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

[elasalle]

one thing is for sure…all these price cuts are going to cause everyone one to re-evaluate and remodel
So if 50%+ growth can be maintained, factories will not need to be idled etc … it might actually be a good thing right? ….? But I think the reevaluation will take a few days or till earnings?…

 

[ripper88]

https://twitter.com/x/status/1611242325342052353

I hope this is true...

 

[TSLA_Hopeful]

Drew Baglino needs to go. If 4680s weren't stuck in the mud, then we could have our own batteries like BYD and even outcompete on cost. How is it okay that 2 years after battery day we still are stuck in the mud? Drew was never that great anyways. Off with his head.

 

[NicoV]

Good News:
Regular Model S and X are now offered in Europe
Plaid and Regular Model S and X are now offered in China

Great!
Although the prices are very high. 115K for a base Model S. I remember the S (with the largest battery pack) being below 100K a couple of years ago.
I’m not sure, hasn’t the price for the plaid gone up by 5K?

 

[StealthP3D]

Margins to 12%-18%, and demand to 1.5x (of 2022)?
I am trying to figure your estimate on earnings here.

It's a pretty dynamic environment to be projecting meaningful earnings estimates into. I'm far more interested in Tesla's ability to scale production, supply chains, reduce the cost of production, and release new models (can you say Cybertruck) on time and ramp volumes effectively, etc. than how much profit they make this year, when all is said and done. Don't get me wrong, profits are important and the more the better, but the record profits last year will be dwarfed by future profits, not necessarily this year's, the value of TSLA lies in the huge potential profits in the future. Brokerage analysts will still focus on each quarter's numbers with a magnifying glass while ignoring where this ship is headed, that's OK, that's what they do and it's why I ignore them.

If Tesla was teetering on the edge of solvency, it would be more important to get a tighter handle on earnings, but I don't see the point considering there could be more price cutting (we have no way of knowing) and we have no idea where consumer sentiment and a host of other things will be in this environment. I am confident that lower profits won't be problematic beyond that it will make their cash reserves grow at a lower rate. I'll be happy if they stay profitable, anything above that is a nice bonus. The more the merrier, I just have no way to accurately forecast it. I would suggest the picture will be much clearer after we get guidance during the Q4 conference call, but it still won't matter as much as the roadmap.

 

[aubreymcfato]

Worse specs. IP55, operating temperature only to -10 degrees. Not acceptable in my climate for outdoor installation. That Powerwall is looking better and better.

The point is... Can you actually get it? I was under the impression that some US customers are waiting for the PW since 2020. Not sure about Europe.

 

[trayloader]

You and I have a different understanding of what "demand issues" means. The Tesla naysayers were saying lack of demand would collapse sales and stop Tesla's growth dead in its tracks. But that's not going to happen because Tesla has unmatched pricing power and their cost to produce continues to decline. I've been very consistent on this issue from the beginning.

It's not a demand problem if you can keep growing production and sales. No one said Tesla would not have to lower prices to continue to make inroads into increasingly larger market segments, that's a given even if you ignore how much Tesla has added onto the prices since they introduced the Model 3 and Model Y. Businesses scale to unimaginable size and profitability by becoming more dominant and increasing production and sales. It's also how we drive the mission forward.

Lowering the prices was built into the business plan from the beginning. The anomaly was the price raises in 2021 and 2022 caused by unprecedented demand which was due, in turn, to legacy auto's supply chains being less resilient than Tesla's. Tesla had to raise their prices because legacy auto's supply chains broke. Tesla had supply chain pressures, but they managed to continue to grow production through this period leading to record profits. That Tesla is now lowering prices back down only surprises people who haven't been paying attention to the business plan and events over the last couple of years.

I'll say it again: There is no demand problem!

agreed.
The price raise was a bit too steep, too unnatural. Brilliant strategic move.

