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

[SOULPEDL]

I also think if the Model 3 was tweaked to be a hatchback it would have crazy sales. Honestly the only thing I wish for our Model 3. Dont say that is the Model Y. I dont like the SUV form factor in general.

Like this 240Z? Imagine the supreme handling of this car size as a Tesla.

 

[gtrplyr1]

Oh ... I forgot to add.

Model 2 ... starting price is $29,750

Tesla's margin on that car will be 26.4%

They will sell a LOT of them ...

Available in : Blue, Red, White and Black only

Your welcome.

I'm not sure what was in my coffee this morning but I'm having one of those days.

 

[SOULPEDL]

Still early in the week (Fed?) but Max Pain seems 200 strike dominant (160 MP so far).
Shorts don't seem to have focus yet, kinda spread out, but drawing the 160 line in the sand for now.
The truth might lie somewhere in between, say 180? (+/- Fed)

 

[StealthP3D]

While I generally agree with your points above, I think you may be underestimating the advantages of a smaller car in European and Asian cities. A lot of times it's not about aerodynamics or energy consumption; it's about convenience. When roads are narrow and parking spaces are restrictive, a smaller car is a much better daily driver. In a lot of cities I've been to, there are very few dedicated parking spots - cars often need to park right on the pavement. When space is such a premium, a smaller car is much needed to facilitate mass adoption.

There is still enough demand for the Model 3 right now for Tesla to keep producing this so-called compact car as the lowest cost option, but if Tesla really wants to replace gas cars completely, they need to produce a yet smaller car very soon. The Model 3 appeals to the population that favors performance and range, and to much of the world these are secondary priorities.

While I generally agree with most of your points above, the reason Tesla hasn't already rushed into small city cars is because their current sales of all models are only around 2% of global auto sales and city cars are low profit vehicles that will displace lower amounts of fossil fuels vs. cars that pack on the miles. Tesla's cars only amounts to 2% of global auto sales, there is no compelling reason for Tesla to enter a lower reward market until the time is right, because it's lower in both profits and in moving us closer to a successful mission.

Perspective is everything.

 

[Baumisch]

Hardly anyone NEEDS over 200 miles of range 96% of the time ... (96% ... yes I've done research) ....

Most of Europe and Asia do not want a car the size of the model 3

Most Americans drive with less than 4 people in the car 93% of the time .... ( more research on my part)

Putting out a new "variant" of the model3 and calling it a new product is a waste of everyones time ... Elon does not waste time.

Shift to EV's is here ... this is the time to put the dagger in.

Therefore:

Model 2

200 Mile range (give or take 20 miles)

No glass roof

I was gonna correct you on the glass roof as it was put into every m3 to make assembly easier for entrance from the top .... but with structural pack and seats-on-pack Tesla won't need the glassroof for assembly reasons ... mhhhh

 

[petit_bateau]

You inspired me to do some research and its VERY interesting.
In the UK, the bare basic model 3 is £42,990
basic hyundai ioniq 5: £43,150
basic VW ID 4: £40,275
basic MG 4: £26,995.

The VW and Hyundai are LAUGHABLY poor choices given the specs against the model 3. Nobody in their right mind in the UK would buy an ID 4 or Hyundai ioniq now. But the MG...
It almost seems like a pricing error how good that car is:

MG MG4 EV Long Range

All details and specs of the MG MG4 EV Long Range (2022). Compare price, lease, real-world range and consumption of every electric vehicle.

ev-database.org

This is the only car that I think is a 'threat' to tesla (for people who dont want the improved acceleration and charging speed).
My neighbor has one on order and I await his verdict with interest.

Other research: Here are the ranges (combined mild weather wltp) of the base models of the top 5 EVs (by sales) in the UK:
1 Model Y 245m
2 Model 3 275m
3 Kia Niro EV 275m
4 VW ID.3 250m
5 Nissan Leaf 170m
6 Mini 130m
7 Polestar 2 275m

Also Average hatchback cost - £21,964 (thats all cars, not EVs).

So...yeah. I think there is scope for a lower range smaller battery model 3. It could eat up the Nissan Lead and Mini market, which combined sell the same number of units in the UK as the model 3.

Apparently the MG4 is being sold at a profit by SAIC. It uses a cheap low performance battery, but maybe thats all people really need?

I know someone with the MG and they are very happy with it. The owner is my preferred solar installer, so definitely not easily impressed, and understands the tech. He charges via a myEnergi Zappi charger run from his home solar/battery and gets very good results.

