's interesting, I wonder what the broader implications are?" Of course, being human, that is not impossible to do it perfectly, without any emotion, but it's good to temper emotions when dealing with investing and not encourage them. Be happy when your son or daughter wins a spelling bee or sad if they experience a devastating loss. Money is just a life tool.

 

[Artful Dodger]

Guidance is a target which is to be met or come close to, and analysts estimates are meant to be close to actual earnings. This is astounding, if continued guidance for amazon is just 8% while tesla is near 50%, since last time i checked 50% growth is about 6x of 8%.

Even the most bullish Wall St. analysts are only giving Tesla credit for 25% CAGR. Then there's "concensus" estimates. Then they habitually ignore their past errors, and the trend in those errors. They are accumulating, and they want to hold the SP down as long as possible. They have being doing this by 'troying' their growth estimates.

 

[y_naught]

I doubt seriously if he is an extrovert. Pretty sure he is an introvert and it kills him having to be out in public, yet he knows as the public face of Tesla and SpaceX, he has to do it. And he does it well. Would love to see his Myers/Briggs score, I would bet that he is an ISTJ(P maybe). A lot of engineers are. Bear in mind that Intravert and Extravert in the M/B world aren't exactly what we normally think they are. It's not perfect, but it's a great tool to know how yourself and other people perceive the world.

Another great reason to watch The Elon Musk Show, especially now that all three episodes are available on YouTube. Really gives insights into the way he thinks without coming to any conclusions. In fact, I recommend that all the members of TMC watch the un-biased series. I think we all would come away with a greater appreciation of the man and what he's accomplished under extreme circumstances.

I don‘t think ISTJ or P, but INTJ, or what David Keirsey calls The Mastermind: Keirsey Temperament Assessment

 

[Singuy]

"Everyone loses in a price war" is true if everyone is on roughly equal footing in terms of cost to produce. In that case, a price war takes everyone to zero profit or below.

But, if one producer has margins of 30% vs. 10% for the rest, then the lowest cost producer wins the price war simply by lowering their margins from 30% to 20%. As we know, Tesla's competitors in China already have to sell their wares for significantly less than Tesla so the comparisons are already not equal. Couple that with a lower cost to produce and the winner is clear. Add onto that fact that Tesla has plenty of under-served markets ripe for shipments of new Tesla in Asia-Pacific countries so they don't have to get in a vicious price war, they can initiate sales in those unserved countries where higher margins may be possible.

It's almost as if Elon has planned Tesla's expansions with an eye toward reducing exposure of future global recessions. I'm thinking a global recession might just be what it takes to wake up the rest of the investment community to Tesla's significant advantages when it comes to cost to produce and what a superior business model Tesla has compared to legacy auto. The rest can try to copy it but that will not work in a similar fashion when Tesla has been focused like a laser on this for the last decade and even sooner. It was a huge undertaking but it's much easier to build a lean, mean fighting machine from scratch than it is to turn an old, tired, overweight and unhealthy one into a competitive one. I just don't see that happening.

Teslas in China like apple has a branding power over something like BYD where their cars are priced much lower. Your argument only works if BYD cars are priced the same but has a lower margin, the thing it's priced lower hence the lower margin. Production cost most likely gives Tesla the advantage but not like a 20% margin advantage but something in the single digits most likely.

 

[Phobi]

Lot of "legacy" thinking, and thoughts on Toyota, GM, and Ford positioning. Also, I think it's safe to say John is sipping the Tesla kool-aid now (outside of styling)

 

[wipster]

I don‘t think ISTJ or P, but INTJ, or what David Keirsey calls The Mastermind: Keirsey Temperament Assessment

Could be. Engineers are mainly sensing though, gotta feel it, touch it, smell it to believe it. However, Elon is very intuitive as well... maybe he's on the line between the two. I myself am an ENTJ as are a lot of leaders (was one at one point in time), but always had a hard time with the SW engineers because of that characteristic. That's why I would love to know his score, if he ever took the test/exam.

 

[RobDickinson]

https://twitter.com/x/status/1585841080431321088

 

[Artful Dodger]

Now would be a good time, as Elon could spend some time at Twitter, letting his #2 take the lead (at least publicly) for what is sure to be an “epic” quarter.

Now is not a good time since Elon still has one tranche remaining to vest from his 2018 CEO compensation plan. Elon must remain either CEO or Executive Chairman + Chief Product Architect for that tranche to vest. Paging @mongo

Do you think he wants to Chair the Board again, or is Robyn Denholm doing a good job? No matter, after the 2022 10-K drops in late January, Elon's last tranche will have vested, and he's free to move on from the CEO duties. I personally hope for and expect the new CEO will be current CFO Zachary Kirkhorn.

 

[StealthP3D]

Teslas in China like apple has a branding power over something like BYD where their cars are priced much lower. Your argument only works if BYD cars are priced the same but has a lower margin, the thing it's priced lower hence the lower margin. Production cost most likely gives Tesla the advantage but not like a 20% margin advantage but something in the single digits most likely.

I'm pretty sure the margin difference is greater than single digits. Remember, GigaShanghai is Tesla's most profitable factory, by far. I just don't see a price war as being a realistic expectation. I've seen nothing to indicate that's where this is heading. And I mean nothing.

 

[Singuy]

I'm pretty sure the margin difference is greater than single digits. Remember, GigaShanghai is Tesla's most profitable factory, by far. I just don't see a price war as being a realistic expectation. I've seen nothing to indicate that's where this is heading. And I mean nothing.

