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

[FSDtester#1]

I’ve been driving with FSD for over a year. The only reason it isn’t perfect is because it has obvious blind spots. The logic is there. I think the world is in for a surprise when they add a couple more cameras. And I’d bet that Tesla will retrofit any extra hardware necessary, for free. Why do you think they charge so much for FSD?

I want Tesla to do whatever it takes to bankrupt legacy auto. Sell the cars at break even, I don’t care. Put them out of their misery. Burn them. Become a monopoly. You are invested in a 40x more expensive iPhone on wheels without a competitor in sight. Everyone will have one. Everyone will be driven in one.

I am not @Artful Dodger .. so I don't know the protocol.
Can we nominate this post for some kind of award of pure no holds barred honesty?
I put this post in my top 10 favorites of all time.

 

[SOULPEDL]

Countries aggressively compete to have Tesla GigaFactories, while the US tries to close them. I vote for Mexico, but only if USA get's it's message and talk straight.

South Korea’s local governments battle to host Tesla Gigafactory

Tesla is always looking to build the next gigafactory, and South Korea is one of the most likely destinations. The Asian country’s municipal governments are already angling to be the host after Tesla revealed its […]

driveteslacanada.ca

 

[ElectricIAC]

Countries aggressively compete to have Tesla GigaFactories, while the US tries to close them. I vote for Mexico, but only if USA get's it's message and talk straight.

South Korea’s local governments battle to host Tesla Gigafactory

Tesla is always looking to build the next gigafactory, and South Korea is one of the most likely destinations. The Asian country’s municipal governments are already angling to be the host after Tesla revealed its […]

driveteslacanada.ca

I’m for closing NUMMI and expanding Giga TX once Mexico gets going as a final FO to Alameda County.

 

[wipster]

Haven't looked at the used inventory lately (I would assume a lot of lease returns), but how many had FSD capable included? That in itself makes for a hell of a deal.

Most of them!

 

[SOULPEDL]

I was about to post something similar. Tesla makes on average $15k gross margin per car sold. But it varies by car model/trim and location.
For example, I estimate that a Model Y LR made in Fremont and sold in the US has a profit margin of about $22k based on today's list price (excluding the $7.5 discount). Tesla can easily reduce prices that the competition will not be able to match.

In addition, current margins are suppressed by the inefficient Berlin/Austin sites. As volumes build at these factories, margins will improve further. Rather than take these improved margins to the bottom-line, Tesla can take price discounts to drive more sales keeping margins relatively flat.
Let's see how the economic conditions pan out for 2023, Tesla has some wiggle room.

Is my logic correct? Wrights law still applies (toward reducing cost of Manufacturing) despite the sale price of each vehicle. Therefor, Tesla will grow volume ASAP no matter the market price and should only consider a warm-down in production if there is a loss per unit and insufficient cash to weather these cycles. This approach does not speak well for profits or margins, but allows for the fastest possible recovery as we climb the S-curve of EV adoption for which the need continues to grow.

"Specifically, <Wrights Law> states that for every cumulative doubling of units produced, costs will fall by a constant percentage."
This is independent of selling price, and may not include the efficiency improvements made as a result of newer replacement technology such as dry cell process or casting tech.

 

[EVNow]

Future Self Driving.

Problem solved.

Not FSD ?

 

[Dikkie Dik]

Zero did some more numbers, >70% gross margin after IRA credits?!

https://twitter.com/x/status/1606707444549406722

 

[adiggs]

Elon basically said they will cut prices IF demand falls in his Twitter spaces convo. The market (and analysts it seems) is pricing in a severe recession, so this makes sense I guess. Do we know for sure how much the IRA will help Tesla yet? Anyone have a crystal ball for vehicle spending behavior in Q1, Q2?

@Gigapress posted something that I believe you'll find in the Moderator's Posts of Merit (whatever that thread is called). Sometime over the last 3ish months?

I don't remember the details - I remember part of the conclusion being that the benefit to Tesla may be so large that the entire IRA gets rescinded well before when the legislation is intended to end.


Here we go:

Moderators' Choice: Posts of Particular Merit

Earnings S-Curve . . . . . . at our Doorstep Analysts have consistently underestimated Tesla's earnings: Their consistent underestimation is difficult to understand. Tesla's earnings (EPS) have been somewhat linear over the past several quarters. The analysts would have been more...

teslamotorsclub.com

The concluding paragraph:

What If the Law Lasts Longer?
If the law persists any longer than that, then the benefit to Tesla will be enormous. In theory the IRA doesn't have these credits expire until after 2032.
Here's an idea of how crazy this could get if Tesla grows like they say they will and the law stays in place, I estimate they would garner a cumulative total of $670 BILLION in subsidy impact. I seriously doubt this law will last in its current form much past 2025 or 2026 because it will get increasingly hard to justify to voters why Tesla is getting such big handouts, and the total cost will include subsidies for all the hybrids and batteries from other companies that can meet the sourcing requirements.

