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

[-=buzz=-]

Berlin update:
Apparently last week Berlin was down for maintenance and 'upgrades' according to the regular filming youtubers.
This weekend the first blue Ys and a couple of front castings were spotted..!

 

[MikeAtkinson]

Great analysis, but it doesn’t take into account the downside risk that Tesla will suddenly stop performing at their great historical level. For instance, Cybertruck success is not a given because they have novel difficult manufacturing processes to figure out. 4680 success is not a given, they have low yields still and it isn’t a guarantee that they will solve this. FSD has never been done before and it is possible it can’t be done without a lot more expensive car hardware and years more training. ETC. Now, I have been watching Tesla for over ten years and I have faith that Tesla will rise to these challenges, but a more risk adverse person who doesn’t know Tesla could look at these risks and say, wow, there‘s A LOT of uncertainty here and they could be right, which is reflected in the stock price level.

My point being that the current stock price is a reflection of this external uncertainty. From my perspective, it just means that it is under valued and the stock will rise as these uncertainties get resolved: Cybertruck production and profitability, 4680 production and yields, lithium supply and refining capacity, FSD, China demand, US recession or not, interest rate hikes, semi factory construction, Reno factory expansion, etc. As each of these get addressed, I expect the stock price to melt up nicely.

Perhaps I have not taken downside risk into account enough.

However, the great thing about investing in TSLA is that Tesla is followed with a devotion unlike other companies (except possibly Apple). People literally count the number of cars coming off the production line, factory completion %, megapack production rate, etc. They also tease out scraps of information about progress towards future product developments. We also have a CEO that provides much more insight into internal workings of the company than the typical CEO.

A regards to the specifics.

4680 success is highly likely now, the ramp has been slower than hoped for, but Tesla are ramping. They also seem confident both in words and deeds (a new factory). There are multiple ways of solving the remaining issues with calendaring, throughput and yields. Once solved they can be deployed to multiple lines in parallel (by mid-year 4 lines with 4 more in commisioning).

FSD works pretty well now, it could probably already be used for a Robotaxi service in a geofenced area. There is steady improvement, if slower than many hope for. It really does not matter much if FSD is fully solved this year, next year, or the year after. Tesla are recognising most of the revenue for each sale, and it is profitable. Dedicated Robotaxis cannot be produced in volume for at least 3 years. The competition Cruise, Waymo are making even slower progress and have solutions that do not scale. Hardware 4 is coming, I have seen few if any disengagements were increased camera resolution would have improved things. Training and data are increasing, the big unknown is NN architecture, V11 has proved difficult to improve on existing, future architecture changes are likely to be even harder to get to a state where they improve on the NN in use at that time.

For Cybertruck they might have production hell, but I'm pretty confident they can overcome it, just like they did for Model 3. Tesla will have a pretty good idea of BoM cost now and with a large backlog they have the ability to raise prices if necessary. Meaningful competition seems at least 4 years away, probably more like 6 or 7 years away. Major risks are slower than expected ramp and lower gross margins than hoped for.

The difference in knowledge and insight into Tesla between us and the ordinary investor or analyst (who covers dozens of companies) or fund manager is that we have deeper knowledge of the company and are much better than the casual investor in spotting FUD. The collective wisom in TMC is incredible.

 

[Max Plaid]

In the Netherlands you can qualify for a small truck licence quite easy if you already have a normal license. It’s the C1 license for vehicles from 3500 kgs to 7500kgs.

I have it, took me a few lessons and an exam.

You’re in Belgium I believe, don’t you have something similar?

Probably, but my point was that I've never heard of the CT being considered a "safety risk" in the EU, which was what the OP opined

 

[petit_bateau]

Probably, but my point was that I've never heard of the CT being considered a "safety risk" in the EU, which was what the OP opined

I have also heard it said in a number of places re Euro imports of CT.

The specific issue being pointed out was how it would fare in the NCAP tests for impacts with pedestrians/cyclists ("vulnerable road users") due to the sharp pointy corners. Whether Tesla have any plans to bring CT to Europe I don't know.

NCAP itself is not the same as vehicle type approval (aka homologation) but bad NCAPs can have sales consequences. Also I have no idea myself whether the criticism of the sharp pointy corners has any merit, indeed some of them are quite obviously faceted for aero reasons. But I've definitely seen people pointing this out as an issue, and I don't think they were FUD-sprayers.

Euro NCAP - Wikipedia

en.wikipedia.org

Type approval - I think if one digs into the detail there are similar pedestrian etc considerations to NCAP. I'm sure others here can give chapter & verse.

