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

[NickInLab]

So Tesla is raising prices again. Hey Tesla you are going to learn something real quick, the consumer is a quick learner. Train them and they sit on the sidelines till the next big price cut.

In all seriousness, this is exactly why Tesla was smart to make one giant OMG-the-sky-is-falling price cut (even if it scares the bejezus out of wall street and gives FUDsters ammo) instead of a series of smaller price cuts.

Tesla is training customers that this is their one chance to get a discount. They better act fast and take this offer they can't refuse. It creates a sense of urgency, and buyers pile in. As inventory starts to shrink, the FOMO really kicks in and people on the fence decide to buy today instead of next week. Now, you can slowly walk the prices back up (which adds to the sense of urgency and creates more demand).

Conversely, a series of small price cuts is a self-fulfilling prophesy for low demand: Customers on the fence see the first cut and think "hmm... tempting, but maybe I'm not quite ready for a new car right now". So you pull the next demand lever a week later with another small cut. Those fence sitters now think "The price is right, but maybe Tesla will offer an even better deal in a few weeks... I better wait". After the third cut, many of the same people will continue to not buy, thinking "Maybe I'll get an even better deal if I hold out a couple more weeks". You're training customers that this great deal will always be available if they want to wait a little longer.

Remember, one of the things that impacts the shape of a demand curve is customers' expectations about the future.

 

[StealthP3D]

Another anecdotal data point: a good friend of ours is the last holdout in a small group of friends to buy a Tesla. He owned a Leaf, and was dead set against buying a Tesla, partially because of price, partially because of negative feelings towards Elon, partly wanting to be different.

Anyway, yesterday he bought a Model Y. The price drop was all he needed to overcome his objections.

It turns out, price matters.

Very true. I think over half of the anti-Tesla sentiment is not due to politics or Twitter, but rather economics. People who want things they can't afford tend to take on a "sour grapes" attitude, you know the fox that couldn't eat the grapes because the vine was too high determined they were probably sour anyway. As soon as they can reach the grapes, they will eat them and tell everyone how sweet and delicious they are!

I expect project Highland will allow Tesla to sell the entry level Model 3 for less than $35K with good margins. That will cause it to sell like crazy to people who have to commute from the suburbs to the city for work. Last week I bought a Long Range Model 3 with 69K miles for $28K and it's an amazing car for the price with 303 miles of range after 5 years and great performance/economy. It has a couple of barely visible door dings but nothing that prevents it from looking new at a short distance or driving like a new car. The seller bought it from a family member a month previous and was already excited to upgrade to a new Model Y.

The number of people who don't yet know how affordable and fulfilling a Tesla is for their transportation needs is still staggering. Even in the current market environment demand is greater than supply. Auto sales are supposed to be cyclical, but Tesla continues to increase sales while other brands keep shrinking.

 

[unk45]

For All those Tesla owners who think the prices have dropped so massively, I suggest pricing the same specifications as you bought in 2018 or later, then compare with the price today.
For example, replicating my Model 3 Perfomance that I bough on September 2018 with the closest match available today yields the following, pre tax prices:
2018 $73, 109 2023 $71,990
In 2018 I was eligible for the US Federal tax credit. In 2023 I am eligible for nothing at all. In 2018 I was lucky enough to be one of those M3P buyers who received free lifetime Supercharging. In 2023 zip.

The low prices and generous IRA benefits are invaluable for those who quality. If people do not choose their own colors and options, those cheaper prices are real.
2023 Model S Plaid by contrast is $8720 cheaper now than it was in September 2021 when I took delivery of mine, both pretax, of course.

Just a little comparison suggests that the efficiencies in production cost will end out affecting Gross Margin much less than some of the recent calculations have suggested. Certainly, as is obvious, the model mix is shifting quite drastically in favor of Model Y, which as we may recall is less expensive to produce than the Model 3 although the soon to released Highland might change that. Still Model Y has higher pricing and greater popularity.

Obviously we do not yet know how project Highland will improve margins, but we do know the production costs are dropping on both Model 3 and Model Y, if for no reason other than increased production levels.

We also see significant recovery in Chinese domestic economic conditions and better than expected conditions in most Tesla markets. That is even without the US IRA and other incentives around the world.

We may have better clues on Investor Day, but without a doubt I am more optimistic for TSLA than I have been for some time.

 

[lascavarian]

So what does that mean? You could probably say 24% of single equity sales were TSLA as well?

My interpretation as an idiotis that individuals are piling into the stock rather than (or ahead of) institutional buyers. I am keying off “single equity”. Macro influences tend (my opinion) to manifest as institutional trading or fund flow.