 

[adiggs]

Zero did some more numbers, >70% gross margin after IRA credits?!

https://twitter.com/x/status/1606707444549406722

Yeah - a different approach with the same big picture result. TSLA is currently being value as a car company, with the energy business being a free option (that -could- be a DRAG on the company). As opposed to the energy business possibly being big enough in 2023 to be worth the current share price, with the car business as a free option.

God I hate the pain I've put myself into, and I sure do like the blindingly bright light shining in my eyes.

 

[SOULPEDL]

Most of them!

All of the used local Ys (4/4) also have FSD, and 1 of 4 for Model 3 used.

Correction from before, the "many used" I mentioned were from outside Az. So only 8 used 3+Y in Az, and no new. It's a 2022 blowout inventory sale.
Next year, I believe FSD puts the Y over the 80K IRA incentive for an SUV. So those Y's are quite the deal. Probably the same with a 3 + FSD, I'm not close to the details.

 

[traxila]

Haven't looked at the used inventory lately (I would assume a lot of lease returns), but how many had FSD capable included? That in itself makes for a hell of a deal.

Checked again now and found one new MY in Boston available.

They almost all say FSD capability. But what does that mean? FSD in not included, just the hardware which all Teslas have.

EDIT: Sorry for the lack of ninja awareness. But does FSD capability mean included?

 

[wipster]

Checked again now and found one new MY in Boston available.

They all say FSD capability. But what does that mean? FSD in not included, just the hardware which all Teslas have.

No, they all have FSD. Don't know why they say that but it was clarified by Tesla.

 

[sdtslafan]

Anecote:

3 days ago I counted 50 new model Ys in inventory within 200 miles of San Diego. This may not fully count cars which have identical configurations so the true number could have been much higher.

This morning there is only 1 new model Y in inventory within 200 miles of San Diego.

Wow, that was quick!!! I think its a real testament to the underlying demand for Teslas as well as the sensitivity to price during these times.

 

[traxila]

No, they all have FSD. Don't know why they say that but it was clarified by Tesla.

One who is interested in FSD is much better off buying a slightly used car with the 15 K option tossed in for free? This is a ridiculous deal if true.

Does this make sense? OR is it all about data gathering at this point for Tesla, regardless of who is paying for FSD at the moment?

 

[Singuy]

Checked again now and found one new MY in Boston available.

They almost all say FSD capability. But what does that mean? FSD in not included, just the hardware which all Teslas have.

EDIT: Sorry for the lack of ninja awareness. But does FSD capability mean included?

Yes, or else just says Autopilot.

 

[FSDtester#1]

Fantastical Sapientpearwood Deliverydevice. Hmmmmmm….

Dictionary.com gets a lot of traffic from this thread thanks to you!

 

[Cosmacelf]

I don't remember the details - I remember part of the conclusion being that the benefit to Tesla may be so large that the entire IRA gets rescinded well before when the legislation is intended to end.

What I was trying to say (it wasn't clear) was I was wondering if we knew yet the impact IRA will have in Q1 and Q2, since I think Treasury is still releasing guidance? Is Tesla actually going to get IRA subsidies in Q1?

 

[traxila]

Anecote:

3 days ago I counted 50 new model Ys in inventory within 200 miles of San Diego. This may not fully count cars which have identical configurations so the true number could have been much higher.

This morning there is only 1 new model Y in inventory within 200 miles of San Diego.

Wow, that was quick!!! I think its a real testament to the underlying demand for Teslas as well as the sensitivity to price during these times.

Despite Gary Black's protestations to the opposite and his anecdotal stories of PMs feeling ill over the discount and considering dumping TSLA over it, I do not understand what is so hard to grasp that the last two weeks of sales may have been completely wiped out without the 7.5K discount that takes place on January 1st 2023 suddenly being available now. There are very few buyers who would shrug away a 7500 bank deposit because they did not want to wait 14 days.

It is true that this would not matter in the end as the storm of sales would occur come the New Year regardless, and Tesla has no debt, but taking into account TSLA shareholders, whom the company does have some sort of fiduciary duty too (right?), and the prospects of what would occur to the SP if Tesla sales fell 90% the last two weeks of 4Q in the USA, why is it surprising or mysterious that Tesla would discount its ridiculously high margins at the end of year to make sure all inventory moves, which has other built in advantages as well, insofar as logistics and labor costs?

 

[traxila]

What I was trying to say (it wasn't clear) was I was wondering if we knew yet the impact IRA will have in Q1 and Q2, since I think Treasury is still releasing guidance? Is Tesla actually going to get IRA subsidies in Q1?

What I have gleaned is that all BEVs will get the 7.5K in the USA until official Treasury guidance is finalized, released and implemented.

 

[bkp_duke]

One who is interested in FSD is much better off buying a slightly used car with the 15 K option tossed in for free? This is a ridiculous deal if true.

Does this make sense? OR is it all about data gathering at this point for Tesla, regardless of who is paying for FSD at the moment?

This is the route we went, basically got a 18mo Model Y with FSD and a Performance for the price a new LR would have been, without FSD.