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

[Big Time]

I've been nibbling at TSLA shares daily for weeks. Bought some more shares today at $138.50. My hands are all bloody from trying to catch this falling knife.

You will be rewarded eventually!

 

[advocate8]

Mommy, my butt hurts.
(But somehow I am still 35% above my goal for 2023)

Don't agree. Homestead solar and battery, home vehicle charging is a Prepper's/Libertarian dream. Throw in diesel at $7/gal +, and you got a phase change.

What you want to is a big slice of the people who buy, say F-150s. Some fraction of 1 percent of those might be preppers/able to afford home charging.
In short, you want the red mainstream, not an MSM cartoon version of it. But yes, $7/diesel and $8/gas would def get the entire market’s attention.

 

[Ogre]

If by the heartland (in the intermountain west) you mean Utah, Idaho, Montana, AZ, NM, Colorado, NV good luck. Throw in eastern Wa., eastern Oregon and eastern Ca. Except for the cities where there are a concentration of green voters, you will pry the dirty diesel engines out of their cold dead hands.

Since the F150 no longer ships with a diesel, you have to upgrade to the Lariat SuperDuty with Diesel… about $72,000 starting. Those are a small fairly percentage of total trucks sold.

If the Cybertruck is remotely as good in terms of bang for the buck as what was presented at launch day, Cybertruck may well be less expensive than the base diesel Ford.

I think we can debate this when there is an actual Cybertruck to compare and we know final pricing.

 

[Steven_H]

Another good read this morning:

Sea Change

www.oaktreecapital.com

View attachment 887520

That last word, "leverage" is a no-go. Many people just got margin-squeezed out.

 

[Ogre]

I think we may see some change there. Tesla got a lot of flak for having the semi and CT take so long, and the roadster too... There might be some pressure to not make any promises too far in advance when it comes to future models.
There is zero need for Tesla to pre-announce any new product. The company doesn't desperately need deposits as revenue, and its not like they don't already have a big pipeline of vehicles for the two ramping factories. We are barely even discussing a Texas/Berlin made model 3 yet, but we know it will come.

My guess is that the gap from announcement to delivery of the next vehicle, whether its a smaller car, or a van (or even a bus?*) might be shorter than we are used to.

*Tesla could well be thinking about this. Its not like there is a shortage of a market for it, and if they can make the semi work, they can build a bus. Not sexy, but a great decision in terms of 'the mission', as like semis, buses are in use a LOT.

Also, if the next vehicle (van/ SUV for example) is based on the Cybertruck, it won’t take near as long to spin up. Model Y took less than a year to spin up after announcement because it was based largely on the M3.

 

[StarFoxisDown!]

Given the heavy volume so far and lack of rally out of TSLA, I’d put 50/50 odds that Elon is selling today. Yes I know we’re technically in the quiet period but if that’s not the case and after selling off this hard TSLA can’t at least rally with the macros…then there’s a ton of downside left

 

[StealthP3D]

Thanks for quantifying the risk that Elon has to recurrently sell TSLA stock.
I’ve been looking at quantifying the brand damage done by this Twitter thing. We have seen tweets from people selling their Tesla or not buying a Tesla, but that is all anecdotal data.
I think the following may quantify (at least a ballpark figure) the potential loss of sales because of reputation damage: to me it seems like Twitter lost a lot of users to Mastodon. The people I follow on Twitter who were outraged about Elon all created a Mastodon account. Nobody mentioned any other social media, so I’ll assume that Mastodon took the majority of to people desiring to switch. According to this article (More than two million users have flocked to Mastodon since Elon Musk took over Twitter) 2 million users signed up for Mastodon recently. So the upper bound for the number of people switching from Twitter to Mastodon is 2 million. This is about 1% of the Twitter user base.
Now switching to a different social medium has a very low barrier (and a lot of those people didn’t really switch, they’re just checking out Mastodon). Not buying a Tesla is much more drastic way to express your unhappiness and that’s the only thing that may impact Tesla financially. That’s why I think the impact on Tesla sales will be much less than 1%. That’s basically noise.
I’ll probably get a lot of disagrees on this opinion, but if you do disagree, please elaborate your own reason to quantify the impact on Tesla.

Your analysis doesn't attempt to quantify how the additional publicity will make some people more likely to buy a Tesla. The brand has become more 'edgy' and some people like that. I'm going to guess that might be around 1% due to the principle that all publicity is good publicity, so the net result is zero, Tesla will continue to sell every car they produce.

A bunch of noise about what is nothing, and likely to turn into a net sales generator down the road when it really matters, if and when Elon is able to fix Twitter. People are so short-sighted they can't see their own noses. People need to get a hold of their emotions and have some perspective.

 

[Steven_H]

I agree that it is hard, close to unknowable, to exactly determine how much the current non-vehicle related issues impact buying decisions on a macro level.

However, what about a thought experiment?

