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

[petit_bateau]

You conveniently left out the other elephant in the room. Parts suppliers and their economics. There is a reason Ford supported bailout of GM & Chrysler. If any big OEM goes under, a lot of suppliers will shutdown and we should expect major disruption.

A more likely scenario is where legacy manufacturers slowly shrink and EV manufacturers grow. Finally when legacy manufacturers go under, no one even notices. Like how Sears or K-Mart went bankrupt.

Graceful progressively decline and transfer over to BEV seems unlikely. These legacy dino-juice companies aren't good at down-scaling, and their BEV offerings are almost certainly not making any significant profit (GM%). If their BEV offerings were significantly profitable they'd be bragging about it.

I expect a few types of failure as their dino-juice volumes turn down and their NM goes negative:
- split the BEV division off into a new floated entity via IPO/SPAC; then flush the legacy debts and union agreements and pension liabilities via bankruptcy;
- straightforward collapse with the 'surprise' finding that the debt load was all taxpayer (state) backed in a lot of jurisdictions;

My guess is faulure of JLR's UK-based operations first, unless Tata can screw more money out of the UK taxpayer (pay up, or your auto industry is Brexit toast). Other weak ones might be Mitsubishi and Mazda, though Covid has thrown a wobbler into the stats. One way or another nation-states will be left holding the bill, if only in the unemployment statistics and the political consequences.

Average net profit margin: car companies 2020 | Statista

With average net profit margins of around 7.5 percent, Great Wall and Subaru had the highest average net profit margin in the five years leading up to 2020.

www.statista.com

Which Major Car Companies Were the Most and Least Profitable in 2020

Find how much the largest car companies earned in profits during 2020 as well as the ones that ended up not being profitable at all.

alansfactoryoutlet.com

That might be just large enough to cast a complete subframe for a car midway in size between a VW Golf and Polo. The die width seems sufficient, although the max length would be tight.

BTW, Tesla is now building a "Die shop" on the West side of the new Cathode plant at Giga Texas, according to speculation from Joe Tegtmeyer. I don't think these new dies will be for Gigapresses, since they already have their own milling machines in the casting workshop to make new casting dies.

Instead, I think the new "Die shop" will manufacture DBE platen rollers. You know, the kind that Tesla said they kept bending while rolling the DBE cathodes at the pilot plant on Kato Rd. in Fremont. Might as well "roll your own" (and keep it in-house) if you're gonna need moar for the forseeable future.

- That is the most obvious size to pick for the 2/Z. It needs to be much shorter than the 3/Y, or it simply cannot be parked in a lot of streets around the world.

- Calender rollers tend to be a long lead item, which is problematic if you are tring to tune profiles and surface types, quite apart from the operational issues. Having a manufacturing shop of this nature on site would be handy. But at a guess - if they are doing this - they'll still be ordering in the foundry items from the relevant steel foundries and holding them as unmachined stock.

 

[Dikkie Dik]

FWIW, good China numbers

https://twitter.com/x/status/1615302565104590849

 

[avoigt]

The YouGov figure is not the net favourability rating. What they call “Popularity rating” is simply the percentage of people in the survey who liked him. It does not subtract the amount of people who disliked him. Subtracting dislikes from likes is the standard definition for a “net favourability” rating.

The net favourability rating for Elon on YouGov is actually a similar net favourability rating that Morning Consult has for Tesla: 13% . (Yougov data has Elon “liked by” 45% & “disliked by” 32% = 13% net favourable). yougov doesnt seem to show a history of Elon “disliked by” readings unfortunately, so can’t compare Net favourability in their survey with previous months.

The YouGov net favourability rating for Tesla is currently 26% (”liked by” 48% vs “disliked by” 22%), which is feeble compared to other car brands net favorability:

Toyota: 62% (69% like vs 7% dislike)
Honda: 62% (68% like vs 6% dislike)
Ford: 51% (62% like vs 11% dislike)
Volkswagon: 48% (57% like vs 9% dislike)
GM: 48% (59% like vs 11% dislike)
Tesla:: 26% (48% like vs 22% dislike)

YouGov: Tesla's Fame improved in the last 12 months and popularity remains high. So, the conclusion you draw is not reflected in the data they published

 

[Unpilot]

Explain "Tesla Model Y" related queries to me like I'm 5.

View attachment 896532

grandma holla tiktok died!?!?!?
Say it isn't so!

