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

[Hiline]

Just read an article on bloomberg about Tesla. The article says the F-150 electric is a sign that Tesla has gotten stiffer competition. 2 minutes of research into the F-150 Lightning shows that the 320-mile range version goes for at least $80k, that the 2023 is no longer available for retail order, and that Ford had to halt its production due to a battery fire during testing. If this is the competition, Tesla has little to worry about. A Cybertruck with a 300+ range coming in 2024 at 50k and with enough volume to meet demand will make Tesla laugh all the way to the bank.

 

[EVMeister]

Just read an article on bloomberg about Tesla. The article says the F-150 electric is a sign that Tesla has gotten stiffer competition. 2 minutes of research into the F-150 Lightning shows that the 320-mile range version goes for at least $80k, that the 2023 is no longer available for retail order, and that Ford had to halt its production due to a battery fire during testing. If this is the competition, Tesla has little to worry about. A Cybertruck with a 300+ range coming in 2024 at 50k and with enough volume to meet demand will make Tesla laugh all the way to the bank.

Ah, I see the problem. The two highlighted parts don't go together.

 

[M|S|M MYP]

How will Tesla proceed if China does not let them build a less expensive car? I think a factory in eastern Europe. Slovakia builds some of the Land Rover models we get in the U.S.

If they can't build in China for the EU then a lower income EU member is perhaps the best choice.


Is Troy required to only post the literal truth?

Any South American residents here that feel there is a market for a half million $25K Teslas?

Im not from South America but i suspect a $25k Tesla would sell pretty well in almost every continent.

 

[jkirkwood001]

ChatGPT (or at least the one available to the public) doesn't have any information past 2021 if I recall correctly. It doesn't have current Internet access, just the stuff prior to 2022, so it couldn't have answered your inquiry.

September 2021. Read my full OP.

 

[Artful Dodger]

Tesla estimates that $125 - $150B of remaining CapEx is required to get to 20M veh/yr and 1 TWh of scale. Why isn’t this getting more attention?

Why did Tesla give exclusive access to Wall St on Investor Day?​

Yeah, yeah, I'm gettin' to it... Mostly, because its really two parts, and requires some analysis.

So first, your statement that Telsa could easily earn the ~$150B remaining CapEx is sound. On vehicles alone, if we assume $30K ASP, 20M Units, and 20% g.m. then that's already $120B in gross profit (likely falls mostly to the bottom line if Tesla can remain debt-free and continues funding growth from FCF.

The second part of this is why did Tesla give exclusive access to Wall St on Investor Day? Is Tesla planning to borrow money to get to their stated targets by 2030? Could this be bonds, equity, or private capital? Was retail (ie: Gali) punted b/c they don't have $150B in their back pocket (and can't keep a secret when PATREON is at stake?) So many questions:

Well, we just don't know. But we can do a simple projection of CapEx requirements based on exponential growth in 3 steps (capacity built-out in stages from the existing 2M/yr, to 8M/yr, to arrive finally 20M/yr in time for 2030):

