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

[Discoducky]

The Nissan Leaf is exactly that. It's a very nice little car. But it's not really competition for Tesla. Tesla is an entirely different category.

It is in the 'discontinued' category actually, great video from Lars.

Nissan Leaf Heads for the Off-Ramp, Will Reportedly Be Phased Out

The Leaf was a pioneering EV when it first arrived more than a decade ago, but it has never been a big seller and is not long for this world.

www.caranddriver.com

 

[unk45]

... It would be the Model 1.26.

Tom Hanks and his Polski Fiat 126p - Secret Classics

Tom Hanks received a Polski Fiat 126p as a gift in 2017. Now he is auctioning the car for charity.

www.secret-classics.com

 

[wipster]

What goes around comes around... albeit a century later...

 

[wipster]

Don't worry! Alaska will not be a target market nor will be the Southwest US.
OTOH, imagine the moderation problems when the sales volume for cars alone passes 5,000,000 per annum! You're up for the challenge; you can always use 'Moderating Bots'.

Methinks you missed his point...

 

[Ogre]

Is it a joke, or is it an aid to company pivot/ economic protection?

Without a government deadline, companies/ stock holders/ leadership can live in their bubble where ICE have a long runway... right until the bottom falls out of their market. At which point it's too late to go EV and the company folds (or goes though a dark period).

Now, there is a clear wall/ cliff/ point where the old model will not work any more. This allows those who were shouted down or ignored the inherited clout to get the changes moving which may save the business.

At an absolute minimum, it sets an earlier deadline for suppliers to transition from investing in new ICE powertrain development.

Ditto for fuel vs electric charging infrastructure...

Pretty sure it’s just plain ignorance of the subject matter.

Legislators who have little idea about the course of the EV industry and who don’t understand that the costs of batteries and manufacturing EVs is dropping fast. So they consult the only people they know who ”understand” it, the auto industry lobbyists.When confronted with a deadline the auto execs likely gave what they considered a comfortable window of time to comply.

I think it is only over the past 6 months that auto execs have started to realize how screwed they really are. Maybe Mary Barra doesn’t, but I suspect even she does at this point.

This whole conversation reminds me of a tweet Martin Viecha replied to recently.

https://twitter.com/x/status/1585720700035219456

The assumption that ICE will be around for more than a few years ahead is pinned on the idea that building and selling ICE vehicles will remain profitable as we convert over to EVs. That’s simply not possible. Consumers will mercilessly drive the cost of ICE vehicles into the toilet. Recently passed EV incentives have only accelerated this by a couple years.

 

[Buckminster]

Presumably a must watch:

 

[Ogre]

I think it is both a joke and not a joke. Literally, at the same time.

It is a joke as the $/kWh cost curve demonstrates (BEVs are simply taking over way faster than 2035) and it is NOT a joke as taxpayers are going to have to bail out legacy ICE if they fail. So putting out this deadline, IMHO, is a way of saying "look, we told you many years ago about this deadline, there is no bailout money waiting for you, you are on your own." There isn't much in this world that will piss me off more than to have to bail out legacy auto who have done everything they could to stop this transition.

So I honestly don't mind if GM and Ford are able to hold on for X or so more years, as by then Tesla (and actual competition) will have enough market share to keep the government from feeling that must bailout legacy ICE.

This exact scenario may play out in Japan much sooner (Nissan is most likely first and then Honda) as automotive manufacturing is a large part of their GDP.

And realize if a major OEM goes bankrupt, their major suppliers will be put into great distress, who are also supplying other major OEMs, thus starting a chain reaction of OEM to supplier to OEM to supplier bankruptcies. Imagine Toyota, Nissan, Honda, Suzuki and Mitsubishi all going bankrupt within a few quarters and its effect on Japan's economy and then the rest of the automotive market?

What does a bail out look like for a company that sells a thing nobody wants?

If there’d been a bailout for Blackberry or Nokia, would it have made a difference?

I hope if there is a bailout it is for the employees and retirement programs, not the companies.

 

[Bouboule]

Created the following poll

Tesla ownership Poll (Car/FSD/energy/stock/reservations)

Quick poll to see what is the overall TMC ownership of Tesla's products

teslamotorsclub.com

 

[Rammstein]

Wondering if Tesla will be able to recognize a large chunk of that deferred revenue if they release FSD beta in the US to everyone that paid for it in Q4? If so how much do you think they will be able to recognize? Will Wall Street expect this or will it come as a surprise?

 

[kbM3]

Blurs? Ha! Tesla bot is ~100x more energy efficient than human labor (solar energy → battery → work vs. 18-yr-old meat eating high schooler).


No, that's courtesy of the I.R.A. provision to announce it's eligibility terms NLT Dec 31, 2022 (law going into effect the following day). You think the Adminstration won't try to slip in some labor-organizing clause? Elon is smart to make them move first.

