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

[madodel]

A “….& the Investment World” post for this thread.

Last year’s -18.1% S&P500 return was good for the 7th worst annual performance since 1928.

Here is a chart of the following 1, 3, 5 & 7 year following performances of the S&P500 following the 10 worst years since 1928:

View attachment 894369

The 1 year performance is a crap shoot with 50/50 positive/negative instances, but the 3,5 & 7 year returns are nice in most cases.

The other thing that jumps out is that although this is a list of the 10 individual worst annual returns - 4 of the years belong to 2 year periods of horrible returns: ‘73 & ‘74, and ‘01 & ‘02.

I can't speak to 1931, but 2008 was a horrendous year. It got to the point I couldn't look at my brokerage account for months. But I held (and still have those AAPL shares) and things came back nicely in 2009. I'm just thankful that 2022 is over and hopefully TSLA over the next month and few months gives us something to turn the SP around this year. Thanks for posting this. Cheers to the longs.

 

[kbM3]

Tesla's gross margins are more impacted by production ramp than price. Berlin/Texas were money furnaces that killed gross margin.

Gross margin peaked at 32.9% Q1 2022 with 3/Y ASP at 53k. Prior to this, gm was over 30%+ from q3 and q4 2021 when a Model Y LR was priced at around 52k. However when production drops and adding in Berlin/Texas, we see that gm tanked to 27% in q2 2022 even tho Tesla prioritized high trim cars that Q with 3/Y asp being at 56k (recall that you will receive your car sooner if you add wheels, paint, or upgrade to P models). Q3 ASP dropped down to 53k, however GM stayed flat due to Berlin/Texas being the money furnace that they are, but shanghai efficiencies were back.

So with commodity prices coming down and shipping cost coming way down, I don't know where people are getting "gross margins will be slightly above 20%" from if Tesla drop prices. Once FX + Berlin/Texas drag goes away, Tesla can maintain 30% gross margin without a problem going forward especially when the IRA is paying Tesla. Tesla can finally actually recognize some of those 63k/car kind of revenue vs trying to fullfill backlogs with people who ordered at a lower price like a year ago.

When drag from Berlin and Austin goes away, it will be replaced by other ramping production lines. So long as we have 50% growth and 1 year long ramps that dictates that at any point in time (on average) 50% of the production lines will be in an inefficient state of ramping.

 

[JusRelax]

ARK bought another 100k+ shares today of TSLA.

 

[Ogre]

It would be nice if there was a way for the community to help moderate this thread, eg have an off topic reaction and if it gets N of those it gets removed (or maybe just hidden for a mod's final judgement). Just like you need a minimum reaction score to start reacting to other posts, maybe there is a threshold for being able to mark as off topic to prevent trolls from wreaking havoc.

I’m not a troll, in an Ogre.

 

[Singuy]

When drag from Berlin and Austin goes away, it will be replaced by other ramping production lines. So long as we have 50% growth and 1 year long ramps that dictates that at any point in time (on average) 50% of the production lines will be in an inefficient state of ramping.

They will affect Tesla's gm smaller and smaller unless Tesla's next mission is to build 4 gigas at the same time, keeping the same ratio going where Shanghai was a drag on Fremont, then Texas/Berlin was a drag on Shanghai/Fremont.

 

[AudubonB]

Edmunds demonstrates beyond a doubt who they are in the pool with.

View attachment 894352

They know the truth and try to proactively suppress it.

View attachment 894353

But the post is of course pounded by replies saying exactly that.

I guess Edmunds has to work a little harder to earn a buck from GM now.

OK, I'm game: I won't say "Cybertruck", I'll say you misspelled CeleryStalk. (hint: hit that 894352 link).

 

[Artful Dodger]

When drag from Berlin and Austin goes away, it will be replaced by other ramping production lines. So long as we have 50% growth and 1 year long ramps that dictates that at any point in time (on average) 50% of the production lines will be in an inefficient state of ramping.

That's why Gen3 is so brilliant. Half the cost, half the time, twice the production. And you know they'll bring them up in modules sized around 5K/wk production. That ramp'll pay for itself after the first quarter, and make money afterward.

Gross margin isn't a topline or bottomline item; when Tesla is growing both those metrics, Slick Wally can bitch short all the way to the poor house.

 

[jamaatta]

If we think about stuff like battery-grade graphite, somewhere around 80%+ of global production comes out of China and North Korea. MSRP is of course driven partially by cost of manufacturing, but the monumental challenge will be wrestling production of critical materials like graphite away foreign entities of concern.

We might have an European substitude for graphite, a tree-based lignin.Stora Enso is already developing, piloting and marketing pdoduction of it:

"The benefits: faster charge rates, European supply chain, sustainable, fossil-free origin"​

Lignode makes it possible to make batteries from trees

Graphite is the dominant anode material used in lithium-ion batteries. In fact, almost 30% of a lithium-ion battery consists of this material. What if European EV and battery manufacturers could say that their anode is made from a tree?

www.storaenso.com

 

[Thekiwi]

FYI - a negative news story which might be a drag tomorrow.

Video footage of Tesla FSD failing miserably (changing lanes and braking in a clear multi lane tunnel) and causing a 9 car nose-to-tail.