1. the S3XYplants will expand from 2M/yr to 4M/yr out of FCF, while continuing to toss off 10% profit:
   1. ASP $40k, g.m. 20%, 3m/yr avg = $24B/yr FCF or $168B over 7 years
   2. discounted cash flow at 4% (Tesla's 10-yr borrowing rate) values current FCF at $127B) which is already enough FCF to fund Tesla's growth plans
2. Gen 3 (Giga Monterrey + 1 other?) will go from 0 to 4M/yr and cost $10B over 2 yrs ($20B in 4 yrs?)
3. it's already obvious that existing S3XY factories produce enough FCF to fully fund Gen 3 w/o incurring addtional debt (so why was Wall St. given front row seats on I.D.?)
4. 2nd wave Gen 3 plant (yet-to-be-announced) will go from 4 to 8M/yr and cost another $10B to $20B
   1. ASP $25k, g.m. 20%, 4m/yr avg = $20B/yr FCF or $100B over 5 years
   2. discounted cash flow at 4% (Tesla's 10-yr borrowing rate) values current FCF at $82B)
5. 1st wave Gen 3 will easily pay for 2nd wave out of their FCF (how does debt figure in?)
6. Telsa generates $210B in discounted FCF out of just S3XY plus 1st wave Gen 3 by 2030. This is easily enough of a business case to justify any loans that Tesla may choose to pursue with Wall St banks
7. 2nd wave of Gen 3 (likely the Robotaxi fleet) let's Telsa create the "Tesla Network" (TN) beginning in 2027 out of FCF from 1st wave Gen 3 plants. FSD is very likely to be ready for deployment by then (2 yrs w. 100x the N.N. training power available vs. current level; 10x in 2023, another 10x in 2024)
8. Tesla potentially keeps their Robotaxi production (alternative is to keep proportion of production matching the g.m. achieved on the hardware, ie: 40% g.m. lets them buy 40% of RTs out of margins)
9. this potentially allows Tesla to grow a 4m unit/yr self-owned Robotaxi fleet as follows:
   1. $0.50/mi income @ 30k paid miles/yr/robotaxi = $15k/robotaxi/yr (conservative)
   2. 4m robotaxis produces $60B/yr annual income, compounding w. production as follows:
      1. 2028 1m taxi's (operated w. a net loss while they shake out the system)
      2. 2029 2m taxi's break even for the first time
      3. 2030 4m TN taxi's on the road $30B net income
      4. Fleet sales to 3rd-parties begins (income sharing neglected below)
      5. 2031 8m TN taxi's produce $90B in net income
      6. 2032 12m TN taxi's produce $150B net
      7. 2033 16m TN taxi's produce $210B net
   3. notice that TN earnings gowth start at about 67% and trends to 40% over time so this justifies a EPS mulitple of what 20x? 40x? (Pick a number)
10. EPS contribution just from TN reaches $70/share by 2033. So that's maybe $2,000 share valuation just for TN by then (discounted to today @ 15%) the current value of TN is ~$500 per share addtional for TSLA, growing to $2K/sh in 10 years.

My conclusion on the question of the day is, Wall St. money may be needed if Robotaxi tech isn't ready yet by 2030. I view this a risk mitigation from Tesla, not a likelihood. Wall St. needs to have some skin in the game if they want the company to grow. A lot of this is simply public support, and dealing with FUDsters and Hedgsters...

Robber Barons Ron Baron, did I get this about right?

Cheers to the Longs!

P.S. the above is just for TESLA NETWORK. So another 2x for the auto and energy business, and then 2030s AI and Robotics is all bonus cash. So+ wot? (10x < A.I.bots < 100x) for that? Moar Mars? So potentially wot then? Over $6,500 net present value for a Tesla share?

P.P.S. Not selling on Monday morning...

 

[petit_bateau]

Very true. In addition, eliminating brake fluid you eliminate a service issue (fluid is hydroscopic). My initial reaction is that it's a lot more complicated to make an electric brake actuator, but perhaps not. You can put all the ABS functionality in that actuator, rather than a separate pump. eliminate a master cylinder, etc. With hydraulic brakes, you could certainly do QD hydraulic couplings on the brake lines, but not sure it's worth it. Not sure how much of a safety concern electric actuation would be, given that you have no backup like you do if a power brake booster fails. BTW, does anyone use electric actuation now?

Several years ago I had discussions with a German (?) manufacturer of mechanical brakes that had eliminated hydraulics. They were fail safe in nature and were originally designed for the tram industry. The wind turbine industry was hoping to eliminate hydraulics so as to improve reliability and cost, and I was working on a wind turbine design. I cannot remember whether it was spring actuated electric release or what, but it was good. It was heavier than one would like for a BEV application. The Swedes were also involved. I cannot find my files on it and who made it, at least not quickly. But in any case these things do exist.

The odd thing is I don't think it was any of these

Dellner launches new lightweight, failsafe brakes for wind turbines

Dellner Brakes, manufacturer of technologically advanced braking systems, has introduced two new spring-applied failsafe brakes to its SKP range. By combining reliable power with a modular, lightweight design and competitive prices, the brakes are set to enhance braking for wind turbines — on...

www.windpowerengineering.com

Braking Systems for Wind Energy | DELLNER BUBENZER | Braking System Design & Manufacturing

DELLNER BUBENZER offers lightweight, noise-free systems for braking and gliding processes in wind turbines. Noise reduction has been the core focus in the development of this comprehensive range of brakes and sliding bearings.

www.dellnerbubenzer.com

 

[Wingfoiler]

First post here, but I have been reading this thread nearly daily for over a year now. Thanks to each of you for sharing salient insights – your contributions are providing incredible value to investors.