Actually Optimus looks to be roughly on par with a human of the same size in energy efficiency.

The 2.3 kWh pack (equivalent to ~ 2k cal.) is supposed to be sufficient for a full day’s work.

 

[wipster]

Older article, but it really describes the dilemma that GM's use of the Ultium battery has put them in. Good analysis!

How GM's New Ultium Batteries "Stack Up" Against Tesla

GM created quite a stir a few weeks ago when they revealed details of their upcoming Ultium battery platform, but how does it compare to Tesla.

driveteslacanada.ca

 

[petit_bateau]

I agree that global EV-production capacity to replace current ICEV production will likely not exist by 2029. But that doesn't mean ICEV production will still exist. My crystal ball says ICEV production will end before EVs are produced in the same numbers (roughly 80 million/year).

Two reasons:

1) Demand destruction.
When consumers realize EVs are superior and ICEVs can't hold their value, they will stop buying new ICEVs and wait until they can buy EVs. ICEV sales will continue but they will be used ICEVs, not new. Widespread delays in new-car buying will bankrupt ICEmakers unless, as you say, they get government help to produce hybrids and BEVs. This has already begun.

2) Robotaxis.
If Tesla Network is running by 2029, and one robotaxi can replace 5-10 non-autonomous cars, then many consumers will delay buying a new car, maybe forever. Tesla will be producing nearly 20 million vehicles/year, and will license FSD technology to other EVmakers that contribute to the Network. If robotaxis are not available/suitable in your area yet, you will buy an EV or used ICEV because the ICEmakers will be bankrupt.

Says my crystal ball. We'll see.

There is another reason the legacy ICE manufacturers will go bankrupt.

This is that their businesses cannot withstand much revenue collapse due to the pain inflicted by operating leverage in a shrinking business. If they lose say 10% of turnover from ICE they mostly (all) become loss making enterprises. And they won't get a separate profit stream from BEV manufacture since mostly legacy ICE are making their BEVs at a loss.

So I expect a lot of legacy ICE bankruptcies in the fairly near term, within 5-years. They should all be rated as junk debt imho. That in turn means that bondholders will catch a cold. Inevitably so too will nations and taxpayers as these companies are very large employers and (until now) payers into state tax coffers. It is going to be ugly.

The sheer operating efficiency (frugality) of Tesla is setting the pace in such a way that even a minor price drop by Tesla causes the most effective competitors (i.e. the Chinese BEV manufactuers) to shrink their profit margins towards zero.

So we are looking into a situation where legacy ICE manufacturers run at huge losses and go bust fast. But also where allmost all newco BEV manufacturers struggle to breakeven. And then one newco BEV manufacturer - Tesla - is pretty profitable.

(That is also the Android/Apple/legacy-phone paradigm. Apple makes most of the profit from a fraction of the market. Android makes a small profit from most of the market. And all the legacy handset makers such as Nokia/etc basically went bust as they failed the transition to smartphone.)

People haven't thought through the implications enough imho.

Operating Leverage: What It Is, How It Works, How to Calculate

Operating leverage is a cost-accounting formula that measures the degree to which a firm can increase operating income by increasing revenue.

www.investopedia.com

 

[Rammstein]

What's the problem? It would be the Model 1.26. Or it would be the Model Y/2.38. If I did the math right. Which is unlikely.

Speculation upthread about competition from other car makers selling a smaller, lower-priced EV. No need to speculate. The Nissan Leaf is exactly that. It's a very nice little car. But it's not really competition for Tesla. Tesla is an entirely different category. Now, if Tesla came out with a car that had all the features of the Model 3 but 3/4 the size, I'd trade in for it. The 3 is much bigger than I need or want. But I wouldn't trade it for a Leaf.

Still, there is the possibility that a car maker decides to actually compete with Tesla by making a really good EV. But in a rapidly-expanding market, Tesla should do fine even against increasing competition. If Elon doesn't go bonkers and do something disastrous. Which is a real possibility, given how volatile he is.

I hate these kind of posts cause I like your first part but absolutely hate the second part.

Car maker decides? I think they have tried and so far have failed miserably. A car maker just doesn’t decide to make a competitive car with Tesla

Elon going bonkers? I find him to be very relatable. If you think someone in his place will go bonkers and ruin the company then I hope you aren’t invested in such a company.

Given how volatile he is? You aren’t convincing me he’s volatile. I find he acts as normal humans act. I’m not sure what gives you the right to judge him this way.

 

[Discoducky]

What does a bail out look like for a company that sells a thing nobody wants?

If there’d been a bailout for Blackberry or Nokia, would it have made a difference?

