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

[UkNorthampton]

I'm pretty sure refreshes doesn't require any structural changes. New style bumper and a new head light usually ends the exterior refresh.

Complicates parts bin, logistics. Different suppliers ar different times, possibly different specs. My understanding from Munro videos is that most Tesla parts are backwards compatible. Obviously there are big changes like Octovalves/Superbottles, Heat Pumps and the like and smaller changes eg different vehicle springs recently(?) - but still simpler than a MEB platform series of cars in a plethora of models, specs, interior trim & exterior bodywork - all in multiple colours across multiple brands not necessarily sharing the same dealer/parts networks.

 

[Artful Dodger]

200M shares traded by 3:25 p.m. No demand probs there...

 

[StealthP3D]

I can answer that one at least. There isn't technically an ROI until dividends happen. The value of a stock that doesn't offer dividends comes down to the promise of future dividends. I suppose the small chance that it goes private is also a factor.

I'm pretty sure my investments in fine art will never pay a monetary dividend. As far as I can tell, they just sit there. Are you saying I will never have a ROI on my investments?

When a billionaire pays $100 million or more for a painting, they know the painting will never offer any sort of ROI?

 

[StealthP3D]

I think what people were saying (including myself) is that there was a demand problem at the current prices and a price adjustment was needed. At lower price points there should be a lot more demand.

How are lower prices a problem when it's literally part of the business plan? The business plan cannot be carried out without lower prices. It's like saying the business plan is a problem.

Maybe "problem" doesn't mean what I think it means?

 

[lascavarian]

Looks like a good chance TSLA will close over MP(111). Last time was December 9th 2022 by my notes.

As I watched the pre market open, any such likelihood seemed very remote.

 

[UkNorthampton]

I don't know why Tesla are reducing prices in many markets.

I'm not persuaded that there's a general lack of demand at current prices. I'd personally like to see smaller price changes as & when, with customer getting best of order & delivery price (as I did).

Currency, more cells, glut of chips, JPR007's Valley Of Death, huge ramp up of car production, Inflation Reduction Act (USA), NEV changes (China), recession, car interest rates, Berlin, Texas, 4680, LFP patents expiring outside China.

One thing that has occurred to me, if I was selling competing cars in USA, I'd be happy for IRS (tax people setting subsidy criteria) to set Model Y limits at $80,000 instead of the lower limit & thereby encouraging Tesla to sell at higher prices.

Edit $70,000 to $80,000

 

[willow_hiller]

How are lower prices a problem when it's literally part of the business plan? The business plan cannot be carried out without lower prices. It's like saying the business plan is a problem.

Maybe "problem" doesn't mean what I think it means?

Exactly this. Some people are trying to construct a narrative where Tesla is being forced to lower prices against their business plan because demand has fallen.

But that narrative doesn't make sense in the context of the last several years. Tesla has been deliberately raising prices in order to suppress demand because they physically could not manufacture cars fast enough. Now that Tesla has a sufficient surplus of batteries, two fully ramped Gigafactories, and two ramping Gigafactories, supply has increased, and Tesla is choosing to lower prices to increase the quantity of cars sold for a given demand curve.

Have people forgotten the Econ 101 basics?

 

[garrett5688]

Exactly this. Some people are trying to construct a narrative where Tesla is being forced to lower prices against their business plan because demand has fallen.

But that narrative doesn't make sense in the context of the last several years. Tesla has been deliberately raising prices in order to suppress demand because they physically could not manufacture cars fast enough. Now that Tesla has a sufficient surplus of batteries, two fully ramped Gigafactories, and two ramping Gigafactories, supply has increased, and Tesla is choosing to lower prices to increase the quantity of cars sold for a given demand curve.

Have people forgotten the Econ 101 basics?

that would assume they learned it in the first place…

 

[Nocturnal]

I'm pretty sure my investments in fine art will never pay a monetary dividend. As far as I can tell, they just sit there. Are you saying I will never have a ROI on my investments?

When a billionaire pays $100 million or more for a painting, they know the painting will never offer any sort of ROI?

Art is very different than some 1s and 0s in a brokerage somewhere. Art has intrinsic value. You can't create a new Picasso tomorrow but a company can create an infinite number of shares.

If Dividends aren't the end goal, then what value does a stock have in your opinion? The value that you can sell it to another person doesn't count. Buying a share is buying a tiny part of a business. You buy a business because you want to collect profits from it's operation. We just all accept that companies can go a long time before giving dividends.

 

[trayloader]

I don't know why Tesla are reducing prices in many markets.

I'm not persuaded that there's a general lack of demand at current prices. I'd personally like to see smaller price changes as & when, with customer getting best of order & delivery price (as I did).

Currency, more cells, glut of chips, JPR007's Valley Of Death, huge ramp up of car production, Inflation Reduction Act (USA), NEV changes (China), recession, car interest rates, Berlin, Texas, 4680, LFP patents expiring outside China.

One thing that has occurred to me, if I was selling competing cars in USA, I'd be happy for IRS (tax people setting subsidy criteria) to set Model Y limits at $70,000 instead of the lower limit & thereby encouraging Tesla to sell at higher prices.

