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

[JusRelax]

If so, it would be more sensible if every other competing auto manufacturer gets hammered as well on this news... just like Tesla Daily (Rob Maurer) mentioned, how will others compete with Tesla and BYD in China?

Wow, is the market actually agreeing with me on something for once? I didn't expect the market to actually agree with me on this lol.

 

[JupiterMan]

Model S prices for LR have finally been set for EU, and they're available to order.

119k€. Also possible to choose between yoke or regular steering wheel. Delivery estimate jan-mar 2023.

still no pricing for either Plaid or LR in Right Hand Drive S/X markets.

 

[Nolimits]

I have said it before and will say it again. IRA for hybrids will not save hybrids. You guys think of hybrids as an ICE with an extra EV powertain. I think of hybrids as an EV with an extra ICE powertrain.

When you have the EV powertrain with 10kWh already and you think if you either should just add 40kWh extra of battery or add another complete ICE powertrain it becomes a nobrainer that you add the batteries.

With IRA batteries will approach $50-100/kWh, so adding that extra 40kWh of batteries will cost $2-4k. Can you get a tank, transmission, engine etc for less than that? Which one is easier to build? Which one will the customers pay more for? Which one requires less service? Which one performs better? Which one is better for the environment? Which one costs less in taxes? Which one will you be allowed to drive in cities in a few years?

Competition might believe that PHEV is an ICE with an extra battery, because that's their mindset and then they might fool themselves into believing it makes sense. But from the EV with an extra ICE mindset it makes absolutely zero sense to add the ICE...

Hybrids will very quickly be eaten alive by cheaper EVs. It's a distraction to talk about hybris, yes the IRA is silly to include them, but it's just a blimp in the history anyway, their time is soon running out.

Anecdotal input here about hybrids. My OR staff is always interested about teslas and do ask me questions frequently. They are not completely sold on it yet. ( I am not a good salesman) but they are coming around to it. The upfront cost is likely playing a role in their hesitation and lack of traditional charging options in the area. My PA always appeared to
be against teslas from the beginning and she loves her Jeep. She’s not a car person at all. Yesterday, I told her that the IRA has $7500 credit for the Wrangler 4xe models. I thought she would love that. I was surprised when her response was, “why bother w hybrids when they are all going to phase out anyway? I’ll wait for fully electric Jeep in few years.” So I agree, I think some people will just bypass hybrids and go all in or none at all.

 

[Matias]

Re storage:

Quite by coincidence a bit more private data came into me today which allowed me to get a better fix on the 2022 market for residential storage in a way that I could cross-check it against a good quality public dataset. That in turn allowed me to extend an older dataset and motivated me to clean it up a bit. The private data was knowledge of distributor level ordering of domestic grid-tie storage bundles in the UK in monetary terms. From this I was able to calculate the GWh/yr going into UK residential (domestic) storage. I could cross-check that against the well documented MCS public domain database and the two numbers were very close (about 97%). It also corresponds very well with the anecdotal data that I get back from my own installer/distributor/consultant/etc network around the world, and also with general industry media reports. That in turn allows calculation of the 2022 domestic (residential) grid-tie storage market for a typical OECD country in GWh/million population and from that one can calculate the global OECD total for the residential/domestic market in 2022. For the utility market we have some other data from some other places.

MCS Data Dashboard launches today - MCS

The new MCS Data Dashboard makes our data publicly available for the first time since the scheme began; access it now!

mcscertified.com

That in turn allowed me to fill in some interesting gaps in various tables I've been building. It can also be compared with the points I have been making in the last few days re the relative position of Tesla in the storage space.

IF YOU HAVE BETTER primary* DATA, PLEASE CONTRIBUTE

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* A lot of data in this area is commercial report-writers endlesly regurgitating the same IEA or Bloomberg reports in a very circular hyped fashion. One has to dine very selectively.

Isn’t that good for Tesla?

 

[Cult Member]

TESLA sales in Germany for December and 2022 in detail:

Source: Monatliche Neuzulassungen

 

[Artful Dodger]

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?

So, you mean Tesla's Auto business, right? Because Tesla Energy is another 2x (and likely competition is more than a decade behind). Telsa AI services dwarfs AWS in size, and Tesla Bot is beginning to take over the world-wide labor market (and already owns it off world).

So, 2000% ?

 

[Artful Dodger]

Wow, is the market actually agreeing with me on something for once? I didn't expect the market to actually agree with me on this lol.

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Yes, it makes sense that NIO, LI, and XPEV equities would be down in similar % to Tesla China price cuts (even that ignores that profits go negative non-linearly as they lose market share).

But we all want to know, how is BYD doing this a.m.?