On the topic of electrical architecture there was a tidbit in the presentation that has not gotten much attention (apologies if I missed your post on this), and could have easily as big of an impact as the 12 -> 48 V update: Moving to fully Tesla-designed peripheral microcontrollers that communicate via a single ethernet network.

Letting the Tesla engineers speak to this (from Investor Day):

“The number of wires in the car is driven by the number of endpoints that need to be powered and controlled. In the past centralized control has led for wires spanning the entire car. For Cybertruck design we have moved to a local controller where the wire is connected to the nearest controller and those controllers are connected via ethernet. … The design has eliminated most of the cross-car wires in Cybertruck and with the next-gen platform we are going to finish the job and eliminate all of them.”

“And one of the nice things is that you can see the entire vehicle from a single connection..”

“Simplifying the wiring harness will enable automation.”

While the 12 -> 48 V transition discussed ad-nauseum reduces the mass of wires, the move to a single network for communication/control may be even more significant:

• It reduces the *complexity* of the wiring (not just mass), which results in cost savings in both components AND assembly. I recall that wiring harness installation is a very challenging processes to automate, so reduction in complexity leading to fewer assembly steps and/or additional automation is huge.
• This may be extremely difficult for other automakers chain to copy even if they started right away, as tight integration across the entire vehicle architecture and component supply chain makes this possible. Moving to 48 V will take time for industry supply chains to adapt to, but is simpler from an integration/coordination perspective.

From a bigger picture perspective, this is just one piece of a clear broader theme at investor day: Tesla is following through on numerous architectural paths that show incredible long term vision/planning/execution, which at first may only result in incremental advantages but when fully carried out, achieve dramatic improvements. 4680 anyone?

 

[Bet TSLA]

Why spend money unnecessarily ?

There are at least four or more feasible rail yard locations that align with the flat land of the valley floors, don't require tunnelling, wouldn't require massive rebuilding of the major roads, and which have sensible rail radiuses to go out to the existing railroad, and which are entirely compatible with the likely required road, electrical, and other provisions to site. Doing it all above ground is much more flexible than getting locked into inflexible and costly tunnelling operations.

I wasn't thinking about the cost. I don't really know how to compare. Nor was I suggesting that tunneling is "required", more that it might be preferable.

Possible advantages of tunnels.

• mostly invisible
• unaffected by weather
• faster
• shorter distance to travel
• more predictable
• much more flexible (can go from anywhere to anywhere)
• capacity can be easily expanded by just digging more
• unaffected by local traffic
• probably much easier to get permits
• everything about them should get faster, better, cheaper over time as Boring Co. improves

Agreed that their desirability is highly dependent upon what they cost in comparison to other solutions.

But given these potential advantages I expect Tesla to start experimenting with tunnels in Texas soonish, although I doubt we'll see tunnels going the ~25 miles to the RCR Taylor Logistics Park (where Tesla transfers their cars to rail transport) any time soon.

 

[RichardL]

Another consideration of the wiring changes is that it is necessary for unboxing. There would be a front and a rear part of the harness which would be tested in situ before bringing the pieces together - a single complex harness would preclude that

 

[Xepa777]

First post here, but I have been reading this thread nearly daily for over a year now. Thanks to each of you for sharing salient insights – your contributions are providing incredible value to investors.

On the topic of electrical architecture there was a tidbit in the presentation that has not gotten much attention (apologies if I missed your post on this), and could have easily as big of an impact as the 12 -> 48 V update: Moving to fully Tesla-designed peripheral microcontrollers that communicate via a single ethernet network.

Letting the Tesla engineers speak to this (from Investor Day):

“The number of wires in the car is driven by the number of endpoints that need to be powered and controlled. In the past centralized control has led for wires spanning the entire car. For Cybertruck design we have moved to a local controller where the wire is connected to the nearest controller and those controllers are connected via ethernet. … The design has eliminated most of the cross-car wires in Cybertruck and with the next-gen platform we are going to finish the job and eliminate all of them.”