The „coup de Grace“ starts now.
In March we’ll get our perfume.
The Texan artist had it all layed out
Get it?

 

[Max Plaid]

I need some help in a debate with my son re TSLA as an investor (given his recent concerns in his inheritance, lol). He's a mathematician, so numbers help.

He thinks TSLA value is trending to zero, and not because of the FUD. Have we discussed the scenario of super low margins -> 20M annual production? And with the mission as the priority, what's the $ value of the company to an investor? To be fair, he rags on any company who doesn't pay a dividend, and is merely asking where's the return on investment. Fair question.

I'm sure there's motivation for Tesla to both make products and a profit as one protects the other, but which path satisfies the mission best? Risk of failure is diminishing with innovation and improving margins. That combination maintains the market lead.

OTOH, Tesla doesn't just make cars, and their processes and margins are best in class (yesterday anyway). People/goods need transport, and Tesla has the clear lead so they don't need to pinch any further than the competition. (You only have to run faster than the others to escape the bear and survive.)

I could use some better arguments though; his scenario seems to be making ground lately. You folks run circles around my debate skills. Maybe there's an investor definition I'm missing or ?

You can also sell calls against your shares. Yes, I know HODLers go all funny at the idea, but you can pick strikes with a %age from the SP that has never historically gone ITM - I can find the stats (@Yoona has the numbers), but it's something like 23.4% Friday to Friday, which would get you around 20 - 25c per share. Yeah, small pickings, but do that every week on half your shares, say you 10k TSLA, that's $1250 per week with a very, very low risk

Not advising, just saying it's something you can consider, it's like getting a weekly dividend, you can use that money to buy a handful of shares each week and compound your growth further, or use it as income/beer money...

 

[Max Plaid]

This is the asian culture, if they miss a discount, they feel cheated. I expect there will be some really irate clients, but it will settle down in a few days. Tesla may give them some supercharger miles or something to calm them down.

This post per my asian wife (I take no responsibility for the content).

Give them FSD that's worth a lot on paper, but costs Tesla essentially nothing

 

[bkp_duke]

Give them FSD that's worth a lot on paper, but costs Tesla essentially nothing

Only issue is I think FSD is not approved in China. Enhanced Autopilot?

 

[AndrewZ]

Dividends are how cash is paid out of corporations back to owners/investors.

There are many high earners on here who I'm sure are familiar with setting up corporations and how all that works. Legitimately 100% of my regular income is dividends paid to myself through my corporation: I incorporated a company that created shares I own entirely, my company invoices other companies, they pay my company, and my company pays me through dividends.

The stock market is a really elaborate way of trading pieces of businesses created on a much larger scale. "Growth" companies are those where fundamental investors are trying to figure out what cash they will pay back in the future, but this truly is how businesses return money through their operation.

Growth companies should only be sold if you think the current valuation is way out of line with those future cash flows and the bird in your hand today is surely worth more than the two in the future bush.

 

[Ogre]

I don't know why Tesla are reducing prices in many markets.

I'm not persuaded that there's a general lack of demand at current prices. I'd personally like to see smaller price changes as & when, with customer getting best of order & delivery price (as I did).

Currency, more cells, glut of chips, JPR007's Valley Of Death, huge ramp up of car production, Inflation Reduction Act (USA), NEV changes (China), recession, car interest rates, Berlin, Texas, 4680, LFP patents expiring outside China.

One thing that has occurred to me, if I was selling competing cars in USA, I'd be happy for IRS (tax people setting subsidy criteria) to set Model Y limits at $80,000 instead of the lower limit & thereby encouraging Tesla to sell at higher prices.

Edit $70,000 to $80,000

There are trade offs. If you make small price adjustments every few weeks, your customers try to forestall purchases in anticipation of a better price. Doing one big price change makes it clear you won’t be changing prices again soon.

 

[FreqFlyer]

I've always felt the price increases over the last 2 years was temporary - because of Covid supply issues. So, it is natural for the prices to come down. Did people really assume the prices will stay up as supply issues get resolved (and potential recession kicks in) ?

Ofcourse its going to reduce GM, but if someone assumed the high GM during Covid would never go down, they were wrong to start with.

Yes

 

[ZeApelido]

Good News:

I saw 3 Woodside mansions with newly installed massive Tesla Solar Roofs on my 10 mile run today.

Bad News:

The only way I will currently afford a few of those panels now is if I take a 2nd job as a roof installer.

 

[Singuy]

 

[OrthoSurg]

Starting -8% premarket
Closing almost +3%
This is exactly how should be a reversal in a textbook case example

The shortzees will soon understand buyers are piling in the low 100s like the Tesla showrooms in China get charged by a horde of customers when Tesla are on sale.

 

[ZenRockGarden]

Yes

Yeah, I've always looked for prices to return to "normal" and for Tesla to be in the best position to continue to be profitable as they do it.

Note that we have had inflation during the price rise, so it's not going back to early 2020 levels. But I figure they give back half of the distance when it is strategically appropriate vs factory capacity and demand.