 

[Max Plaid]

Wow, is the market actually agreeing with me on something for once? I didn't expect the market to actually agree with me on this lol.

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Markets punishing Tesla because they cut prices and punishing Tesla’s competitors because they won’t be able to compete - which is it, WS?

 

[Prunesquallor]

History of China Tesla prices.

https://twitter.com/x/status/1611286697920299008

 

[CorneliusXX]

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.

Agree that Tesla hasn't suddenly made their COGS 10%-15% cheaper in China. However Q4 22 is the first quarter with the higher volume production out of GigaShanghai so we could see COGS had already dropped some over the last 3 months and could continue to drop over the next few months as further efficiencies filter through. There is also likely some margin compression. So I doubt margins have gone from ~30% to 17% due to price cuts - It's more likely that they were creping above 30% prior to price cuts/discounts and we are still at a number higher than 17%. The Q4 financials should give us more colour.

 

[petit_bateau]

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?

I did the increased China competition, lower ramp & lower final volume, reduced margin scenario back in September-22. To be precise the file ref is for 12-09-22 and I posted results back then. That ought to help you locate the posts on this thread.

 

[petit_bateau]

Isn’t that good for Tesla?

I think not, but am not yet certain - tentatively I am minded that my previous views were / are still sound.

However now that I have discovered this extra data source ( ) I need to extend backwards and add in some other things to try and fill in further gaps. They become worth filling in now that I have a better fix on that previously big unknown.

Once I've done that the improved data may cause me to rethink. It may be a week or so to get at the fuller picture.

 

[Matias]

Fly to China, buy the car…..drive it to Europe, ship it across Atlantic?

Importing to EU would ad VAT.

 

[Sancho]

I did the increased China competition, lower ramp & lower final volume, reduced margin scenario back in September-22. To be precise the file ref is for 12-09-22 and I posted results back then. That ought to help you locate the posts on this thread.

Thanks. I think I found your analysis. It’s very helpful, but if I’m following it right, your China Competition case has Tesla margins at 20%. That’s high for a mass market car. What happens to your 2024 TSLA PE-based value if margins drop to 10%?

 

[JusRelax]

First month of Tesla Model Y in Taiwan was absolute dominance. Here's the top 20 vehicle sales in Taiwan in December:

https://twitter.com/x/status/1611136224697384961

 

[Thekiwi]

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.

They dropped the price of the model Y LR by $7k in China. There is no way that a model Y LR is $7k cheaper to make than it was yesterday - so there is undoubtedly a big sacrifice in margin per vehicle at the new price levels in China.

 

[Right_Said_Fred]

We've had two days of discussion about Tesla Energy now. Safe to say: the barricades on both sides have been manned. Time to pause the skirmishes, at least until there is some news.

Also, the Elon & Twitter thread, which had been moved to the Off Topic subforum, has blown itself up. The dissecting of every tweet, ranting, insinuating, toxic political posting, serial-downvoting and personal attacks were too much for this forum. So that thread has been closed. Which does not mean the subject moves back here or to other threads. All venting of outrage can go to Twitter. Elon will welcome the extra activity.

The exception are major developments around his ownership of Twitter or his role there, which have an effect on Tesla/TSLA. That's a high bar.

 

[Thekiwi]

Markets punishing Tesla because they cut prices and punishing Tesla’s competitors because they won’t be able to compete - which is it, WS?

A price war in any market generally isn’t good for profits of any of the firms involved.

 

[SebastienBonny]

They dropped the price of the model Y LR by $7k in China. There is no way that a model Y LR is $7k cheaper to make than it was yesterday - so there is undoubtedly a big sacrifice in margin per vehicle at the new price levels in China.

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Don’t forget prices went up A LOT since 21.
And also don’t forget manufacturing could have gotten cheaper for a couple of months now, which may have caused even better margins than before. We’ll see at the end of this month.

https://twitter.com/x/status/1611320995524083713

 

[Thekiwi]

We've had two days of discussion about Tesla Energy now. Safe to say: the barricades on both sides have been manned. Time for a pause in the skirmishes, at least until there is some news.

Also, the Elon & Twitter thread, which had been moved to the Off Topic subforum, has blown itself up. The dissecting of every tweet, ranting, insinuating, toxic politics, serial-downvoting and personal attacks were too much for this forum. So that thread has been closed. Which does not mean the subject moves back here or to other threads. All venting of outrage can go to Twitter. Elon will welcome the extra activity.

The exception are major developments around his ownership of Twitter or his role there, which have an effect on Tesla/TSLA. That's a high bar.

Question for clarification only: is there any thread on TMC now where Elons non-Tesla public statements (including his political ones) are able to be discussed?