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

[Todd Burch]

All this talk about “demand problems” have me experiencing flashbacks to Econ 101. It’s really simple.

Did Tesla have demand problems at their old prices? Not at the start of 2022, at the production rate of early 2022. That’s why prices rose, so their order books wouldn’t grow further.

Did Tesla have demand problems at their old prices at the end of 2022, at the production rates at the end of 2022? Absolutely.

What changed? Macro environment and production rate.

Seriously, this is trival economics. Tesla lowered their prices because they had a demand problem in December. They’re tweaking them back up because demand is exceeding current production rates, but their prices are based off of future (higher) production rates.

Tesla will ask as much as they can get for their vehicles to balance order rates with production rates. Supply vs demand. If they lower prices, it’s because there’s not enough D for the S. If they raise them, there’s not enough S for the D.

We are currently entering a deflationary period with fears of recession, and the cost of borrowing money is high. Tesla’s also significantly ramping production. This brings prices down.

If we get past the recession fears and interest rates start coming back down, we’ll probably see prices go back up.

There’s no conspiracy here, and it’s not a Tesla problem. It’s simple economics and Tesla’s just reacting to the macro environment. All other companies will have to do the same.

Fortunately for us, Tesla knows how to minimize cost, giving them wide berth to make such decisions. Others don’t have that luxury. Watch as some competitors suffer under the pricing pressure this year.

 

[MikeC]

Asian markets up, EV stocks up 10+%.

https://twitter.com/x/status/1618483084936228864

 

[Mike Smith]

Tesla's regulatory credits must be the longest recurring non-recurring item ever.

 

[Xepa777]

Not saying I agree with dingus, but Tesla putting out what seems to be a lowball estimate sets them up for this kind of commentary.

I think it’s one of those deals where you really can’t win.

Is it lowball though? I remember when people were posting very long theses about tesla sand bagging 2021 and expecting a 80%+ increase, gigs Berlin and Austin finishing 6 months earlier than sandbagged timelines and pumping cars to the moon.

But yah, people have such selective memories here and move from one moon dream to another.

 

[Artful Dodger]

No, they didn't. That quote is about production:

View attachment 899800

The closest guidance for deliveries is this chart:

Which looks like about 1.65M.

50% CAGR from baseline 2020 deliveries (the 'blue' bars) would be 1.6875 million deliveries in 2023. We may stay above the trendline, which Tesla did NOT plot on this graph.

In this graph, Tesla's essential message is that, even though analysts called Q4 deliveries a 'miss', the trend for cumulative deliveries (ie: the 'big picture') is STILL solidly above guidance, which has remained steadfast since 2020.

The world has wobbled badly twice since 2020, while Tesla motors on!

Cheers to the Longs!

 

[Xepa777]

That's some serious fraud right there folks. "Let me redefine how YoY numbers are calculated and show you how by my definition that no one uses, Tesla sucks".

Ignoring the misuse of YoY as annualized 4th Q results, isn't this:

Saying the same as this:

?

That if 1.8mm vehicles is accurate, then QoQ growth (and thus automotive growth in general) in 2023 is near zero.

Of course, that (GJ Tweet, not Gigapress) ignores energy and FSD and insurance and efficiency gains which can drive greater profits.

Also overlooks CT ramp toward volume production in 2024. 2.0mm productiom gets us 2k/wk additional from both Austin and Berlin putting them at >250k/yr average (half Berlin phase 1 target).

This. Can’t be hypocritical about this it works both ways, and I see people looking at q4 run rate as a base all the time including today for the bull thesis.

I think tesla growth rate slows down below 50% for years to come until the gen 3 platform (the cheap car) comes out. With the reason/excuse being “we’re reallocating batteries to semi, truck, and energy which all require more.” Perfectly valid? Of course.

But I’m saying this to point out every hyperbull who were treating the 50% number as the law of Moses here all the way until earlier this year (for many years) and absolutely TRASHING analysts for having growth rates of 30%. TRASHING.

When look, let’s not rewrite history, earlier this year Elon and Zac were talking about 50% growth this year, which was just redefined as 50% from the base year because they failed to meet it this year (and Rob Maurer pointed this out).

The level of bull I read here is bad.

 

[MC3OZ]

Well Tesla guided for decreasing margins for 2023. This severely caps what the share price can reach this year. Earnings between $4 and $5 means relatively low growth, maybe 30% earnings growth at best. Fair share price this year will be around $120.

It could probably top out near $200 as shorts exit realizing profits aren't going to 0, but it's gonna head back down soon after.

But I guess that the good news is that we get to see Jesus again before the end of the the world...

I'm diving back under the covers .... will wait for some good news.

 

[Ogre]

Is it lowball though? I remember when people were posting very long theses about tesla sand bagging 2021 and expecting a 80%+ increase, gigs Berlin and Austin finishing 6 months earlier than sandbagged timelines and pumping cars to the moon.

But yah, people have such selective memories here and move from one moon dream to another.

I’ve mentioned as much previously.

But yes, I think it is easily within Tesla’s capabilities to increase their 4Q production rate by 15% or more.

I also think it’s wise of Tesla to guide a number they can meet even if there is another Shanghai shutdown, deep recession, the war escalates, or we have another global pandemic. Apparently some folks have forgotten about those things too.

 

[Noble Ninja]

They are playing it safe for a change. Whenever they give the guidance they expect but then miss it even in the slightest bit, no matter what the reasons, Wall Street punishes them hard.

I think the fact the Tesla team has realized this and is now understating everything they do is a huge boon. Shows they realize how stupid the market and all these "guidance" numbers truly are.

