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

[Nocturnal]

My comment was pointed to the question of “Why there was so much negative media about Cybertruck timeline?”. The big answer is simple. There are a million people frustrated by their new toy being in a holding pattern for 18 months. Seeing progress has gotten a lot of people excited and I think rumors and some cheerleaders have been drumming up excitement that the timeline might be accelerating. Musk popped that bubble.

I said at beginning of year I thought we’d see around 10k trucks rolling off the line. I think Musk’s comments plus the GP install are right in line with that expectation.

Maybe a simpler, better way of saying it is the fairly slight difference in tone and more conservative language have put some people off. Doesn’t take much to set frustrated people off.

The funny part is that Ford only produced 13k Lightnings in their first 6 months of production. You don't see the media falling all over themselves calling it a slow ramp etc.

If CT production doesn't start until late summer, 5k wouldn't be bad. If they do 10k that will be great.

And of course Tesla is always attacked for selling vaporware vehicles that never come out. Meanwhile GM promised 30 (yes 30!) EVs to be out in 2023. Last I checked they had about 1.5.

 

[Sancho]

The guidance on 2023 vehicle production didn’t sound like sandbagging or a strategy change to me. Elon could not have been clearer that the expectation for 2023 is at least 2 million vehicles, but that they are conservatively guiding 1.8 to reflect the possibility of unknowns that often impact production.

 

[Ogre]

The funny part is that Ford only produced 13k Lightnings in their first 6 months of production. You don't see the media falling all over themselves calling it a slow ramp etc.

If CT production doesn't start until late summer, 5k wouldn't be bad. If they do 10k that will be great.

And of course Tesla is always attacked for selling vaporware vehicles that never come out. Meanwhile GM promised 30 (yes 30!) EVs to be out in 2023. Last I checked they had about 1.5.

Not even sure. Does 122 LYRIQ count as in “Production”?

So long as we see Cybertrucks in the Texas parking lot by Labor Day…

 

[wipster]

You know one thing (or person) we didn't hear anything about yesterday was Tom Zhu, the person who was reportedly promoted to the second highest position in Tesla, according to Forbes at least. It would have been interesting to hear some of his views on the various ramps ongoing and those to come.

Perhaps Tesla is waiting until March 1st...

 

[StealthP3D]

It is there any reason that using front and rear castings and any other cost savings they can come up with in production (battery/pack credits) that this could not result in the M3 being offered at a sub 30K starting price with a decent margin?

Tax credit could then bring it down to ~22K for the customer, hitting that sweet spot to keep buyer's attention until the next models are available.

This M3 could come to market quicker after existing line upgrades (Fremont/Shanghai) than would the new models that follow only after new factory construction and ramping is complete.

I think you're right, maybe not under $22K yet, but more affordable than the current Model 3. I've been carefully listening to management whenever they talk about the new product pipeline and the sense I get is a smaller car is not quite in the cards yet. It actually seems more like something that TSLA investors have been pushing harder than Tesla themselves. Of course, it's possible the next product announcement could be a smaller car, but my best guess is it's a bigger one that will displace more emissions per vehicle delivered. Time will tell but I'm going to guess people who want a tiny Tesla are going to be disappointed for a while longer.

 

[Mengy]

Don’t get me wrong. Tesla energy is fantastic. It’s just not the Jesus product line that some people were talking up in the past few weeks.

Not YET.

 

[KBF]

It is lowball because our run rate was 1.76 million exiting 2022.

It would be very tough to hit 2.7m vehicles/ year in 2024 (what that 50% average suggests) if we exit 2023 with a run rate of 1.8 - 1.9m per year. It’s a matter of momentum in my eyes. To stay on their “50% per year“ average growth line, they need to ship 2.7m vehicles in 2024. The lower the run rate is coming out of 2023, the harder it is for them to hit that target. For example, if they exit 2023 with a run rate of 2.1m vehicles/ year, they have to grow 53% in 2024 just to keep up.

With a 2.1m run rate exiting 2023, Tesla would ship around 1.9m vehicles (assuming flat growth over the year). So either Tesla is planning on next year being a “catch up year” with much greater than 50% growth, or they are going to blow through that 1.8m number.

Maybe I need to make a spreadsheet to explain it. But 1.8 is a weirdly low number for a lot of reasons.

Why do you think that exiting 2023 with a 1.8m run rate is even remotely on the table? The second bolded sentence is also an assumption that is unhelpful.

I thought they were quite clear that they decided to give guidance based on a Force Majeure event. So their numbers would include something equivalent to pandemic restrictions causing a shutdown in China.

You can extrapolate based on past/present rates, but it's wise to be conservative and take into account the unexpected (without going overboard - obviously WW3 would throw a much bigger wrench into the gears, but factories getting nuked isn't something you can exactly prevent anyway in that situation). Politics and bureaucracy could delay new factories, or other supply chain issues affecting the transportation industry, etc.

Musk himself has had a tendency to set the target as the best possible (in his mind) goal. This is a refreshing change, and he still can't resist pointing out it isn't their internal goal, but he's finally playing the Expectations game (which doesn't come naturally).

Others have pointed out more benign situations that could cause a temporary drop in production. A new Model 3 or other refreshes, factory upgrades that will improve production in the long term, even slightly shifting battery supply to semis or the Cybertruck.

It really doesn't seem that mysterious.

 

[lafrisbee]

Large hedge funds and big carbon are in a conundrum right now: if they direct their FED lackeys to crush the economy and induce a deep recession, Tesla is the ONLY car company that survives the storm. It the FED backs down and lets the market return to normal, then Tesla blossoms and eats up the automarket while the others fail to ramp production. They've taken their swings at Tesla, and missed (nice try, Treasury). What will they do next? Shirley they won't give up, as long as they're being paid?

