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

[bkp_duke]

Elon working on his moat to impress the Buffett:

https://twitter.com/x/status/1613536819500433408

Who the hell has a beaver as a pet . . . in a house made of wood . . .

 

[2daMoon]

Who the hell has a beaver as a pet . . . in a house made of wood . . .

Dammed if I wood gnaw the answer to that.
Probably a member of some splinter faction.

 

[Nocturnal]

Who the hell has a beaver as a pet . . . in a house made of wood . . .

To be fair, I'm made of meat and own a dog.

 

[Mark Alset]

Code red at legacy auto. Code red.

My sister had an AWD 5 seat Y order, placed in March, that was to be delivered Dec 1. She canceled her order bc Tesla refused to lower the price (Dec 1 was the cancel date as she had already delayed with a hold).

Well she just reordered today. N=1. But I suspect this price drop, which is insane, won’t last.

They could have just given everyone a $7500 credit, but instead dropped the price to well under $55k. They are going for the jugular of legacy auto , and poking a stick in the eye of the IRS.

 

[FastEddieB]

People, cut your withholdings during the year. Don't wait for a refund at the end.

Don’t think amount withheld makes any difference, nor whether you get a refund. IANAA, bit I think it only relates to Adjusted Gross Income.

 

[ZeApelido]

hehe

 

[bkp_duke]

From the price drop? 30% on the price before the drop.

Model Y

$65,990

$52,990

-$13K (-20%)

Don't quit your day job, because you are really REALLY bad at these margin calculations. Tesla already had 30+% margins (reported in the SEC filings - this is fact, not supposition) on the Model Y back in 2021, before there were IRA battery credits, IRA customer tax credits, and Berlin and Austin were sucking down $$$ and not producing any substantial volume of cars.

 

[traxila]

From the WSJ? hehe

Don’t Write Off Tesla as America’s EV Market Booms

Tesla’s price cuts and the chaotic implementation of President Biden’s new tax credits for electric vehicles obscure a bigger picture: The shift to EVs in America is getting serious.

www.wsj.com

 

[MrMoo]

Don't quit your day job, because you are really REALLY bad at these margin calculations. Tesla already had 30+% margins (reported in the SEC filings - this is fact, not supposition) on the Model Y back in 2021, before there were IRA battery credits, IRA customer tax credits, and Berlin and Austin were sucking down $$$ and not producing any substantial volume of cars.

What is your point here? Why wouldn't you just look at Q3 2022 margins from the latest report? Why are you bringing up margins from 2021?

Could you do the calculation for us?

 

[Gigapress]

And I don't believe Elon has reinvented the wheel. You previously had TBM's - tunnel boring machines. More or less automated machines that make tunnels. Is there many 4m diameter TBM's vs 8m diameter, probably not. But is there a real market for lots of 4m tunnels? No, I don't think so!

TBMs are actually not more or less automated, and importantly, Boring Co claims to be pursuing 100% automation with Prufrock. If so, my understanding is that new advantages for speed and cost are unlocked not only from the automation itself but also from not having to deal with worker safety concerns.

There literally already is a real market for lots of 4m tunnels at the prices Boring Co is charging. Las Vegas approved a 30-mile system which Boring is working on constructing right now. Dozens of casinos and other private property owners signed up to pay millions of dollars of their own money for connections to the Loop. This is by definition a market, and a big one too. For context, this is more than the total amount of subway tunnels built in North America in the entire 21st century. And this is just the first phase of what Clark County and Boring Co want to do, and just one metro area.

EVs were needed to make 4m tunnels acceptable, primarily because of the toxic exhaust gasses and liquid fire risk of ICEVs. Cheaper, narrower tunnels are part and parcel with the EV revolution and eventually the autonomous driving revolution (AEVs). The narrow tunnels also can't be open to the public because random drivers can't be trusted to drive safely and not carry hazardous cargo. The concept works only in the kind of closed personal rapid transit system that Boring Co has uniquely proposed.

Fundamentally, Boring Co constructs critical infrastructure for AEVs. The economics of AEVs in a Loop are drastically different--and drastically more affordable--than any other mode of motorized transportation ever devised, bar none. It disrupts private car ownership, busses, trains, trams, and ferry boats.

We all know robotaxis are by far Tesla's biggest opportunity in the automotive business, if they can get the technology working reliably enough. Guess what: Loops basically triple the net present value per robotaxi. Infrastructure matters. The arrival of Loops benefits Tesla like gigabit fiber internet benefits Netflix, by enabling the product (passenger-miles, videos) to be delivered with much higher throughput for a better service at lower cost.

 

[Nocturnal]

Free advertising is just rolling in.

