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

[Artful Dodger]

For those forecasting severe recession, explain the COF movement. They‘re as pure a credit card play as exists in the US. Given their generally down-scale positions, one would expect larger loan loss reserves now. The new Basel reports will update this but the increased losses are not yet appearing to be material. Perhaps the Tesla worries are well above the COF market, with Tech industry layoffs and the like.
All this is well worth careful monitoring.

FYI:

"The term cost of funds refers to how much banks and financial institutions spend in order to acquire money to lend to their customers. Put simply, the cost of funds refers to the interest rate banks must pay when they borrow from a Federal Reserve bank."​

Mar 21, 2022​

 

[unk45]

This is not been my experience at all. Their proprietary approach to service has only caused delays and incompetence. They are finally coming next week, allegedly, because it usually gets pushed to fix my passenger restraint system. The price has gone up $20 since last fall when they didn’t have the parts.

This is the service appointment for my girlfriends Tesla, to come and flip the cabin view camera. It’s amazing that this was not caught during Tesla’s QA. We did not know till the new in cabin view was available on the app. I’m sure it didn’t affect the safety score.

A normal person would try to schedule both service visits at the same time. Since they are coming to the same house twice in a week. Not sure how I can do this with Tesla.



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I had a similar experience, but worse, in 2018.
The point I was making is that only since Tesla began offering insurance themselves have they begun to understand how expensive and debilitating the repair parts problems are.
Based on my professional and personal experience I suspect almost no OEM's understand these issues.

Because Elon discussed those issues specifically I hope there will be rapid improvements; the world knows they are long overdue.

 

[SageBrush]

Why do "demand worries" have to be a construct of people who want Tesla to fail? Does Rob Maurer want Tesla to fail, because he's been pointint out Tesla China demand problems since early December and he has connected sources there.

Demand is ALWAYS in the context of price. There is always a price at which no one will buy a Tesla car. There is always a price at which people will line up to buy the car. If demand cannot sustain a company's needed profit margin, there is good cause to worry. The subtlety here has to do with how much profit.

Enough to stay out of BK ?
Enough to grow the company ?
Enough to keep the current stock value ?
Enough to reach and keep a stock value of 'x' ?

Is there unlimited demand for $65k Model Y ? Of course not.
Is there huge demand for Model Y at $50k ? Yes, which is what Musk said yesterday

Does Tesla have a path to scale Model Y to $40k - $45k at a COGS that results in stock price REAL appreciation of 5 - 10% a year ? That is an interesting question. I'm optimistic, but I would not call it a slam dunk.

 

[unk45]

FYI:

"The term cost of funds refers to how much banks and financial institutions spend in order to acquire money to lend to their customers. Put simply, the cost of funds refers to the interest rate banks must pay when they borrow from a Federal Reserve bank."​

Mar 21, 2022​

That is not exactly correct, sir. The Federal Reserve itself describes the Fed discount rate:

Federal Reserve Board - The Discount Window and Discount Rate

The Federal Reserve Board of Governors in Washington DC.

www.federalreserve.gov

'Cost of funds' is an generic term typically referring to several specific elements:
In financial assessments routinely one uses 'blended average cost of funds' which generally reconciles, more or less, to a P&L interest cost entry.
For Treasury and lending decisions one typically uses 'marginal cost of funds' that is usually very different because it fluctuates with market conditions and bank liquidity.

The notable difference between either of those and the Fed discount rate is that the Fed is 100% secured and thus is less likely to be used routinely, being not a loan of last resort, but definitely undesirable..

The rate you're looking for as the typical bank market cost rate is LIBOR (London Interbank Offering Rate) which is the base on which the vast majority of US$ interbank lending is priced.

 

[TrendTrader007]

TA 101: when a stock like TSLA gaps up on huge volume after earnings, never ever try to get super cute and trade it. Just buy more and shut up. In due course of time it will likely hit $400, $500, $800 , $1000 etc
Do not be the village idiot who is too smart for his own good by trying to microtime this stock
Not financial advice

 

[2daMoon]

TA 101: when a stock like TSLA gaps up on huge volume after earnings, never ever try to get super cute and trade it. Just buy more and shut up. In due course of time it will likely hit $400, $500, $800 , $1000 etc
Do not be the village idiot who is too smart for his own good by trying to microtime this stock
Not financial advice

To frame this another way...

Take time to savor the smell of Burnt Hair in the morning!
​

also not financial advice

 

[y_naught]

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.

I don’t know how 1.8mm production is a lowball. If they do that in 2023 and increase 50% per year, they hit 20mm at the end of 2029, which is in line with 20 million annually by 2030, right?

 

[TrendTrader007]

There’s always temptation to fade a gap up at the open, which is usually successful in majority of cases for very fast, moving short term traders. That is a losers game. Big money is made by staying with the stock for prolonged periods of time. Should I trade TSLA? Absolutely, but very very, very sparingly and highly selectively once every several months, if at all or once, every few years, just my own opinion, not financial advice.
Typically time to sell Tesla’s when nobody wants to sell, and time to buy Tesla is when nobody wants to buy. Huge gap up on high volume on earnings is as close to ringing a bell at the bottom as you will ever get in Wall Street casino. Those who do not understand it will never make big money. End of conversation.