Motor vehicle type approval - Wikipedia

en.wikipedia.org

 

[WarpedOne]

I don't think they were FUD-sprayers.

FUD-sprayers or just stupid ... your pick.
Pedestrian safety is not tested all around the vehicle, only frontal. Where CT is no worse than any other pickup monstrosity.

You think you'll be better off being hit by this?

Official Toyota Hilux 2016 safety rating

Euro NCAP safety rating of the Toyota Hilux 2016: detailed results, crash test pictures, videos and comments from experts

www.euroncap.com

Best pedestrian safety is automatic braking and avoidance. Vehicle doesn't even hit you.

 

[jamaatta]

FUD or not, it's really widespread "truth" in Europe. There's tons of articles about "issue". I'm quite confident that one day we'll have CT (or "Euro-CT) in Europe too.

I have had a reservation since 5/2020.

 

[Speedr117]

Profits Secured!​

If you look at the lease deal from Tesla on a Model 3, it's as follows:
$4,500 down
$349/mo = $12,564
Total paid by lessee: $17,064

The IRA has a $4,500 rebate for used cars that are below $25,000, so we know what the car will be worth at the very least when returned: $24,999 (since everyone and their brother would buy a 30,000 mile, 3 year old Model 3 for $20,500).

This is what the lease looks like to Tesla:
Car Cost: $43,490
Resale: $24,999
Amount paid by lessee: $17,064
Amount not covered: $4,185 ($1,427 difference, plus rough approximation of finance costs of $2,758)

BUT, there's the IRA, which gives Tesla $7,500 since it's the first "owner" of the car via commercial arrangement.
IRA: $7,500
Amount not covered: $4,185
Profit: $3,315

That's 7.5% PROFIT on TOP of the normal profit the car makes.


Would love others to check my work and provide feedback!

 

[Singuy]

Profits Secured!​

If you look at the lease deal from Tesla on a Model 3, it's as follows:
$4,500 down
$349/mo = $12,564
Total paid by lessee: $17,064

The IRA has a $4,500 rebate for used cars that are below $25,000, so we know what the car will be worth at the very least when returned: $24,999 (since everyone and their brother would buy a 30,000 mile, 3 year old Model 3 for $20,500).

This is what the lease looks like to Tesla:
Car Cost: $43,490
Resale: $24,999
Amount paid by lessee: $17,064
Amount not covered: $4,185 ($1,427 difference, plus rough approximation of finance costs of $2,758)

BUT, there's the IRA, which gives Tesla $7,500 since it's the first "owner" of the car via commercial arrangement.
IRA: $7,500
Amount not covered: $4,185
Profit: $3,315

That's 7.5% PROFIT on TOP of the normal profit the car makes.


Would love others to check my work and provide feedback!

Profit secured, until battery material stipulations kick in making sr+ ineligible.

 

[trayloader]

Unless they make a separate version with a thin, soft front end, I don't see how it can pass EU pedestrian safety. US pick up trucks comply with heavy truck standards rather than passenger car standards as in the EU, That's my understanding anyway, happy to be corrected by anyone who knows better.

Yes correct. I would guess they mimic the DeLorean way, in bringing in soft plastics to the hood, rear, fenders and bumper.
Hmmm, that leaves practically nothing for the stainless steel in the EU.

Homologation will be hard with the hard surfaces.

 

[Speedr117]

Profit secured, until battery material stipulations kick in making sr+ ineligible.

Good point, but then the price may go up at that point.


If nothing changes, that after March 1st, it should be:
IRA: $3,750
IRA Battery assembly of $10/KW (* 60 KW) $600
Total IRA: $4,350
Amount not covered: $4,185

Profit: $165

So just their normal car profit then. It almost works out too perfect, like they planned the lease for when the rules change after March 1st, with an additional profit kicker in the meantime!

 

[Singuy]

Good point, but then the price may go up at that point.


If nothing changes, that after March 1st, it should be:
IRA: $3,750
IRA Battery assembly of $10/KW (* 60 KW) $600
Total IRA: $4,350
Amount not covered: $4,185

Profit: $165

So just their normal car profit then. It almost works out too perfect, like they planned the lease for when the rules change after March 1st, with an additional profit kicker in the meantime!

Considering stellantis and gm got the IRS to expand the eligible SUVs, I have a feeling the battery stipulation may be relaxed as well. With the restrictions from the rough draft, I believe only half of Tesla's lineup are eligible while no other products on the market are. Correct me if I'm wrong.