 

[H Mak]

According to my records the following price changes have occured in the UK, standard options:

Model 3 | £48,490 -- > £42,990 (-11.34%)
Model 3 LR | £57,490 -- > £50,990 (-11.31%)
Model 3 Performance | £61,490 --> £57,990 (-5.69%)

Model Y | £51,990 --> £44,990 (-14.43%)
Model Y LR | £57,990 --> £52,990 (-8.62%)
Model Y Performance | £67,990 --> £59,990 (-11.77%)

I just configured my Model 3 (LR, midnight silver, fancy wheels) which I bought 2 1/2 years ago:
Price I paid in 2020: £49K
Price today: £53K

What are these price cuts everyone is talking about?

 

[bkp_duke]

What is your point here? Why wouldn't you just look at Q3 2022 margins from the latest report? Why are you bringing up margins from 2021?

Could you do the calculation for us?

Because things are so much more like early 2021 than they are even Q3 2022.

1) exchange rates have made a U-turn, and in a pretty substantial way
2) commodity prices have dropped HARD from Q3 (a quick google search bears this out)
3) shipping prices have dropped HARD from Q3 (also a quick google search)

I could go on, but you should really read @Gigapress's posts and @The Accountant on things like this. They have DEEP analyses that are historically pretty darned accurate. Not "cutting things by 2/3" like you did. LoL.

 

[Stretch2727]

Now we know the plan when Elon sent this tweet back in December.

https://twitter.com/x/status/1605963515402932237

 

[MrMoo]

Because things are so much more like early 2021 than they are even Q3 2022.

1) exchange rates have made a U-turn, and in a pretty substantial way
2) commodity prices have dropped HARD from Q3 (a quick google search bears this out)
3) shipping prices have dropped HARD from Q3 (also a quick google search)

I could go on, but you should really read @Gigapress's posts and @The Accountant on things like this. They have DEEP analyses that are historically pretty darned accurate. Not "cutting things by 2/3" like you did. LoL.

Your assumptions are as poor as my cutting things by 2/3.

Q3 2023 was 3 months ago but somehow you know things are more like early 2021?

Did you also know about the 405k deliveries? Could you enlighten us about Q4 earnings? You seem to have a lot of stats about commodities and shipping prices. What kind of contracts does Tesla have and when do they get renewed?

 

[Christine69420]

Back at ya, Elon!

 

[lascavarian]

After 5 days of closing above Max Pain, today this looks unlikely. MP today at 120 is going to be challenging. Volume could be interesting today.

Remember that the US markets are observing a holiday on Monday so 4 days next week before the week of the earnings call.

It will be interesting to see how competitors react.... or not.

 

[Mengy]

Because things are so much more like early 2021 than they are even Q3 2022.

1) exchange rates have made a U-turn, and in a pretty substantial way
2) commodity prices have dropped HARD from Q3 (a quick google search bears this out)
3) shipping prices have dropped HARD from Q3 (also a quick google search)

I could go on, but you should really read @Gigapress's posts and @The Accountant on things like this. They have DEEP analyses that are historically pretty darned accurate. Not "cutting things by 2/3" like you did. LoL.

While I agree COGS are likely trending back down to previous levels, let's be realistic about this. Material costs are not going to immediately go back to 2021 levels today, it will take time over the next year or two most likely. This cliff of a price cut will not be met with a subsequent cliff of COGS reduction, that simply isn't realistic.

The price drop is good for ensuring production ramps go as planned and deliveries keep accelerating, but margins ARE going to take a hit due to this. The degree of the hit can be argued, and I agree margins will creep back up over time as both COGS reduce and economies of scale kicks in, but that will probably happen gradually, not today.

 

[BornToFly]

Yes, by my calculations we should expect current margins on cars to be around 12-13% after these price cuts. The stock is going to feel a sting this year due to this.

HOWEVER, with production ramping and Berlin/Austin becoming more efficient, we should also expect margins to get a bit better throughout the year as economies of scale improve things. That said, the days of Tesla's enormous margins on cars is likely behind us now, at least for a year or two I'd say. They should still have industry leading margins, but at half or less than half what we are used to.

Unless Tesla can pull a giant rabbit out of their hat...

I paid $51990 for my Y in 2021 ($1,000 less than the current price), and Gross Margins were 30.5% that quarter. Now they have more than 2X the production, which lowers costs and balances some commodity price increases. Gross margins will be fine.

 

[bkp_duke]

Your assumptions are as poor as my cutting things by 2/3.

Q3 2023 was 3 months ago but somehow you know things are more like early 2021?

Did you also know about the 405k deliveries? Could you enlighten us about Q4 earnings? You seem to have a lot of stats about commodities and shipping prices. What kind of contracts does Tesla have and when do they get renewed?

Put your money where your mouth is. I'll bet you a TSLA share that margins didn't drop by even 35%, much less your predicted 67%.