Why would you assume that Tesla plans to reduce prices of the Model 3 by using "slight tweaks or software limiters"? That makes no sense, Tesla is on a mission to reduce the cost of EV's in fundamental ways by making the cars easier to manufacture and with lower assembly costs and lower parts and raw materials costs. This requires optimizing the engineering of both the production lines and the car. The goal will be to have the same functionality, the same reliability and longevity, the same size, at a significantly lower cost, thus driving the adoption of EV's into ever larger market segments.

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside. Sure, raw materials can go down by 15% or so, but raw materials are a small fraction of the total cost to produce. You still have four wheels, and you still have to install, inflate and balance four tires and wheels. You still have four seats, carpeting, a brake and an accelerator, sun visors, door handles, air bags, parking brake, etc. etc. etc. Costs do not even come close to scaling with size. The Model 3 is at a sweet spot in so many ways even if a smaller car has some advantages in the middle of European cities. Making a small city car will happen, the question is whether now is the right time or not. The Model 3 is a greatly under-utilized asset of Tesla and it costs too much to build. Tesla is going to fix that, and it will dramatically expand the addressable market and the profits from Model 3.

If it cannot fit into the available parking spaces you simply cannot buy it, even if you can afford it.

My guesstimate is that about 1/3 of Europeans need their car to fit into places that will only accomodate a Golf-sized vehicle, and that length is the most critical factor (4.2m). In contrast for that market the Passat-sized vehicles (4.7m) are simply too big, likewise the Tesla model 3/Y at 4.7m. The extra 50cm really makes all the difference.

The Golf/etc-sized vehicles are the most common vehicles on European roads, including the motorway network. It is not just because of cost, indeed a fully-specced Golf is not cheap (48k GBP = 59k USD). And let's drop the abuse of the term "city car" for such a vehicle. A city car is something else, much smaller - a Golf/etc is a full-sized family car capable of driving at 100mph or more with four adults all day long with no stress.

I fully understand the manufacturing cost issues, and agree with you. But the size aspect really does matter for an enormous part of the market around the world outside USA.

So I'll be very happy if the 3 comes down in price, but at some point a smaller vehicle needs to enter the range - the 2/Z. When is up to management.

 

[gtrplyr1]

I was gonna correct you on the glass roof as it was put into every m3 to make assembly easier for entrance from the top .... but with structural pack and seats-on-pack Tesla won't need the glassroof for assembly reasons ... mhhhh

Yeah ... I knew that. (not really but I'm feeling quite smart this morning)

 

[StealthP3D]

For continued growth no doubt need a smaller car.
They hinted at one, coming out of China a while ago, then seemed to backtrack a bit likely due to battery constrained production.

No, to grow from 2% of the market they need lower priced cars, they don't need to be smaller. That will happen, but smaller is not necessary to continue growing.

 

[StealthP3D]

I think the point being made is different. Here in the UK, small cars are a desirable thing because our roads are so narrow. We dont want a smaller car because we think that will save us money. We want a smaller car because a smaller car is WAY more practical than a bigger one.
I really think a lot of people in the US just do not realize how narrow UK and other European countries roads can be. We laid out all our cities in a time of horseback transport, and it shows.

I spent £73k on a fully loaded performance model Y. If there had been an option to shrink that same car by 10% in every direction, I'd have jumped at it. Even paid extra.

You missed my point. I'm not saying no one wants or needs a smaller car, or that it's only about a lower price, I'm saying that it's not necessary for Tesla to enter a lower profit margin market at this point in time. It will come in due time. I fully understand that Tesla's 4 models do not cover 100% of the market's needs, I'm saying they don't need to cover every market need, they can pick and choose which market segments it makes sense to sell into.

 

[Artful Dodger]

Joe Tegtmeyer said yesterday that he would release a deep-dive video on the SACMI press technology

Battery Cathode Plant & SACMI Machinery Discussion! 31 January 2023 Giga Texas Updates

 

[StealthP3D]

If it cannot fit into the available parking spaces you simply cannot buy it, even if you can afford it.

How high of a global market share do you think Tesla can reach without selling to people that need a car smaller than a VW Golf? They are at 2% global market share. I think they could easily double or triple that without even approaching the need to address that market segment. Tesla will do what's best for the mission and Tesla shareholders, not enter market segments too early simply because those market segments exist.

I wouldn't be hammering on this single point so hard if it were not so apparent that people are forgetting how to think logically. Tesla doesn't do things "because it's there", they do things because it makes sense to do them.

