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

[Curt Renz]

The Street - this evening:
Cybertruck Could Boost Revenue, Says Big Tesla Investor

 

[⚡️ELECTROMAN⚡️]

The Street - this evening:
Cybertruck Could Boost Revenue, Says Big Tesla Investor

"Tesla's brand has not "taken a hit" depite concerns that Musk focused solely on Twitter after taking the company private in October, he said.

When Teslas's favorability dropped, Musk did not continue tweeting conservative stances, said Black.

"Elon is a smart guy and learned to stop tweeting more conservative views," he said. "You don't want your brand to be impacted by your more right leaning views especially if your customer franchise is over indexed to climate-friendly Democrats. It annoys them.""

 

[Ogre]

The Street - this evening:
Cybertruck Could Boost Revenue, Says Big Tesla Investor

You gotta love the laziness of these guys.

On Nov. 24, 2019, Musk said that Tesla had already received at least 187,000 orders for the Cybertruck, which was five days after the vehicle was unveiled.

Wow, 187,000? That’s almost as much as the Silverado I think.

/s

 

[phoggy123]

So I've been thinking alot lately about the price cuts in relation to the rest of the auto industry. And I've come to a couple obvious conclusions regardless of propulsion technology.

1. I think there has been a coordinated effort over the last 6-12 months to keep MSRP's high. Legacy Auto aren't necessarily sitting in a room fixing prices but specifically the asian (Toyota, Kia, Hyundai) and US (GM and Ford) etc are building higher end trims with more options that are artificially supply constrained to keep the perception and values higher. There is a Youtube Channel I watch Religiously (Savagegeese) and today one of the main reviewers discussed the conundrum in the market. One of the prime problems is the enthusiast market that Toyota, Subaru, Honda served has been decimated because supply is so low of entry level "fun" cars. The brands then use influencers on social media to blast out how great these are, but then there is no supply making people upset......I digress. The youth market has been a massive buyer of these cars because they were affordable performance. Those people cannot/will not afford a 40-50K tuner car.

2. Tesla is/was part of the Luxury space and has recently ruined this market for Lexus, and the German brands. But now that they've dropped prices they're TAM more than tripled overnight into the non luxury market. Assuming Tesla can provide supply at this cost it just thew a massive wrench into this non verbal agreement I believe in #1 to inflate prices and keep supply low. I believe the rest of the auto market assumed everyone was in the same boat. so MSRP goes up, supply goes down, and margins replace volume. This only works when everyone is on board. The moment someone breaks ranks with a product massively in demand, you now are in deep sh$t.

3. I probably shouldn't spend time writing about the long term implications, but the EV market is now in tatters for 12-24 months (for everyone else!) I believe Tesla is going to not only bolster their 60% market share in NA, they are going to make EV's so money losing that some brands will rethink electrification all together and just accept ICE/Hybrid as their only route. moving on.... I cannot speak to the European/Asian consumer, but I think so long as Tesla doesnt go back to 6+ months lead time, they are going to ruin the traditional market much faster now. If you look at ICE prices Chrysler already said uncle and have discounted pickups, Hybrids, SUV's, and anything not a traditional Jeep wrangler to pre pandemic pricing. This is the canary in the coal mine. I am not positive that even dropping prices, adding incentives, and captive financing is enough to keep people in the fold. People are so mad from point #1 that they will move on to the new way of buying much faster. People desperately want the 50K chevy blazer, but they won't be able to buy it till 2025 if ever. This was GM's plan all along. Low volume, high margin, and hope electrification takes more than a decade. Ford has so many problems with recalls and quality that even if they are able to sell EV's with any margin their warranty costs will eat them alive. The main take away from the Munro live tear down of the Lightning and Mach E, is that when that thing breaks there will only be a handful of places that have the skill to fix it and Ford needs to hope these make it to beyond warranty territory.

4. Are we sure there are still supply chain challenges? I think this is a remarkably convenient crutch for legacy to hobble on for anything but cell supply. So many things look like genius moves by Tesla in having largely interchangeable parts between low, medium and high volume products. Tesla doesnt need to manage parts for 25 different EV's and 15 different cell configurations, worry about SKU's, 3rd part manufacturing, etc. For the life of me I cannot figure out how supply chain is a challenge when cargo containers into the port of LA are at the lowest price/volume since 2018. That TSMC and the other chip makers are all guiding towards lower margins, etc. This leads me to believe that my #1 point...is the point. Now that Tesla messed that up, they are all going to scramble and start going towards volume at the worst possible time....entering a recession.

I dont know that Tesla stock will move back to 400 in the next year or two, but I do know that when all this shakes out...we can look back at this moment as Tesla calling its damn shot and the other team(s) laughing on the mound. I have been pumped for this earnings call for months, but now I am brushing this off as the appetizer till the world sees Q1/Q2 results and defecates themselves in disbelief. This will be when anger moves to disbelief, then onto acceptance that the game is almost over.

This one really got away from me....Jeez.

 

[Xepa777]

It sounds like Chanos is pretending to take a victory lap even though TSLA is nearly 10X what it was when he was trumpeting their impending bankruptcy most loudly. Deep down inside he knows TSLA is not one of his finer moments.