BYD's gm is 14.39%. Tesla's cars are between 10-20% higher priced than BYD cars of the same configuration. For example, the BYD Han AWD performance has a 0-60 of 3.9 seconds which is similar to a M3 performance. It cost 279k RMB while the M3P cost 349k RMB(this is after the price cut). It's not hard to imagine if Tesla start pricing the M3P at 279k, the margins end up being single digits higher than BYD at most. So this price reduction margin theory only works best against non-chinese made cars.

 

[printf42]

BYD's gm is 14.39%. Tesla's cars are between 10-20% higher priced than BYD cars of the same configuration. For example, the BYD Han AWD performance has a 0-60 of 3.9 seconds which is similar to a M3 performance. It cost 279k RMB while the M3P cost 349k RMB(this is after the price cut). It's not hard to imagine if Tesla start pricing the M3P at 279k, the margins end up being single digits higher than BYD at most. So this price reduction margin theory only works best against non-chinese made cars.

No you can not say they are comparable just because they have same 0-60, or same size, or same weight.

Many low cost cars are nice skin covering crappy chassis fitted with the cheapest suspension system possible. Safe enough to barely get a five star rating but not a tiny bit more.

Not saying all Chinese cars are like that, but some are.

IIRC Elon had once laughed about the competition someone mentioned, and asked back, ”have you driven the car?”

 

[StealthP3D]

BYD's gm is 14.39%. Tesla's cars are between 10-20% higher priced than BYD cars of the same configuration. For example, the BYD Han AWD performance has a 0-60 of 3.9 seconds which is similar to a M3 performance. It cost 279k RMB while the M3P cost 349k RMB(this is after the price cut). It's not hard to imagine if Tesla start pricing the M3P at 279k, the margins end up being single digits higher than BYD at most. So this price reduction margin theory only works best against non-chinese made cars.

You don't know what the margin of BYD'ss Han AWD is and you can't use the companies overall GM because it's such a small percentage of the total. There is a reason they price it so much lower than a comparable Tesla, because that's all they can get for it.

I don't want to argue this endlessly because I think the idea that there's going to be some huge price war ridiculous. Competition is good, Tesla will still have good profit margins.

 

[StealthP3D]

Now is not a good time since Elon still has one tranche remaining to vest from his 2018 CEO compensation plan. Elon must remain either CEO or Executive Chairman + Chief Product Architect for that tranche to vest. Paging @mongo

Do you think he wants to Chair the Board again, or is Robyn Denholm doing a good job? No matter, after the 2022 10-K drops in late January, Elon's last tranche will have vested, and he's free to move on from the CEO duties. I personally hope for and expect the new CEO will be current CFO Zachary Kirkhorn.

I'll hope and predict that Elon remains Tesla's CEO far beyond 2023, as long as he is useful. That's his stated plan and I don't see how Twitter changes that.

 

[StealthP3D]

Lot of "legacy" thinking, and thoughts on Toyota, GM, and Ford positioning. Also, I think it's safe to say John is sipping the Tesla kool-aid now (outside of styling)

Wow! It's eye-opening to see how much these guys don't understand about the auto business (and they have been immersed in it their entire lives!). I'm not a huge fan of McElroy but the rest of them make him look like a real visionary in contrast to their ignorance and prejudiced view of things. And McElroy used to be just like them when it came to Tesla, he would just snicker. Why did he change? Simple - he learned more about Tesla from real sources instead of basing everything off the auto industry news feeds. The rest could take a lesson from him.

 

[printf42]

I learned something new from Elon Musk Show:

Spoiler: Link here.

episode 3 starting 20:30

Elon’s father had owned many of the most iconic cars in automotive history, and Elon had been wrenching on them when he lived with him.

The dialogue only mentioned brand not models, but picture showed ones like Porsche 156, Benz SL, Ferrari 250...

I only knew Elon had a McLaren F1 after sold PayPal, but never knew he grew up with that many iconic cars in the garage.

Now I trust Elon more that he knows what he’s doing when it comes to anything about cars.

 

[Artful Dodger]

I'll hope and predict that Elon remains Tesla's CEO far beyond 2023, as long as he is useful. That's his stated plan and I don't see how Twitter changes that.

Of that I have no doubt! But I would like to see Elon use his time more productively, and hand off all the boring, tedious and (relatively) low-value work that inevitably falls to the CEO.

Tesla 'bot is a perfect example. Who thinks out of the box like that?! But Elon has steadily built up Tesla so it owns the full stack of technologies needed to design and build the world's first general purpose humanoid robot.

COGS ↓ + EPS ↑ = Game Changed.

TSLA to $4.4T even w/o 'bot? Okay. But TSLA with 'bot? 10x or 100x? I suppose it depends on how much asteroid mining falls to Tesla 'bot. 1,000x is possible, IMO.

Cheers to the Looongs!

 

[insaneoctane]

BYD's gm is 14.39%. Tesla's cars are between 10-20% higher priced than BYD cars of the same configuration. For example, the BYD Han AWD performance has a 0-60 of 3.9 seconds which is similar to a M3 performance. It cost 279k RMB while the M3P cost 349k RMB(this is after the price cut). It's not hard to imagine if Tesla start pricing the M3P at 279k, the margins end up being single digits higher than BYD at most. So this price reduction margin theory only works best against non-chinese made cars.

Don't forget that many of the Chinese competition are state sponsored and won't let the short game (which might even be with losses) dictate the strategic long game.