 

[jerry33]

You missed my point. I'm not saying no one wants or needs a smaller car, or that it's only about a lower price, I'm saying that it's not necessary for Tesla to enter a lower profit margin market at this point in time. It will come in due time. I fully understand that Tesla's 4 models do not cover 100% of the market's needs, I'm saying they don't need to cover every market need, they can pick and choose which market segments it makes sense to sell into.

I think what people are saying is that it doesn't have to be a low margin car, just a small car. There's two kinds of global small car markets, one is price sensitive--agreed that Tesla doesn't need to enter this market at this time, the other is premium small car--this is what many folks want--a really good car that fits where they drive and park.

 

[AndrewZ]

The 3/Y lineup will be forced into a lower margin market on this trajectory just by the sheer numbers being produced and that need to be moved, as has already happened once this year so far, and it will have further implications. We can hold up Tesla as 2% of the global market while auto media is simultaneously holding up the Model Y as #4 and Model 3 as #7 top-selling vehicles in the world.

I fully expect more price cuts and/or incentives etc especially if interest rates stay as high as central banks are claiming but the market isn't believing.

 

[Skryll]

[.model2..]

No glass roof

[...]

What do you propose instead? Remember the heavy automation relies on that the roof is open to install the seats through before installing the glass to close it. Metal or plastic panels?

 

[M|S|M MYP]

Yeah ... I knew that. (not really but I'm feeling quite smart this morning)

You must have stayed at a holiday inn last night

 

[ZeApelido]

I don't know how they're going to dump unsold cars into the ocean from here.

https://twitter.com/x/status/1620481619432968193

 

[StealthP3D]

I think what people are saying is that it doesn't have to be a low margin car, just a small car. There's two kinds of global small car markets, one is price sensitive--agreed that Tesla doesn't need to enter this market at this time, the other is premium small car--this is what many folks want--a really good car that fits where they drive and park.

Oh, a premium small car. That will happen too but it's likely further away than a lower cost small car. Tesla's goal is not to cover as many market segments as possible, as soon as possible, they exist to carry out their mission in the optimum order, on a timeline that makes the most sense.

I've been very impressed with Tesla's restraint in entering new market segments just because some people, who have no auto manufacturing experience, think they know better than those who do. Tesla enters new market segments deliberately and in a manner that lowers risk for the company and shareholders while maximizing returns. That's what I want.

 

[loquitur]

For those following the TSLA "funding secured" trial, the current testimony
is by finance professor Hartzmark, who is trying to explain to the jury about
how TSLA options went haywire that day and the next few. To wit, medium/long-term
straddles collapsed, while short-term options didn't change much, affecting
plaintiff Littleton.

The expert witness is explaining Black-Scholes and implied volatility now
-- you can read the 362 page (!) report here, for which he charged ~$350,000
just for this work.

https://www.courtlistener.com/docket/7643790/291/1/in-re-tesla-inc-securities-litigation/

I'm not present in the courtroom now, but as a reminder you can listen to all
this at Chen, Edward M. [EMC] | United States District Court, Northern District of California.

During cross-examination now transpiring, there is a challenge to a "but for"
methodology (requires jury assessment) vs. one based upon actual prices using
different input assumptions. There is a further challenge to the Black-Scholes model
which Hartzmark acknowledges because he wrote a number of papers about such.

Naturally, the defendant has brought up that for every buyer there is a seller, so
whoever lost funds during the class period is balanced by those who gained.
What might this be, "anti-damages"?

Just before the morning break, defense zapped the expert with an amusing gotcha question ...
To address the expert's notion that options trading is "not gambling, but more like insurance",
they asked (paraphrasing): "Isn't it true that you once wrote a book about poker playing
under a pseudonym?"

 

[UkNorthampton]

What do you propose instead? Remember the heavy automation relies on that the roof is open to install the seats through before installing the glass to close it. Metal or plastic panels?

Seats attached to structural battery pack is what is currently being used on 4680 Model Y. Same (edit) could be done for 3.

For non-structural, I thought I'd seen videos of seats going in from the side at an angle. Not sure which model(s). Interesting to see how much of the interior could be floorpan mounted.

 

[UrsS]

I was gonna correct you on the glass roof as it was put into every m3 to make assembly easier for entrance from the top .... but with structural pack and seats-on-pack Tesla won't need the glassroof for assembly reasons ... mhhhh

I'm suspicious that the glass roof is actually cheaper to make and install than a metal roof. The metal roof has to be welded in, painted and a headliner installed after the roof is in the car. A glass roof just needs to be glued in - 1 step for glass - about 3 much more elaborated steps for metal roof.