I hope if there is a bailout it is for the employees and retirement programs, not the companies.

This will be unprecedented as it is so big and so critical to US manufacturing and export balance.

Maybe the closest analogous examples would be if Boeing or Intel were to go under, would the government bail them out?

I think so, as AirBus is their only scale competitor and the US would lose commercial airline manufacturing.

Not sure about Intel, as we have AMD, which competes at scale and performance in just about every market as Intel.

Top Aircraft Manufacturing Companies in the U.S. - IndustrySelect®

Discover key facts and statistics on the U.S. aircraft manufacturing sector and explore the industry's largest aircraft companies.

www.industryselect.com

 

[Doit]

Actually Optimus looks to be roughly on par with a human of the same size in energy efficiency.

The 2.3 kWh pack (equivalent to ~ 2k cal.) is supposed to be sufficient for a full day’s work.

It costs many times more energy for humans to have that terminal 2k cal.

 

[PeterJA]

Elon joking around on Twitter, including self-deprecating humor, suggests things are going well with his companies, including the newest one.

https://twitter.com/x/status/1586410852646674432

https://twitter.com/x/status/1586411673056817152

 

[Xepa777]

Presumably a must watch:

Seems like Anrej is #TeamNoSensors and was there for the discussion around removing ultra sensors.

Says that trying to Lidar the world is crazy.

Predicts that other companies will drop radars in the future.

Elon taught him against "fighting entropy" (i.e. process bureuracracy, holding too many meetings).

If you don't have a person with a big hammer (like Elon), everything turns into committees, meetings, and democracy. Entropy. You need someone who's sufficiently smart to cheerlead a culture and bring down the hammer. Then things will "move very fast" hahaha.

Says he can't give a timeline on FSD because it's never been done before (vs. building a bridge), but says he knows which specific FSD problems are solvable. And says from what he saw internally at Tesla they're on track to solve all the problems around FSD right now.

None of the remaining FSD challenges "perturbs" him. They're solvable.

Why did he leave Tesla? When he joined, there were only 2 people doing NN because Tesla used Mobileye. He grew into a respectable team, but now he spends time doing management. He can do management but he doesn't like it. Wants to do more technical things again.

Says he's open to returning to Tesla in the future to lead Optimus. He's very geeked out about Optimus. But at this stage, he built FSD team and it felt autonomous.

 

[wipster]

Seems like Anrej is #TeamNoSensors and was there for the discussion around removing ultra sensors.

Says that trying to Lidar the world is crazy.

Predicts that other companies will drop radars in the future.

Elon taught him against "fighting entropy" (i.e. process bureuracracy, holding too many meetings).

If you don't have a person with a big hammer (like Elon), everything turns into committees, meetings, and democracy. Entropy. You need someone who's sufficiently smart to cheerlead a culture and bring down the hammer. Then things will "move very fast" hahaha.

Says he can't give a timeline on FSD because it's never been done before (vs. building a bridge), but says he knows which specific FSD problems are solvable. And says from what he saw internally at Tesla they're on track to solve all the problems around FSD right now.

None of the remaining FSD challenges "perturbs" him. They're solvable.

Why did he leave Tesla? When he joined, there were only 2 people doing NN because Tesla used Mobileye. He grew into a respectable team, but now he spends time doing management. He can do management but he doesn't like it. Wants to do more technical things again.

Says he's open to returning to Tesla in the future to lead Optimus. He's very geeked out about Optimus. But at this stage, he built FSD team and it felt autonomous.

Thanks for the synopsis! I want to watch the whole thing later, but it sounds like you covered the gist of it... much appreciated!

 

[Captkerosene]

It's funny, a lot of people assume Bezos and Musk are the same.

Personally, I think they are near opposites. Bezos seems very much like a dilettante. He dabbles in a lot of things but doesn't seem to have a deep understanding in many of them. Musk on the other hand develops a deep understanding of all of the businesses he engages in. He may not understand battery chemistry or AI as well as his better engineers, but he clearly understands it well enough to talk to them and make intelligent choices. Likewise rocketry and manufacturing. And often the pieces where there doesn't seem to be any great experts to put in charge, he seems to become the expert until someone else learns to take his place.

Bezos is the billionaire who dabbles in a lot of things that interest him.

Musk is the engineer who has enough money to engage in a lot of projects which he can explore.

Subtle but important difference.

Twenty six likes calling Bezos the "opposite" of Musk ... a "dilettante" and a "dabbler."

He's one of the best business people ever and has radically changed the world in a positive way.

Tough crowd here on TMC.

 

[Dutchie]

Thanks for the synopsis! I want to watch the whole thing later, but it sounds like you covered the gist of it... much appreciated!

Same here. Just clicked on the video and saw that it was almost 3.5 hours long! Will watch another time..