Those of us who really know what Tesla is doing realize how silly 1.8 million for 2023 is, but let Tesla give these super conservative numbers to the "analysts" who don't know any better. Beating "expectations" is always better when it comes to Wall Street.

Sandbagging for the win, looking forward to Q4 2023!

Great points and totally agree with this.

We know most of these Wall Street analysts tend to have a short-term perspective, only viewing things one quarter at a time, and grasping things like how an S-curve production scales over the long term or the potential impact of FSD, Robotaxis and continually evolving A.I. are simply beyond their scope of analysis. However, if estimates are priced to perfection, which isn't likely to be achieved, it will inevitably disappoint despite stellar numbers otherwise.

I think to assure them of Tesla's long term growth, part of it comes down to managing expectations, so the old saying of "under promise, over deliver" would be beneficial here. Plus, with the cautiously optimistic views of 2023, it would be prudent of Tesla to have a more conservative estimate and their 1.8 Million vehicles for 2023 definitely fits the bill (and we know they are capable of more, especially with Berlin and Austin factory ramp ups).

 

[Ogre]

I would be happy if I could catch up... jeez, take the morning to work and make a few bucks to buy some chairs and now 24 pages to catch up!!! This thread is on
Fire

At least it’s (mostly) for the right reasons.

 

[Artful Dodger]

Better than I feared, worse than I hoped for.

No mention of FSD in side deck.

Pg.10

CORE TECHNOLOGY

Autopilot and Full Self-Driving (FSD)

"We have now release FSD Beta to nearly all customer in the US and Canada..." (approx. 400K) Also, a graphic showing 90M miles driven cumulatively under FSD Beta as of Dec 2022.

There's another comment elsewhere that they recognized ~300M in revenue for FSD in Q4, and plan to recogize ~$1B in the next 12 months.

 

[Ogre]

When look, let’s not rewrite history, earlier this year Elon and Zac were talking about 50% growth this year, which was just redefined as 50% from the base year because they failed to meet it this year.

You’d figure people would be happy that Tesla put out an estimate that has zero wiggliness or room for debate later on in the year, but some people feel the urge to complain about pretty much anything. Expressed not just as a percentage from a baseline, but as an actual number.

I’m tired… need to get to bed. Maybe in AM I’ll re-read your post and you’ll come across as less caustic.

 

[MC3OZ]

Is it lowball though? I remember when people were posting very long theses about tesla sand bagging 2021 and expecting a 80%+ increase, gigs Berlin and Austin finishing 6 months earlier than sandbagged timelines and pumping cars to the moon.

But yah, people have such selective memories here and move from one moon dream to another.

1.8 million seems like a target they can easily hit.

The Q4 run rate was close to that, they already have cells for up to 2 million.
Model Y in Austin and Berlin are still ramping and are both listed at a production capacity of > 250,000.
Cybertruck is going to start low volume production this year.
There may be some production line shutdowns for the transition to Model 3 Highland.

On the 4680 cell side 1 out of 4 lines is running at Austin, the cathode plant should help the 4680 ramp.

Making more than 1.8 million cars in 2023 seems dependent on the Austin 4680 ramp going smoothly, more Model Y production at Austin and Berlin, plus any shutdown for Highland not being a major drag.

With the amount of equipment being installed in Austin some increase on that > 250,000 seems possible.

March 1 is all about the next phase of expansion, probably more like 2024-2025.

My expectations are 1.8 to 2.2 Million, they are not going far above 2 Million on the evidence that we have so far.

They can always increase the target in a future call if things seem to be tracking well. Reducing growth estimates is more problematic.

 

[Noble Ninja]

Just saw this. I'm speechless.

https://twitter.com/x/status/1618358779518791681

On Tip Ranks, this analyst is rated 0.5 / 5 stars and ranked at # 7,671 out of 8,294 WS Analysts, with a success rate about the same as flipping a coin.

Gordon Johnson | GLJ Research Stock Analyst - TipRanks.com

Gordon Johnson is a 0.29-star Wall Street Analyst at GLJ Research. Gordon Johnson's focuses on the Basic Materials sector and covers 36 stocks with a 55.87% success rate.

www.tipranks.com

 

[NicoV]

Well sure but 1.8M cars would mean 2023 will be the first time ever that Tesla spends an entire year not growing vehicle output whatsoever. That’s just ludicrous, especially with Tesla also guiding for continued production growth at Berlin and Texas and flat production at Shanghai. They are giving implicitly contradictory guidance. It is mathematically impossible for both statements to be true.

Tesla is just reverting back to the “a win must feel like a win” mentality of when the Model 3 finally started to ramp. It’s just a way to fight the FUD.

 

[Artful Dodger]

Lock in on interest rates perhaps?

Nope, variable rate loan. Eg: EUbor + 0.1%

tsla-8k_20230120.htm - Revolving Credit Facility Citibank Jan 20, 2023​

 

[Thekiwi]

For whom the bell tolls…

 

[heltok]

TSLA trading at 139.80 Euro = $152.62 which more than at after hours.

 

[Oil4AsphaultOnly]

For whom the bell tolls…

View attachment 899923

Good riddance. From his tenure as CEO (from 2009), he's probably the reason why the Prius never moved past being a non-plug-in hybrid (DIYers were doing it themselves for a LONG time).

 

[Cult Member]

I'm glad that I took my blood pressure pills early in the morning.
First what I've heard at Bloomberg Radio was an interview with an 'analyst'. They asked him about Tesla's ER compared to other car makers. He answered that they remain the leader in EV, but others are ramping up fast, e.g. BYD and Ford with their F150. It did not even come out of his mouth that Tesla is a car maker, just an EV maker.
Maybe I should practise Yoga or something similar. No, better: I go to my favourite bakery and get something sweet and delicious.