 

[jw934]

Usually at beginning of quarter more cars are in transit. So last week’s 12,654 high China number seems to be a change in pattern that further show the impact of Tesla reducing the wave. Or more likely it is due to inventory, greater production and the higher demand level from the price cut.

Insured volume on second week of quarter:
2022Q3 =4K
2022Q4 =5K
2023Q1 =13K

https://twitter.com/x/status/1615302501133324288

 

[UkNorthampton]

Graceful progressively decline and transfer over to BEV seems unlikely. These legacy dino-juice companies aren't good at down-scaling, and their BEV offerings are almost certainly not making any significant profit (GM%). If their BEV offerings were significantly profitable they'd be bragging about it.

I expect a few types of failure as their dino-juice volumes turn down and their NM goes negative:
- split the BEV division off into a new floated entity via IPO/SPAC; then flush the legacy debts and union agreements and pension liabilities via bankruptcy;
- straightforward collapse with the 'surprise' finding that the debt load was all taxpayer (state) backed in a lot of jurisdictions;

My guess is faulure of JLR's UK-based operations first, unless Tata can screw more money out of the UK taxpayer (pay up, or your auto industry is Brexit toast). Other weak ones might be Mitsubishi and Mazda, though Covid has thrown a wobbler into the stats. One way or another nation-states will be left holding the bill, if only in the unemployment statistics and the political consequences.

Average net profit margin: car companies 2020 | Statista

With average net profit margins of around 7.5 percent, Great Wall and Subaru had the highest average net profit margin in the five years leading up to 2020.

www.statista.com

Which Major Car Companies Were the Most and Least Profitable in 2020

Find how much the largest car companies earned in profits during 2020 as well as the ones that ended up not being profitable at all.

alansfactoryoutlet.com

- That is the most obvious size to pick for the 2/Z. It needs to be much shorter than the 3/Y, or it simply cannot be parked in a lot of streets around the world.

- Calender rollers tend to be a long lead item, which is problematic if you are tring to tune profiles and surface types, quite apart from the operational issues. Having a manufacturing shop of this nature on site would be handy. But at a guess - if they are doing this - they'll still be ordering in the foundry items from the relevant steel foundries and holding them as unmachined stock.

Governments (money, expedited permitting) & legacy OEMs (political influence & some investment) will create some of the infrastructure but the legacies won't be the main beneficiaries long term.

Conventional parts suppliers, new battery materials, recyclers & cell suppliers will lose their legacy customers & have availability for the survivors. Tesla will be a beneficiary of part of the EU & USA support for battery supply chain, a multiplier for Tesla's own huge efforts.

UK: I've always disbelieved BritishVolt and also cynical about Tata/JLR's need for UK government money. If anything does come from moves to electrify their supply chains, it will be utilised by others, not them.

If we look at UK parts suppliers, they will have to look beyond current customers.

 

[Unpilot]

A polite reminder about why most of us are here.

https://twitter.com/x/status/1614991656583041024

 

[Gigapress]

I’ve been driving across the US doing my own survey. Not entirely rigorous but I also trust my own data and observations more than institutional research organizations I’m not familiar with, and some stuff can be better gleaned from longer personal conversations than short survey questions. Main limitation is one person can only talk to so many people.

I’ve talked about the car with about 30 people on this trip. Young and old; liberal, conservative and moderate; engineers and non tech savvy; immigrants and native-born Americans; even a geriatric blind woman. Total mentions of Elon with respect to the Tesla brand were zero except by my brother, but he’s invested in TSLA too and we discuss this stuff frequently. One family member has a couple liberal friends who are upset enough with Elon to consider not buying the car, and that’s all, though it’s not clear to me that these friends, who weren’t even in the market for a new ca, have actually researched Tesla or other EV options at all. Literally everyone else liked the car, or already knows they want one, and all had some questions and curiosity. Over 90% approval rating in my sample. If we count the few I heard about secondhand. 100% if we count people I talked to and showed the car or answered FAQs.