I don’t see this as a huge thing but it is confirmation that there is a healthy interest in TSLA and individuals want it in their portfolio. YMMV

Love to hear what other think.

 

[jw934]

Model Y, which as we may recall is less expensive to produce than the Model 3

That was the case back in 2020, but is no longer true.

“third, our vehicle mix over the last year has moved more heavily toward Model Y, which carries a slight cost premium to Model 3.”

Source Q4 call

 

[Ogre]

For All those Tesla owners who think the prices have dropped so massively, I suggest pricing the same specifications as you bought in 2018 or later, then compare with the price today.

My early 2021 MYLR was $53k with all the options (RED!!). Today it would cost $57k. As far as price “Cuts” go, it’s kind of a bust.

 

[EverettRuess]

Super Bowl is the cause for today's weakness. No facts to back this up. Ad and Rupert is my guess.

 

[bkp_duke]

Super Bowl is the cause for today's weakness. No facts to back this up. Ad and Rupert is my guess.

More likely after a 100%+ run-up the stock needs to find new support.

 

[Ogre]

Super Bowl is the cause for today's weakness. No facts to back this up. Ad and Rupert is my guess.

I think we just bounced off some resistance. Lots of people taking profits after a double. Look a couple posts up at TrendTrader007’s post. Though he didn’t sell shares, selling options has a secondary impact on the SP as well. I think a significant number of short term traders would have been quite happy with that 45 day double and walked away to look for another opportunity without a second thought.

 

[SOULPEDL]

Super Bowl is the cause for today's weakness. No facts to back this up. Ad and Rupert is my guess.

Or the banks are freaking out that Max Pain is still only 165 this week. That's a bit of a gap. Hit'em before they wake up today.

(Edit: Zoomed out even better.)

 

[Ogre]

Or the banks are freaking out that Max Pain is still only 165 this week. That's a bit of a gap. Hit'em before they wake up today.

(Edit: Zoomed out even better.)

View attachment 906708

I think they have a fight on their hands if they plan on getting the SP down to 165 by Friday. Might happen, I’ve seen stranger things, but I think a lot of people are worried they missed the bus and will be piling in on the way back down fighting this.

 

[StarFoxisDown!]

I think they have a fight on their hands if they plan on getting the SP down to 165 by Friday. Might happen, I’ve seen stranger things, but I think a lot of people are worried they missed the bus and will be piling in on the way back down fighting this.

Will entirely depend on the CPI number tomorrow. The volume chart for TSLA options has progressively gotten more bullish as the morning has gone on.

I personally think that even if the CPI numbers come in good, we're still looking at a sell the news week for the macros and for TSLA. A nice healthy consolidation and pullback would set the market up for a healthier run over the next couple of months.

 

[Featsbeyond50]

Will entirely depend on the CPI number tomorrow. The volume chart for TSLA options has progressively gotten more bullish as the morning has gone on.

I got NY Steak this weekend from Costco for 7.99 so CPI is a lock to be good.

 

[AndrewZ]

Jobless claims too, I think the Fed is mostly focused on PCE and the labour market

 

[DragonWatch]

I've never heard of child flag bearers during the Civil War. Drummers, buglers, powder monkeys, couriers, yes.

Fair point. I too, following your input and found the same positions held by what I called boys carrying flags during the Civil War on the intranet. From my memory, powder monkeys is a new term to me.

To also be fair, I did not consider myself a man until the age of 27, surly not eight years old as was sighted the youngest enlisted US soldier during the civil war. I enlisted at 19, and later got married ~ fifty years ago on 30Dec1973 at the age of 23. So, I believe our vision of a boy is slightly different. Also, I did not get to vote until I was over twenty-one because the timing of the 26th Amendment and life.

Then there is the real history. If we did not live it, we cannot speak truth to it. Only, and only what we have read, watched on TV/movie, viewed in museums, learned in school, or lived is our truth. War exceeds hell. I have never experienced war even though I enlisted to serve in Vietnam.

Omissions are more damning.

Today, how many headlines do we read where places providing shelter to women, children, and the aged are deliberately targeted? Today, how many charging infantry/cavalry or battalion size units charge with their units flag? Today, how many children wear orange traffic cones? Today, and today only (to date) how many children eight years old, without parents with them have you known to have been run over or hit by any self driving vehicle?