Situation 1 - How conceivable is it that an individual with moderately to strongly held sociopolitical beliefs might choose to take their high dollar, environmentally conscious vehicle purchase elsewhere, given that there are other options currently?

I know personally considered maybe not getting a Tesla due to the other "noise". In my case, I just went with a logic based decision and decided to get the best car I could for my money. For me, that ended up being the Y. A car purchase, however, is frequently very emotionally-driven. Further, we have lots of anecdotal (of limited use, granted) evidence of people avoiding the brand due to the "noise" issue, representing possible brand damange.

Situation 2 - Now, on the other side, consider someone who is a fan of the CEO's more recent vocal sociopolitical statements and gestures. Perhaps they are more likely to support the brand, but lets consider that they might not have the climate/environmental motivation to go electric. How likely is it that the CEO's more recent political stances would be THE determining factor to buy a Tesla vehicle? It may nudge them in that direction, but is it likely, right now, to move them out of a big fancy Denali to a Model Y/X? Will they decide to wait for the Cybertruck, for which we do not have a current reliable release date beyond "maybe this year"?

In my opinion, (yes, fully calling attention that this is hard to objectively support), I think that IF there is likely to be a effect on brand reputation and uptake based on the very, very visible CEO's recent stances, then it is much more likely that that is brand reputation damage / decreased sales.

How likely is it that these effects ARE taking place? I don't know, I cannot quantify that. However, it does not seem quite so INCONCEIVABLE that this will be coming into play affecting sales, even if just by a small amount, going forward for the time being.

Now, given all of that (IF the more likely effect is brand damage, AND IF the current behavior is affecting brand), then HOW MUCH of an impact will/could this have? Again, very difficult to quantify.

Given the general level of disengagement in day-to-day politics among the folks, that are, let's say, in the middle 50% of the population, I don't think their decisions will be affected much. IF there is an effect, I think that it might be small, but measurable. Enough to have an impact? I don't know.

The thing is though..... why?

There's a reason that most businesses tend to stay out of hot button issues publicly. There's little upside. You're probably more likely to cause a loss in sales, than make an appreciable gain.

IF the CEO's intention is to truly make an impact on the long term survivability of the human race, it would seem prudent to only take actions that would increase the uptake of their clean ZEVs. Why even BOTHER getting very publicly and visibly engaged on such visceral issues?

Sure, go ahead and fret, personally about the "woke mind virus". Go ahead and take actions in your personal life to fight it, I guess. Start a dark money PAC, whatever. You can have this impact with out the potential of hurting your only consumer facing business.

As an investor, I know I'd rather have a publicly politically neutral leader for a business, rather than one that invites potential downside.

Nobody's hurt if they didn't sell. Spectacular buying opportunity. Fundamentals are sound.

 

[Usain]

@The Accountant are you following this account ?

https://twitter.com/zerosumgame33?s=21&t=SBOCQDK8HcdmVR4ft1lWlA

Good thread on mega pack ramp

https://twitter.com/x/status/1605375527099191296

A line from one of his tweets.
5/...By year-end 2023, TSLA will have deployed ~64 GwH of capacity, equivalent to an ~8x increase in GwH deployments over the TTM period ending 3Q’22, with upwards of $16B in gross profit contribution generated by TSLA existing and unconstrained 16K current MP backlog at Lathrop.

This is another important line from that thread:

https://twitter.com/x/status/1605375575983476736

Did you get that? 38% margins for Tesla Energy next year.

Tesla Energy is the reason I got into the stock in the first place. Tesla Energy eventually will be bigger than automotive and it is a much simpler business with much higher margins. The way I see it, the automotive business has been funding Tesla Energy's R&D until they can sort out the battery supply issues. That day is coming soon.

 

[tslalala]

Those who want to be actually informed should listen to this short clip rather than allow your neurons to be bombarded with the misleading noise spread by MSM and those who want Elon and Tesla to fail. You have a choice!

You're so right, @StealthP3D ! Sadly, too many people have chosen to not go to primary sources and make up their own minds. Instead, many are now accustomed to absorbing mainstream media's disinformation and straight out lies. This is exactly what Elon meant by "woke mind virus", when people relegate their duties to think for oneself to someone else with a harmful agenda.

 

[elasalle]

This is another important line from that thread:

https://twitter.com/x/status/1605375575983476736

Did you get that? 38% margins for Tesla Energy next year.

Tesla Energy is the reason I got into the stock in the first place. Tesla Energy eventually will be bigger than automotive and it is a much simpler business with much higher margins. The way I see it, the automotive business has been funding Tesla Energy's R&D until they can sort out the battery supply issues. That day is coming soon.

Observed/thought from a while back ...

the car is the Trojan Horse. Now competition are also creating the Trojan horses ..

3 Pillars
1. Renewable Energy Production
2.Storage
3.Usage

 

[WattsHappening]

This is another important line from that thread:

https://twitter.com/x/status/1605375575983476736

Did you get that? 38% margins for Tesla Energy next year.