Of greatest note was visiting my 10-year-old cousin. I had not talked with my cousin about Tesla ever before. Her parents drive plug-in hybrids so she is familiar with the basic EV experience. Upper middle class suburb of major US metro area. According to her, the entire neighborhood of kids wants Teslas. I was informed that Lambos and their ilk are no longer cool and kids only want Tesla or maybe Rolls Royce. After our joy ride, she told her friends on the block, “It’s cooler than you think”. Other kids were staring, apparently enamored when we pulled out. Dropped her off at school and the volunteer kid at the drop-off line who saw her in it was smirking because she was riding in it which no one expected. Another quote from our joy ride: “All these other cars look so old”. Zero mention, positive negative or neutral, of Elon, but lots of questions and commentary about the car itself for about a half hour straight. My cousin is one person but the entire neighborhood has an overwhelmingly high net positive rating on the Tesla brand for the kids. They are probably not alone nationwide in feeling this way since we have a fairly geographically homogeneous youth culture nowadays thanks to TV and the internet and long-distance travel. If their neighborhood is at all representative of what other kids are thinking then that’s a great sign for Tesla’s future.

Potential sources of sampling bias:

• I personally knew about half of the people I talked to
• Some people may not have wanted to share negative opinions or bring up political concerns in small talk with a stranger
• Skew towards urban and suburban
• Skew towards southern half of the country
• I was sole survey conductor and factors relating to me personally may have influenced the outcome

 

[FEERSUMENDJIN]

Yes, the Tesla Semi can take on the F-350. But over 99% of long-distance road freight is by 18-wheeler because it's very uneconomical to tow freight long-distances by pick-up truck. It's a very niche specialty market limited to show and race horses and heavy goods that are time sensitive. I wish people would stop trying to figure out how to electrify long-distance freight when it's a miniscule market that doesn't use trains or 18-wheelers.

Yeah, but we ALL want a RV based on the Semi

 

[Artful Dodger]

ECON 101 w. Prof. Ferguson: Class is now in session.

Bradford Ferguson on Twitter: "I’m not sure people understand DEMAND CURVES. $TSLA As price increases, demand decreases. As price decreases, demand increases. It’s a curve. Tesla is riding the demand curve as they scale supply, they lower prices. Simple It’s NOT some disaster. https://t.co/esbHbiETca" / Twitter​

Mid-term exams are in just 8 days. Study the basics, folks (it's a long term).

Cheers to the Longs!

 

[Max Plaid]

OK, yes, it's Reuters, apologies, but they don't tend to fib about the +ve news items...

Hertz also now buying Teslas in EU, I don't recall hearing abbot that previously

Hertz to offer 25,000 EV rentals to Uber drivers in Europe

Some feedback on the US program: "The companies (sic) said on Tuesday that to date, nearly 50,000 U.S. Uber drivers have rented a Tesla through the program, so far completing more than 24 million fully-electric trips covering more than 260 million miles (418 million km)."

 

[MABMAB]

A polite reminder about why most of us are here.

https://twitter.com/x/status/1614991656583041024

I hate posts wherein someone makes a collective we claim.

 

[FEERSUMENDJIN]

Governments (money, expedited permitting) & legacy OEMs (political influence & some investment) will create some of the infrastructure but the legacies won't be the main beneficiaries long term.

Conventional parts suppliers, new battery materials, recyclers & cell suppliers will lose their legacy customers & have availability for the survivors. Tesla will be a beneficiary of part of the EU & USA support for battery supply chain, a multiplier for Tesla's own huge efforts.

UK: I've always disbelieved BritishVolt and also cynical about Tata/JLR's need for UK government money. If anything does come from moves to electrify their supply chains, it will be utilised by others, not them.

If we look at UK parts suppliers, they will have to look beyond current customers.

UK will have to reinvent some small players to enter the market. Munro Vehicles | Home

 

[Artful Dodger]

Yeah, but we ALL want a RV based on the Semi

Lol, well, maybe not all the Overlanders...

Cheers!

 

[Cattledog]

Thinking about the upcoming earnings call, this is what I hope for Tesla and TSLA:

1. Tesla needs to position itself as the world leader in innovation and that they are crushing it in making money, now and in the future. Last January, Elon went on his long soliloquy about Optimus (innovation) at the expense of reinforcing confidence on the business side of things, right when people in the financial world could see the big slip happening in macros. So, the perfect combination of vision and execution, youthful (as a company) exuberance and calculated efficiency.