Now, if you know anything about a battlefield (experienced or per John Wayne) do you think; a thirty mile an hour M1-FSD tank will come to a sudden halt on a battlefield at the sight of a child or adult? Now, to be fair, I grew up watching John Wayne. And the first movies I remember paying for, cost $0.25. And, a high school buddy died in Vietnam about a year before I enlisted. And, when I enlisted, the US Army paid buck naked boys $120 +/- a month to die for their country. Todays private with no experience in life makes more in a month than we did all year. Back to my 30 mph M1-FSD tank stopping for a child; that tank and any (military) other stopping vehicles just became a target. A very lucrative target! That might be called an ambush.

From my life’s experience/education these are my thoughts, and my thoughts alone ~ not safe for consumption by humans. I have read about child size cones being run over, and I have talked to a self-proclaimed FSD programmer.

FYI ~ My first three year enlistment duties were as the hired gun and typist for my assigned chaplain. Later in life as an officer ~ had a tracked launcher - right lateral (steering) locked up and wound up on two cars (crushed like a bug); fired a missile that the gyro failed, thus crashing into one of the white sands dunes (got my butt chewed out, until cleaned for mechanical failure).

Full Self Driving is a very big ticket item ~ not just for cars.

Cheers

 

[SmokyPeat]

Fair point. I too, following your input and found the same positions held by what I called boys carrying flags during the Civil War on the intranet. From my memory, powder monkeys is a new term to me.

To also be fair, I did not consider myself a man until the age of 27, surly not eight years old as was sighted the youngest enlisted US soldier during the civil war. I enlisted at 19, and later got married ~ fifty years ago on 30Dec1973 at the age of 23. So, I believe our vision of a boy is slightly different. Also, I did not get to vote until I was over twenty-one because the timing of the 26th Amendment and life.

Then there is the real history. If we did not live it, we cannot speak truth to it. Only, and only what we have read, watched on TV/movie, viewed in museums, learned in school, or lived is our truth. War exceeds hell. I have never experienced war even though I enlisted to serve in Vietnam.

Omissions are more damning.

Today, how many headlines do we read where places providing shelter to women, children, and the aged are deliberately targeted? Today, how many charging infantry/cavalry or battalion size units charge with their units flag? Today, how many children wear orange traffic cones? Today, and today only (to date) how many children eight years old, without parents with them have you known to have been run over or hit by any self driving vehicle?

Now, if you know anything about a battlefield (experienced or per John Wayne) do you think; a thirty mile an hour M1-FSD tank will come to a sudden halt on a battlefield at the sight of a child or adult? Now, to be fair, I grew up watching John Wayne. And the first movies I remember paying for, cost $0.25. And, a high school buddy died in Vietnam about a year before I enlisted. And, when I enlisted, the US Army paid buck naked boys $120 +/- a month to die for their country. Todays private with no experience in life makes more in a month than we did all year. Back to my 30 mph M1-FSD tank stopping for a child; that tank and any (military) other stopping vehicles just became a target. A very lucrative target! That might be called an ambush.

From my life’s experience/education these are my thoughts, and my thoughts alone ~ not safe for consumption by humans. I have read about child size cones being run over, and I have talked to a self-proclaimed FSD programmer.

FYI ~ My first three year enlistment duties were as the hired gun and typist for my assigned chaplain. Later in life as an officer ~ had a tracked launcher - right lateral (steering) locked up and wound up on two cars (crushed like a bug); fired a missile that the gyro failed, thus crashing into one of the white sands dunes (got my butt chewed out, until cleaned for mechanical failure).

Full Self Driving is a very big ticket item ~ not just for cars.

Cheers

Powder monkeys were often boys on naval vessels that brought the gunpowder to the guns. Their short stature gave them protection below the gunwhales.

 

[Curt Renz]

"Tesla is still very cheap, says Future Fund's Gary Black"​

CNBC - Today:​

 

[UrsS]

For All those Tesla owners who think the prices have dropped so massively, I suggest pricing the same specifications as you bought in 2018 or later, then compare with the price today.
For example, replicating my Model 3 Perfomance that I bough on September 2018 with the closest match available today yields the following, pre tax prices:
2018 $73, 109 2023 $71,990

Not so fast: How about inflation? According to this CPI Inflation Calculator the price you paid in 2018 was about $86,000 in today's Dollars.

 

[M|S|M MYP]

Sadly, If what Joe said is true, then… likely. Stonk market claims to be about long term, but is short term SP movements are usually about short term gratification. If it’s not happening in the next couple quarters… fuhgheddabaatit, doesn’t exist.

I am sure they will translate it as "another EM pipe dream that will never be delivered"

 

[DragonWatch]

Powder monkeys were often boys on naval vessels that brought the gunpowder to the guns. Their short stature gave them protection below the gunwhales.

Thank you ~ my focus is more land oriented. Love kayaking though.

This is good to know the why of the term.

Cheers