He does have a point in that the investor narrative shifted drastically to megpacks around the time when China demand was cracking as a new form of long-form narrative around tesla. How much of that is the lanthrop factory opening this fall? I don’t know, when lanthrop has been known for awhile. Haven’t seen the hype of mega pack consistently this year as much as, say, the cybertruck. The narrative was “FSD will save us”, then “Tesla making 20 million cars a year in 2030 FSD doesn’t matter”, to now “oh we really mean it this time tesla energy is going to take over this market even though it’s an insignificant part of our earnings today.”

And yah, as I keep point info out in my posts, utility storage is largely driven by costs, reliability, and service. Tesla has proven B2C dominance, not B2B dominance.

To dismiss Chanos here is irresponsible. And I’m saying that as someone who agrees that teslas mega packs have a cost advantage, a software advantage (which affects reliability), and a brand advantage for trust with large orders. But those leads are not insurmountable (unlike the car software experience which is hard to see anyone catching), and the margins I’m seeing some super bulls post here assumes every best case scenario outcome for every variable. Something similar to model y having like 60% gross margins lol.

 

[JRP3]

Arcimoto (FUV) Ouch!! Arcimoto shuts down factory, stock plunges as it warns of bankruptcy

I mean really, it must be hard to sell a dangerous 3 wheeler for almost as much as decent EV cars such as the Bolt.

Exactly what many of us predicted when they first announced the product. Unfortunately some on this forum invested anyway.

 

[JRP3]

To dismiss Chanos here is irresponsible.

Why, does he possess any type of insight? What knowledge does he have of battery storage technology and the potential market for such? I'm guessing zero, the same amount he had about EV technology and the potential market.

 

[AndrewZ]

I think most of the other car companies will constrain production before trying to match Tesla’s price cuts tbh

Regardless this will likely be a rough year for automakers if interest rates stay high, a bit less so if the Fed starts cutting in the back half of the year as the market is currently predicting.

The impact of the IRA will also likely be significantly reduced after March and moreso in 2024 then 2025 if the text is to be believed. This three-month grace period is probably a wrench the IRS wasn’t planning on.

 

[traxila]

No true level 5 FSD. Tesla can fully self drive in many areas across US, just not everywhere.

Trust me I have tried many multiple times in NYC. Still trying. The ’just not everywhere’ applies to me in the extreme.

 

[Thekiwi]

He does have a point in that the investor narrative shifted drastically to megpacks around the time when China demand was cracking as a new form of long-form narrative around tesla. How much of that is the lanthrop factory opening this fall? I don’t know, when lanthrop has been known for awhile. Haven’t seen the hype of mega pack consistently this year as much as, say, the cybertruck. The narrative was “FSD will save us”, then “Tesla making 20 million cars a year in 2030 FSD doesn’t matter”, to now “oh we really mean it this time tesla energy is going to take over this market even though it’s an insignificant part of our earnings today.”

And yah, as I keep point info out in my posts, utility storage is largely driven by costs, reliability, and service. Tesla has proven B2C dominance, not B2B dominance.

To dismiss Chanos here is irresponsible. And I’m saying that as someone who agrees that teslas mega packs have a cost advantage, a software advantage (which affects reliability), and a brand advantage for trust with large orders. But those leads are not insurmountable (unlike the car software experience which is hard to see anyone catching), and the margins I’m seeing some super bulls post here assumes every best case scenario outcome for every variable. Something similar to model y having like 60% gross margins lol.

I think it’s perfectly reasonable to dismiss Chanos as he is an absolute putz who has been wrong on tesla for the past decade and lost most of his funds value doing it (while he missed out on much more obvious fraud / bankruptcies elsewhere).

However your point about TSLA Uber bulls shifting from one overhyped TSLA theory to another constantly (while ignoring their previous ones which haven’t panned out as expected) is a valid one. They make regular TSLA bulls (Who rely on much more down to earth fundamentals of the company) look bad by association.

 

[AndrewZ]

There is not a single consumer vehicle that can “fully self drive” today unless you define “fully self drive” as needing to sit in the driver’s seat with your eyeballs pointed through the windshield and ready to take over in a split second while owning liability for the DDT.

I define “fully self drive” as you can sleep while the vehicle drives, Level 4-5 SAE. Tesla owns the DDT and liability for any accidents that occur, and the vehicle can be out driving around operating as a Robotaxi bringing in revenue while you are at work, are sleeping, etc therefore dramatically increasing the utilization. That was the hope and the dream, and that’s what drives a lot of the profitability in mega bull forecasts from places like ARK.

 

[ZenRockGarden]

"Tesla's brand has not "taken a hit" depite concerns that Musk focused solely on Twitter after taking the company private in October, he said.

When Teslas's favorability dropped, Musk did not continue tweeting conservative stances, said Black.

"Elon is a smart guy and learned to stop tweeting more conservative views," he said. "You don't want your brand to be impacted by your more right leaning views especially if your customer franchise is over indexed to climate-friendly Democrats. It annoys them.""