 

[mongo]

I don’t know how 1.8mm production is a lowball. If they do that in 2023 and increase 50% per year, they hit 20mm at the end of 2029, which is in line with 20 million annually by 2030, right?

The discontinuity lies in that Tesla can hit 50% YoY (1.8m) with basically zero QoQ growth.
Not that there is a problem with that, Cybertruck is a 2024 volume item as is Semi; but it looks a little weird since Berlin and Austin would theoretically increase output to the 2.0m+ level.

Possibilities:
Sandbagging/ expectation management
Lack of factory growth
Some other short term limit
Demand issues
Slow roll due to product step change

 

[Mengy]

I don’t know how 1.8mm production is a lowball. If they do that in 2023 and increase 50% per year, they hit 20mm at the end of 2029, which is in line with 20 million annually by 2030, right?

Sure, but I think most people feel Tesla's YoY production growth will taper a bit towards 2030. So its generally felt we'll do 50% CAGR for a few years yet, then taper down lower closer to 2030 to still hit that 20 million mark by then.

 

[Rammstein]

I have never had a problem with Troy's end of the quarter estimates, it's generally his early quarter predictions that don't align with things we already know. Then, as the quarter proceeds, he generally hones his numbers in to end up close to reality. It's his methodology and early quarter predictions that are screwy.

Honestly, I think the guy is completely useless. Not sure why people care what he has to say or the likes of Gary Black, Tesla Economist, CNBC, Adam Jonas, Tim Seeless, Dan Tidal Wave, or whatever person that doesn’t understand TSLA. They are all fing annoying.

 

[Bouboule]

Journalism about Tesla in Belgium: A lot of Model 3 and Model Y cars are made in Berlin.

Quotes from specialists are beter than what their own journalists are writing.
The conclusions are crystal clear. If legacy lowers prices, they are dead. If they do nothing, they are dead as well

It was made clear that early adopters will not get version 4 hardware, software or sensors. I would “bee” lying if I said I did not get a lot of criticism for having this opinion. We are just history and long investors believing the snake oil. This should help bolster profits, I don’t know about investors. Tesla’s autopilot is ranked #7, which is sad for a company with No real competition. I am so glad I have a futureproof Tesla.


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That’s the beauty of being a Tesla investor and an owner. you can enjoy the current car you own without worrying about future HW upgrages. If they are needed to get true FSD you will have more than enough money to buy it, and if it doesn’t work well it wouldn’t make a difference for you.

I really enjoy witnessing the incremental progress regardless if they ever make it.

 

[Unpilot]

Something Something....Pre-market

 

[Nocturnal]

Tesla earnings were so good that Akio Toyoda is stepping down.

Something Something....Pre-market

Let's see how much we can squeeze out of these bears.

 

[SageBrush]

The discontinuity lies in that Tesla can hit 50% YoY (1.8m) with basically zero QoQ growth.
Not that there is a problem with that, Cybertruck is a 2024 volume item as is Semi; but it looks a little weird since Berlin and Austin would theoretically increase output to the 2.0m+ level.

Musk has said he anticipates a recession, so I take the forecast as positive on Tesla, subdued due to macro-economic projections.

 

[EVMeister]

Something Something....Pre-market

10% is nice. But I'm more of a 100% kinda guy.

 

[2daMoon]

As @unk45 pointed out earlier, Elon mentioned in the call how feedback from Tesla Insurance is being utilized to design a less expensive to repair vehicle.

This is something that legacy OEMs have likely never considered, or, were it put on the table, the notion was hastily dismissed.

For them, the high cost of collision repair is a key factor for generation of new car sales to replace those which are quickly totaled after relatively minor damage. Their market is designed to bolster the illusion that a "new" version of models comes out each year and to keep up with the Joneses you have to have as late a year model as possible to "win" against the neighbor.

The paradigm is changing to one where, because the car you own is constantly upgraded, it can be a feather in your cap to see how long you will keep the car compared to your neighbor as both cars pace one another feature for feature.

Vertical integration of insurance data into the design provides yet another edge to distance Tesla from, well, the others!*

*can't bring myself to refer to them as the competition...

 

[bkp_duke]

I have a THEORY for the sandbagging 1.8m production number for 2023.

Please note, this is just my reading of the tea-leaves, but it fits the limited and available data we have.

In a nutshell - Project Highland for the Model 3.

Why? Tesla is going to take one or more lines in Fremont offline and completely retool them, including for casting. This is a major rework, which will cause months of lost production from each line that goes offline for the rework to a casted production line. Each line will also be slow to spool back up.

In the end, this will result in a lower cost Model 3, with higher customer demand, and higher overall production capacity.


The loss in 3 production will be offset by increased ramps from Austin and Berlin on the Y.

 

[2daMoon]

10% is nice. But I'm more of a 100% kinda guy.

Well, that was JUST the Pre-Market after all.

What are you, greedy?

 

[Hock1]

Here's his latest video, which includes a list of Top-5 All-time Wall St. frauds (53 min ago):

Wall Street's #1 Fraud: Stealing Your $$$ Today | Roger James Hamilton

This is great, AD. Finally, NSS is coming to the fore. The greatest financial crime ever, against the public investor. Thank you.