Exclusive: Surveillance Footage of Tesla Crash on SF’s Bay Bridge Hours After Elon Musk Announces "Self-Driving" Feature

Elon Musk has said Tesla’s problematic autopilot features are “really the difference between Tesla being worth a lot of money or worth basically zero.”

theintercept.com

 

[Discoducky]

Edmunds demonstrates beyond a doubt who they are in the pool with.

View attachment 894352

They know the truth and try to proactively suppress it.

View attachment 894353

But the post is of course pounded by replies saying exactly that.

I guess Edmunds has to work a little harder to earn a buck from GM now.

Am I the only one who sees this?

 

[AndrewZ]

We might have an European substitude for graphite, a tree-based lignin.Stora Enso is already developing, piloting and marketing pdoduction of it:

"The benefits: faster charge rates, European supply chain, sustainable, fossil-free origin"​

Lignode makes it possible to make batteries from trees

Graphite is the dominant anode material used in lithium-ion batteries. In fact, almost 30% of a lithium-ion battery consists of this material. What if European EV and battery manufacturers could say that their anode is made from a tree?

www.storaenso.com

This sounds like a wicked development, I would just caution that a brand new technology will likely take years to scale

Even established stuff like graphite production and refining etc will likely take years to ramp up outside of China despite the technology already existing. Building facilities takes time, money, and manpower, building domestic resource extraction and refining projects is rife with environmental red tape and NIMBYism that countries like China don’t contend with, resources coming from other sources will cost significantly more by default because of the environmental regulations and higher labour costs, etc.

None of these are challenges that can’t be overcome, but they will be real challenges. China has spent years working to dominate this supply chain and now here we are.

 

[willow_hiller]

Video footage of Tesla FSD failing miserably (changing lanes and braking in a clear multi lane tunnel) and causing a 9 car nose-to-tail.

There's no possibility that FSD was involved. That highway is driven via Navigate on Autopilot exclusively.

 

[Singuy]

FYI - a negative news story which might be a drag tomorrow.

Video footage of Tesla FSD failing miserably (changing lanes and braking in a clear multi lane tunnel) and causing a 9 car nose-to-tail.

Exclusive: Surveillance Footage of Tesla Crash on SF’s Bay Bridge Hours After Elon Musk Announces "Self-Driving" Feature

Elon Musk has said Tesla’s problematic autopilot features are “really the difference between Tesla being worth a lot of money or worth basically zero.”

theintercept.com

Investigation needed. I think the driver there fell asleep and the car came to a complete stop with the hazard light. The guy doesn't even know his car is completely stopped or else he would have pressed the accelerator because the car behind him didn't hit him.

 

[KBF]

It would be nice if there was a way for the community to help moderate this thread, eg have an off topic reaction and if it gets N of those it gets removed (or maybe just hidden for a mod's final judgement). Just like you need a minimum reaction score to start reacting to other posts, maybe there is a threshold for being able to mark as off topic to prevent trolls from wreaking havoc.

We already can. Click the 3 dots on the lower right corner of an off-topic post, click 'report', and tell the mods "off-topic." You can also use it to report inflammatory posts, insults, etc.

Bonus: that means we keep this thread cleaner by not responding/complaining about these posts.

 

[Chunky Jr.]

There's no possibility that FSD was involved. That highway is driven via Navigate on Autopilot exclusively.

that's a detail no one will understand other than Tesla owners. People will just think Tesla's software had a bug that caused an accident

 

[Singuy]

From the second footage it looks like the Tesla was switching lanes while braking to a complete stop into someone else's lane. This is not a typical EAP behavior as it usually cancels the lane change, not hard brake. Don't know what the driver was doing by just letting the car brake unless there was a mis pedal application where he pressed on the brake vs the accelerator.

 

[willow_hiller]

Investigation needed. I think the driver there fell asleep and the car came to a complete stop with the hazard light. The guy doesn't even know his car is completely stopped or else he would have pressed the accelerator because the car behind him didn't hit him.

Agreed. This accident occurred on November 24, the exact same day that Tesla implemented defeat-device detection in their latest firmware.

So if he was someone who slapped a weight on his wheel and took a nap regularly, this would have been the first time his vehicle would detect that, pull over, and put on the hazards.

 

[EVNow]

that's a detail no one will understand other than Tesla owners. People will just think Tesla's software had a bug that caused an accident

That is where Tesla need to jump on the story and issue a statement. All the news outlets will be forced to carry that statement - atleast partly neutralizing any market knee-jerk reaction.

 

[Hock1]

The 100,000 is just a number in an announcement by Hertz. There was never any agreement with Tesla. They're just ordering the cars bit by bit, and receiving them bit by bit. For all we know, Hertz may have shrunk their intended BEV fleet size to 75,000 vehicles and not announced that (very, very unlikely) or they have increased their target fleet size to 300,000 vehicles and are still ordering

Hertz will do to the rental car business what the Semi will do to the trucking business.

 

[Ogre]

Investigation needed. I think the driver there fell asleep and the car came to a complete stop with the hazard light. The guy doesn't even know his car is completely stopped or else he would have pressed the accelerator because the car behind him didn't hit him.

Seriously. How does your car stop without you noticing? That's not something which happens in a hurry.

Agreed. This accident occurred on November 24, the exact same day that Tesla implemented defeat-device detection in their latest firmware.

So if he was someone who slapped a weight on his wheel and took a nap regularly, this would have been the first time his vehicle would detect that, pull over, and put on the hazards.

That would be the height of tragic irony.

Tesla is likely keeping quiet because there is going to be big litigation.