Direct measures and surveys of public sentiment contradict the "no brand damage from Elon" claim. There has been damage. Elon needs to shut up and make cars.

 

[EQC_]

Color me skeptical. ZeroSumGame is making all the same noises I would expect to hear from someone up to their eyeballs in bullish TSLA options nearing expiration. I don't know this, just sayin'...

(Not criticizing you in any way, just commenting on Chanos's logic).

On the other hand, in Chanos's tweet stream, he stated:
"A little over 1 GW of battery storage was installed in the US in 2020, and that is expected to rise to 7.5 GW ($5B) by 2025."

Chanos seemed to confuse GW with GWh in some of his tweets, but ignore that a moment.

Chanos made his argument using data that is over two years old, to define the future reality of a rapidly growing field. How is he using data from 2020, when data from 2021 and 2022 should be available? Any reasonable person would try to look at a few data points over time, and perhaps project a trend. How is a projection out to 2025, made in 2020, all that he could find in January of 2023?

Further, and please bear with me due to the change in units again:
Tesla's 2022 Q3 shareholder deck indicates their own battery storage deployments:
Q3 2021: 1.295 GWh
Q4 2021: 0.978 GWh
Q1 2022: 0.846 GWh
Q2 2022: 1.133 GWh
Q3 2022: 2.1 GWh

I'm not sure how Chanos's quoted text (original article here: In Boost for Renewables, Grid-Scale Battery Storage Is on the Rise) might calculate the nation-wide GW of installed power during year 2020, as it's not quite clear. It seems like they are talking about the "4 hour" type rate of the Megapacks though...so Tesla's Q3 2.1 GWh deployment, discharged over 4 hours, would be 500 MW installed during the quarter. Projected to 4 quarters, and the rate is 2 GW insalled per year -- So Tesla alone is already installing GW's at twice the "Nationwide" 2020 rate.

And further, Tesla alone almost doubled deployments from 2022 Q2 to Q3, with clear plans for further growth. Seems like Tesla alone will exceed that outdated 2025 projection in 2023 or 2024.

Of course, I'm doing too much analysis and giving too much credit -- Chanos could have done better work by trying to actually use current market conditions and current projections of future demand (including orders already on the books!), but since he didn't his goal was probably not accuracy/honesty.

 

[Singuy]

Trust me I have tried many multiple times in NYC. Still trying. The ’just not everywhere’ applies to me in the extreme.

Yeah I tried to drive myself in NYC and decided to park my car and take a taxi. You guys have like no lane markings and traffic lights are like a suggestion rather than law. I was like wtf is going on there. So both FSD beta and my myself failed to drive there. So I personally can't call myself L5 either.

 

[AndrewZ]

Problem is that places like NYC are where robotaxis make the most sense, super dense urban centres where many people don’t even own vehicles. You could have a large fleet of robotaxis operating 24/7 shuttling people around autonomously, and even fewer people would need to own vehicles.

Robotaxis make less sense in less-densely populated areas, and robotaxi revenue in rural Georgia will not be the same as expected Robotaxi revenue in NYC. The impacts will be most significant in the most dense, most complex cities and driving environments.

 

[Hiline]

Problem is that places like NYC are where robotaxis make the most sense, super dense urban centres where many people don’t even own vehicles. You could have a large fleet of robotaxis operating 24/7 shuttling people around autonomously, and even fewer people would need to own vehicles.

Robotaxis make less sense in less densely-populated areas, and robotaxi revenue in rural Georgia will not be the same as expected Robotaxi revenue in NYC. The impacts will be most significant in the most dense, most complex cities and driving environments.

This makes sense in theory. Having driven in NYC, I can't imagine how a robotaxi would move at all in Manhattan without being programmed to ignore most safety precautions.

 

[WattsHappening]

Aunt Cathie purchased another 50K shares today. Continuous buying over the past 2-3 weeks.

She clearly believes, as most of us do, that TSLA is severely undervalued here. Just a matter of time....

 

[Singuy]

Problem is that places like NYC are where robotaxis make the most sense, super dense urban centres where many people don’t even own vehicles. You could have a large fleet of robotaxis operating 24/7 shuttling people around autonomously, and even fewer people would need to own vehicles.

Robotaxis make less sense in less-densely populated areas, and robotaxi revenue in rural Georgia will not be the same as expected Robotaxi revenue in NYC. The impacts will be most significant in the most dense, most complex cities and driving environments.

Yes, that's why I have been bearish on robotaxis but bullish on FSD revenue for the next 5 to 10 years.

 

[Webeevdrivers]

Hey y’all. As production rises I wonder if there will be more attention paid to the Mexican market. Has anyone heard anything on a real build out of the Mexican Supercharger network and delivery centres?

Thanks in advance.

 

[madodel]

There is a long running joke of how BMW's front grille will evolve larger over time. We now see patent on what the next iternation will look like via CarBuzz.
BMW Invents Color-Changing Headlight Lenses That Hide In The Grille
When car is off:
View attachment 897082
On:
View attachment 897084

Looks like something out of a cartoon movie. Do they have a tie in with a new Disney Cars movie?