However 115k for the MS LR is obscene tho it sports the power of the ex P100DL/Perfromance Raven.
Guess they build them for max. 45-50k

 

[trayloader]

Drew Baglino needs to go. If 4680s weren't stuck in the mud, then we could have our own batteries like BYD and even outcompete on cost. How is it okay that 2 years after battery day we still are stuck in the mud? Drew was never that great anyways. Off with his head.

He is the sole cause for the price inflation at the superchargers too.

 

[printf42]

Sand Munro going to interview Elon again soon:

https://twitter.com/x/status/1611287009301266434

Is Elon ready to spill some beans about Cyber Truck? Maybe even gen3 platform?

 

[verystandard]

108$ in early per market Frankfurt. All though the price cuts might not be that bad in the long run, I suspect the stock market will have a different take on it.

 

[NicoV]

The point is... Can you actually get it? I was under the impression that some US customers are waiting for the PW since 2020. Not sure about Europe.

No. I have a solar roof+power wall reservation since February 2017. Haven’t heard from Tesla since then.

 

[Chartered321]

I am afraid this price cuts are going to bankrupt NIO, Lucid, Rivian, etc..

 

[MikeAtkinson]

https://twitter.com/x/status/1611253774483607555

"Behind Tesla's price adjustments, there’re countless engineering innovations, which are essentially unique & excellent cost control mechanisms, including but not limited to vehicle integration design, production line design, and supply chain management and even optimize the robot arm coordination route at the millisecond level...Starting from the 'first principle', insist on cost pricing."

This suggests that in China there may be little to no fall in margins.

 

[SebastienBonny]

Yeah… I wonder why Rob Maurer was focussing on lower margins (he only briefly mentioned lower costs), when this could just be a consequence of better technology, cheaper parts,… This will give demand a serious boost, while margins could remain the same. We all know what that means.

 

[TSLA Siempre]

https://twitter.com/x/status/1611253774483607555

"Behind Tesla's price adjustments, there’re countless engineering innovations, which are essentially unique & excellent cost control mechanisms, including but not limited to vehicle integration design, production line design, and supply chain management and even optimize the robot arm coordination route at the millisecond level...Starting from the 'first principle', insist on cost pricing."

This suggests that in China there may be little to no fall in margins.

I so want to believe this. I wish Tesla China didn’t trash their credibility at the end of 2022. Makes it harder to believe frankly.

 

[Max Plaid]

https://twitter.com/x/status/1611183825912233985

TBH, I prefer the yoke… easy to drive and really makes for a spacious interior

I’m happy to see the price-reductions in China - as supply-chain normalises, cogs reduces, Tesla can pass on this savings, keep strong margins, sell more cars…

Pierre agrees

https://twitter.com/x/status/1611221446696501248

 

[Atomsla]

Yeah… I wonder why Rob Maurer was focussing on lower margins (he only briefly mentioned lower costs), when this could just be a consequence of better technology, cheaper parts,… This will give demand a serious boost, while margins could remain the same. We all know what that means.

I think its better to be bit more realistic here. While (the translation of) that post makes it sound almost like production improvements / efficiencies will offset the the price cuts, you can safely assume that margins will be a fair bit lower for cars sold in China.

 

[Artful Dodger]

Hard to imagine it going lower than $100 but I guess never know in this market

110.34 - 10% = 99.30

DCA FTW.

 

[Sancho]

Has anybody here run a financial model of what Tesla’s annual profit looks like in a fully mature EV market? Make your own assumptions, but mine would be something like:

Tesla selling 10 million units per year
$25k ASP
No longer any pricing power since competition can make similar product, so margin comes only from lower cost than the competition. So, 10% margin?

 

[JusRelax]

I think its better to be bit more realistic here. While (the translation of) that post makes it sound almost like production improvements / efficiencies will offset the the price cuts, you can safely assume that margins will be a fair bit lower for cars sold in China.

IMO, anyone expecting margins to remain the same in China for Tesla would likely be setting themselves up for an unhappy surprise.

If margins in China were to actually remain the same, however, this would bode extremely well for Tesla, considering that Tom Zhu brought a team of Tesla China engineers with him to Fremont/Austin recently.