Don't call me Shirley in public!!!!!!!!!!!!!!!!!!!!!!!

 

[Nocturnal]

Not even sure. Does 122 LYRIQ count as in “Production”?

So long as we see Cybertrucks in the Texas parking lot by Labor Day…

I was generous in combining the Hummer and Lyriq into half an EV.

 

[verystandard]

It'll take a while until anyone who shorted the stock in the 300s will start to feel squeezed. Sure, some will conclude that their party is over and take profits and dumb ones who shorted in the low 100s are under water but this is not a replay of '20/'21.

Even for me today I feels the pain for those who sold at the bottom and decided to go shorting as well (Especially some "Economists" that lost his parent's fortune).

I feel really bad of not buying calls at $120s let alone selling all and switching sides.

 

[Ogre]

Why do you think that exiting 2023 with a 1.8m run rate is even remotely on the table? The second bolded sentence is also an assumption that is unhelpful.

It is not an assumption.

Run rate exiting 2022 is 440k/ quarter 1.76m annualized.

So if 1st quarter has comparable production to 4th Q 2022 and we have 1.8m vehicles produced in 2023, the year’s production might look like this:

	Quarter Production	Total Production (2023)
Q1	440k	440k
Q2	450k	890k
Q3	450k	1,340k
Q4	460k	1,800k

Run rate when exiting 2023 would be 460k/ quarter or 1.84m vehicles per year. Plug in your own numbers here and show me how Tesla hits 1.8m vehicles shipped and exits the year with a higher run rate. Someone suggested there would be a down quarter due to Model 3 shutdown… that’s perhaps the only way.


This is why I’m suggesting they have to be sandbagging.

 

[MC3OZ]

Moving to cast is more about saving money on labor and part costs, and increasing quality, than it is about increasing line throughput.

I don't think we really know what the capacity of the paint shop is, or if we are currently at it. (Especially since Tesla has said that they can increase production volume at Fremont, so that likely isn't a concern.)

From memory, at Fremont there used to be 2 paintshops north and south?

At one stage one was closed, I am unsure if 1 or 2 is currently operating or even if 2 currently exist.

Highland is about reducing costs, but if there were 2 paintshops one could be shutdown and refurbished, that might be a further dent in 2023 Fremont production.

If Highland is a major upgrade, December 2023 to January 2024 is a good time to do it.

 

[wipster]

It is not an assumption.

Run rate exiting 2022 is 440k/ quarter 1.76m annualized.

So if 1st quarter has comparable production to 4th Q 2022 and we have 1.8m vehicles produced in 2023, the year’s production might look like this:

	Quarter Production	Total Production (2023)
Q1	440k	440k
Q2	450k	890k
Q3	450k	1,340k
Q4	460k	1,800k

Run rate when exiting 2023 would be 460k/ quarter or 1.84m vehicles per year. Plug in your own numbers here and show me how Tesla hits 1.8m vehicles shipped and exits the year with a higher run rate. Someone suggested there would be a down quarter due to Model 3 shutdowgn… that’s perhaps the only way.


This is why I’m suggesting they have to be sandbagging.

Geez, maybe they are, but what difference does it make? It's just a conservative estimate that takes the possibility of a force majeure event or a factory upgrade into consideration. I also believe it's so they won't get burnt by WS and analyst's expectations in 2023.

And there's nothing wrong with that.

 

[Fact Czeching]

When do we think TSLA will cross the $200 barrier again?

 

[FSDtester#1]

~ 200 Million shares traded and climbing... does anyone smarter than me, which includes all of you, know the ATH daily amount of shares traded?

 

[Hiline]

When do we think TSLA will cross the $200 barrier again?

Pulling out of my ass ... April 20th, 2023.

 

[MC3OZ]

i'd love to see a luxury SUV that doesn't look like an egg on wheels, a pickup truck that actually fits in the average garage, a work van (aka the kind of vehicle most actual workers use), and yes the sub-compact "euro-sized" car currently under development.

the S3XY lineup is too limited in variety for current long-term growth targets, and Tesla has been too slow getting new products to market.

The pace of getting new products to market has been constrained by cells supplies. It made little sense to split cells / packs over multiple models when demand for the available models could easly consume all of the available cells.

This has resulted in models and components that are highly optimised.

4680 cell production now means that raw materials are the limiting factor and the rsnge of models can be expanded. Existing cash flow and cash on hand support the required expansion.

We will find out more on March 1.

 

[FSDtester#1]

Pulling out of my ass ... April 20th, 2023.

Guess we now know someone's birthday !

 

[Ogre]

Geez, maybe they are, but what difference does it make? It's just a conservative estimate that takes the possibility of a force majeure event or a factory upgrade into consideration. I also believe it's so they won't get burnt by WS and analyst's expectations in 2023.

And there's nothing wrong with that.

Agree, there isn’t anything wrong with it. I wasn’t trying to give the impression there was.

Trying to just put the facts of the situation on the table. I think Musk’s comments about beating 2m units if there are no major events for the year is their real guidance. And the 1.8m is “The world has been a bit upside down and if it remains this way or gets worse, we can hit this number”.

I don’t like this stupid game Wall Street forces companies to play. Tesla management got raked over the coals for their 2022 “guidance” and the various interpretation of it, all while everyone ignored the reasons why they “Missed Guidance”. My question isn’t whether they beat some arbitrary goal, it’s how they performed in the situations they faced. That is ultimately why I think this earnings call was a good one.

 

[oldTAVguy]

Guess we now know someone's birthday !

It's a 420 joke.