2. To do the business side of things, I think investors would like to hear, I would like to hear, a clear structure for how they achieve this. The days of Elon saying "...any engineer with a good idea reports to me...' need to be in the past. He can say that, so they still have the youthful exuberance, they still convey confidence of a future product pipeline, after he, Zach or someone says somethings like:

Going forward, we, Tesla, will be structured with dynamic leaders at the head of the following groups, who will report to me and also be charged to innovate and cross collaborate to create the products and services the world needs to fulfill our mission:

Mobility - Cars, SUVs, Trucks, Semis, other future moving vehicles (Tom Zhu, or other 1-2 names)
Energy - Megapacks, Powerwalls, Solar Panels, Solar Roofs, Autobidder, Superchargers, Heat Pump/Home AC, new batteries, etc. (Drew Baglino or 1-2 other names)
Technology (or AI, or Autonomy) - Optimus, Dojo, FSD/Robotaxi, Tesla Vision, Apps/Entertainment Store, etc. - (?)
Finance - Tesla Financial, TeslaPay (making that up), Crypto (or not) - (Zach Kirkhorn or other 1-2 names)
Manufacturing - (If the key is the machine that builds the machine, after monetizing it with your products, monetize to other industries with factory as product/service) - (??)
And Everything Else We Don't Know About Yet... - (???)

This way, when he eventually unveils Master Plan Part Three and elaborates how they are going to achieve things at very large scale, the stated focus of Part Three, investors see they've got this. While we want people to think we have the best CEO in the world with great ideas, we also want them to think that he has attracted the best talent in the world, which he has, and both our favorite genius and his Rat Pack will lead us to unimagined places in the next 10 years.

TSLA's valuation going forward will forever be linked to both the promise of the future and the performance of the present. They have to always convince investors they are in firm control of both.

 

[Artful Dodger]

Over 3.5M shares of TSLA traded so far in the Pre-Market:



That's good volume, w. TLSA currently on top of the leader board: (will it drag macros upward?)

S&P 500 Companies - S&P 500 Index Components by Market Cap

Cheers!

 

[DarkandStormy]

After going through multiple cycles of high volatility, there’s a lot of the "free float" held by shareholders, like me, that are loath to part with their shares. A short would be a fool to count on that calculation. But hey, I’ve made my bed and I’m happy to lie in it. As @Artful Dodger says "Buy right, hold tight." Am I right? lol

Sorry, not sure I'm following the lingo here.

I used a number you gave (80m shares short, the high end of your range actually) and applied it to the Tesla's public float (2.69bn shares) to get to ~3%

Now you're saying only a "fool" would count on that calculation - so which part is suspect...the # of shares short or the public float?

There is no way to "truly" calculate a company's public float if you want to throw out the "HODLers." Probably a good % of shareholders aren't planning on selling AAPL or AMZN either, for instance.

You have to go with facts you can prove, not with what you "feel" or whatever. My only point was that you said "70-80m shares short" as if it's an astronomical number, but 3% is the context that matters and it falls in line with quite a few other companies.

 

[joh01652]

FYI - Morning Consult latest brand survey result for Tesla:

View attachment 896613

You do realize this is just a public relations firm, right? Data analytics/marketing consult is just a sexier version of the "public relations" moniker which has fallen out of fashion. PR firms merely publish whatever agenda their clients want them to publish. The board of directors for Morning Consult is comprised of a bunch of PR execs/venture capitalists. Graphs like these are as useless to an investor as share price predictions due to financial conflicts-of-interest of the issuing company.

 

[jw934]

ECON 101 w. Prof. Ferguson: Class is now in session.

Bradford Ferguson on Twitter: "I’m not sure people understand DEMAND CURVES. $TSLA As price increases, demand decreases. As price decreases, demand increases. It’s a curve. Tesla is riding the demand curve as they scale supply, they lower prices. Simple It’s NOT some disaster. https://t.co/esbHbiETca" / Twitter​

Mid-term exams are in just 8 days. Study the basics, folks (it's a long term).

Cheers to the Longs!

More charts

Source

 

[FireMedic]

Of greatest note was visiting my 10-year-old cousin.

My 10 year old son is one of the kids who helps with the unload line at school. There’s three kids every day that help and every day the principal has to designate one of the kids who gets to open Tesla doors, otherwise they fight over who gets to open those? You can’t make this stuff up!

I know few people more obsessed with Tesla than my son. He’s definitely fighting FUD on the frontlines. He loves to tell me when he’s able to fact check someone about Tesla.

The future car buyers of America know what’s up, and IMO this is not a trivial detail.