Tesla Energy is the reason I got into the stock in the first place. Tesla Energy eventually will be bigger than automotive and it is a much simpler business with much higher margins. The way I see it, the automotive business has been funding Tesla Energy's R&D until they can sort out the battery supply issues. That day is coming soon.

Ya, that was one of the eye-opening points in this thread.

However, I heard Matt Smith of Good Soil Capital's mention on their weekly YouTube video that he was skeptical about some of these numbers. Matt's background is in energy so I was keen to hear his thoughts. I guess we'll see next year.

 

[elasalle]

irate Ford customer called into Cramers show yesterday .. but now I see headline from him saying Tesla share of US EV market has peaked ... (Semi, CT, MQ ) .... hello ....

 

[ZsoZso]

That last word, "leverage" is a no-go. Many people just got margin-squeezed out.

Talking about margin: early last week I bought a bunch of 140 puts expiring this weekend with the purpose of protecting my margin, never thought they would become ITM, now I am trying to walk a tight-rope selling some of them at good profit and trying to keep just enough to avoid getting margin called. It is just so tempting to take profit on the only very green item in the portfolio...

 

[AudubonB]

And it doesn't help that vowels in English are mainly for decoration rather than pronunciation.

This sub-thread started when yet another poster lauded me for presenting the challenge of words unfamiliar to him. It appears that was a burr under another’s bonnet, prompting a small snowball to start rolling.
So, as much as it is heartening to learn some enjoy having their horizons expanded, it is simultaneously sad to learn others think just the opposite, making even this innocuous a subject a way for discord to arise. Therefore, no more such comments on open thread. PM if you have anything to contribute.

 

[Mengy]

Ya, that was one of the eye-opening points in this thread.

However, I heard Matt Smith of Good Soil Capital's mention on their weekly YouTube video that he was skeptical about some of these numbers. Matt's background is in energy so I was keen to hear his thoughts. I guess we'll see next year.

I personally doubt megapack production will ramp as fast as he suggests in 2023, given the recession and macro economics. I also expect margins to rise on megapacks but not quite so aggressively and quickly.

Tesla energy is certainly starting to turn the corner, and I think within the next few years we will see it become a very meaningful part of earnings. It might take a bit longer yet to climb that bottom part of the exponential curve though.

 

[Nocturnal]

irate Ford customer called into Cramers show yesterday .. but now I see headline from him saying Tesla share of US EV market has peaked ... (Semi, CT, MQ ) .... hello ....

Tesla has what, 85% of the US EV market? Classic Cramer. No wonder the inverse Cramer does so well.

I personally doubt megapack production will ramp as fast as he suggests in 2023, given the recession and macro economics. I also expect margins to rise on megapacks but not quite so aggressively and quickly.

Tesla energy is certainly starting to turn the corner, and I think within the next few years we will see it become a very meaningful part of earnings. It might take a bit longer yet to climb that bottom part of the exponential curve though.

Worth noting that a recession has little impact on Utility company capital spending based on everything I've experienced. People still buy power regardless. Especially true for municipal utilities.

 

[ThisStockGood]

We are witnessing the kinky inverse Santa rally… I’m so excited

 

[mongo]

I personally doubt megapack production will ramp as fast as he suggests in 2023, given the recession and macro economics. I also expect margins to rise on megapacks but not quite so aggressively and quickly.

Tesla energy is certainly starting to turn the corner though, and I think within the next few years we will see it become a very meaningful part of earnings. It might take a bit longer yet to climb that bottom part of the exponential curve though.

So you are predicting production ramp will be limited by demand?
You are aware Q3 2024 is the earliest date for new orders?
Each MP is 3.9MWh. Under IRA that's $175,000 in credits assuming local cells and modules. Almost 10% of list price @100 units.

Edit:

there’s only on configuration,

Two configurations, 2 hour and 4 hour peak output.

 

[StarFoxisDown!]

I personally doubt megapack production will ramp as fast as he suggests in 2023, given the recession and macro economics. I also expect margins to rise on megapacks but not quite so aggressively and quickly.

Tesla energy is certainly starting to turn the corner, and I think within the next few years we will see it become a very meaningful part of earnings. It might take a bit longer yet to climb that bottom part of the exponential curve though.

Not sure why you think a recession has any impact of Megapack demand. This is a commercial product which is used for core energy supply purposes. There could be a major recession and still be sold out for a year.

As for the ramp and margins, not sure why you doubt ramping a product like it. It’s exponentially easier to manufacture, there’s only on configuration, and Tesla has stated they have enough battery supply to ramp it. In the event of recession and Tesla’s demand for its cars softens to where there’s even more battery supply available, it only speeds up Megapack ramp

Also as @mongo just pointed out, the credits Tesla gets from the IRA practically guarantees margins double from where they’re at today without factoring in the actual dynamics of Rampling production which will results in 3%+ margins even without the IRA