 

[Speedr117]

Considering stellantis and gm got the IRS to expand the eligible SUVs, I have a feeling the battery stipulation may be relaxed as well. With the restrictions from the rough draft, I believe only half of Tesla's lineup are eligible while no other products on the market are. Correct me if I'm wrong.

My understanding is $3,750 is for the vehicle and battery pack, and $3,750 is for the battery, with material sourcing stipulations.

Completely agree that March will either come and go without a ruling, or they'll figure something out to give legacy (and Tesla) a little longer to get the correct sourcing implemented.

 

[unk45]

We've torn down over 100 cars (Here are Tesla advantages) | Cory Steuben | Brighter with Herbert (33 min ago)

This is interesting and informative but...the major logical weaknesses of Munro in general and Cory, are first, that relentless US Midwestern market view. The rest of the world is not very visible to them. From pure manufacturing process I find them always informative. The second issue is that they do not actually understand technology well enough to understand the fundamental interplay between factory operation, raw materials and vehicle automation.

When accepting those limitations they are very informative about the eventual deleterious consequences of Lean, and the conflicting goals of OEM and Tier one and Tier two interests.

I am amazed that they do see enormous Tesla advantages while missing what may be the biggest ones.

 

[Unpilot]

that relentless US Midwestern market view.

Please explain this.

 

[trayloader]

Since there has been some discussion here on Cybertruck battery, I will share this here

Last week I went in a bit of a dive to try to figure it's layout, the initial conclusion I arrived on the link bellow is that I had no idea how they do it, because my initial assumption that the pack would have a single layer of cells, actually, Tesla would loved for that to be true, but it won't happen until they can at least double 4680 energy density, by that time we will have electric long range airplanes

So on my wrong conclusion on the link bellow and by some suggestions, I took one of the exoskeleton pictures and overlaid on CT dimensions

Turns out they can do a double layer pack, will need some clever engineering on how to connect them on the space available and in a way that is good assembly wise, Rivian did in a nice way, but their cooling approach isn't that good, and since Tesla pushes cells way harder, that won't happen

So the TDLR is that there is room for roughly 250 kWh assuming 4680 cells doesn't have higher energy storage capability with the 4680 V2s and DBE solved, which honestly from last comments, it's solved, and with a big maybe we might see over 500 miles, I bet Elon would love to have it over 520 miles just to say they have more range than Lucid, but in a truck lol

If that is wrong and they will only do or only have space for a single layer pack, prepare to be disappointed with Cybertruck range, less than 350 miles, but I doubt that's the case, they knew what pack size they needed on the really early stage of it's design

https://www.reddit.com/r/Tesla_Charts/comments/10ujh5x

Good observation!

here´s my take on this: Tesla could potentially integrate TWO Battery packs, and they are testing this setup at this point.

However the "sexiness" of the product at this point is in severe danger.

Too many compromises are being made at this point, away from the sleek OG appearance.
As You can see the new design is much more "sunken in" with a less V-Shape top to bottom.
Smaller window line and much more "belly"= the lower waistline at the side coming from the bottom is much thicker and accentuated (twin packs anyone? changing the whole impression of the vehicle.
Hopefully they can bring back the OG character and not the "boat looks", but that might be mitigated by bigger wheels, a higher ride setting
and more outwards placed wheels.

 

[ZeApelido]

Probably, but my point was that I've never heard of the CT being considered a "safety risk" in the EU, which was what the OP opined

Cybertruck is an EU safety risk for fear of being overwhelmed by American exceptionalism.

Dangerous things Cybertruck imports could bring over:

1) New processed foods
2) Obesity
3) Loose pants

 

[MartinAustin]

OK well, most of the market appears to be in the red, pre-market, but not TSLA. Overhang Removal secured!!!

 

[Baumisch]

However the "sexiness" of the product at this point is in severe danger.

All true, but why is noone talking about the windshieldwiper - the hole appeal to me dies with this thing on. Without it the lines are slick and all, but with any iteration I saw so far it was just bad - less bad now with the narrow one than the enormous one from the beginning but still just bad.

Am I alone with this view?

 

[2daMoon]

Tesla getting >100% Margin on batteries is on the horizon thanks to the IRA subsidies. Connecting the Dots provides the details.

 

[JRP3]

Really annoying when people read your post and want to argue details rather than talk about the main point.

It was an irrelevant "detail" to include and in no way countered my point.