“And one of the nice things is that you can see the entire vehicle from a single connection..”

“Simplifying the wiring harness will enable automation.”

While the 12 -> 48 V transition discussed ad-nauseum reduces the mass of wires, the move to a single network for communication/control may be even more significant:

• It reduces the *complexity* of the wiring (not just mass), which results in cost savings in both components AND assembly. I recall that wiring harness installation is a very challenging processes to automate, so reduction in complexity leading to fewer assembly steps and/or additional automation is huge.
• This may be extremely difficult for other automakers chain to copy even if they started right away, as tight integration across the entire vehicle architecture and component supply chain makes this possible. Moving to 48 V will take time for industry supply chains to adapt to, but is simpler from an integration/coordination perspective.

From a bigger picture perspective, this is just one piece of a clear broader theme at investor day: Tesla is following through on numerous architectural paths that show incredible long term vision/planning/execution, which at first may only result in incremental advantages but when fully carried out, achieve dramatic improvements. 4680 anyone?

THIS is the content I come to TMC for, not the snarky people misrepresenting posts to put a pointless positive spin on *sugar* without trying to have a genuine conversation.

Looking forward to the tear down and seeing where cybertruck improves here and what cross wires couldn’t be eliminated in time for production. I suspect this was an intentional delay in cybertruck to have a testbed for some new manufacturing processes before the big gen 3 investments need to be made.

 

[oldTAVguy]

Meanwhile in new factories VW...

"A new VW factory in the USA has been announced to produce the new BEV Scout brand cars in Columbia, South Carolina. Subsidies from the US government are likely have helped. Around 4k jobs are to be created at the plant, according to the company, construction is to start in the summer, and vehicle production will begin in 2026 The factory has a production capacity of 200,000 vehicles per year."

https://twitter.com/x/status/1631925381031657474

Compare to Tesla with production in Mexico in 2024.

 

[Thekiwi]

Saw that on my Twitter feed and rolled my eyes.

Seems pretty clear to me the first Tesla going to South America will be a more affordable Gen3 car.

Brings up a very interesting thought. Highly possible Gen 3 vehicles will ship in other countries before it ships in the US. Almost everyone has assumed Gen 3 comes to the US first, but it may well be manufactured in Mexico, consumed domestically there, and exported to South America but not imported into America for some time. This would mean Tesla could use Chinese made batteries there and not worry about IRA compliance.

There is already precedence - the Model Y SR out of Shanghai has been shipping in international markets for quite a while, and is considerably cheaper than the cheapest US Model Y offered (including the AWD SR Y out of Austin). U would guess any model 2 that makes it to US out of Mexico will similarly be a higher specced version via options with a higher ASP.

 

[Thekiwi]

Time to remind everyone that a $25k EV would sell better in many lower income markets than a similarly priced ICE vehicle when one considers the lower TCO of an EV vs ICE.

When you are a heavy user paying $50-$100 a week for gasoline, the savings of switching to an EV add up quickly. And the cheaper the EV - the higher the savings are on a proportional basis.

 

[Etna]

Very true. In addition, eliminating brake fluid you eliminate a service issue (fluid is hydroscopic). My initial reaction is that it's a lot more complicated to make an electric brake actuator, but perhaps not. You can put all the ABS functionality in that actuator, rather than a separate pump. eliminate a master cylinder, etc. With hydraulic brakes, you could certainly do QD hydraulic couplings on the brake lines, but not sure it's worth it. Not sure how much of a safety concern electric actuation would be, given that you have no backup like you do if a power brake booster fails. BTW, does anyone use electric actuation now?

The Boeing 787 and Airbus A220 have electric brakes. I mention that because electric brakes definitely can be designed to very high safety standards.

Brembo, a Tesla supplier, has been working on electric brakes for awhile, saying that they are well suited to be integrated with regenerative braking and driver-assistance systems: Introducing the brake of the future! All of the benefits thanks to the new Brembo electric brakes

 

[ARON44]

Time to remind everyone that a $25k EV would sell better in many lower income markets than a similarly priced ICE vehicle when one considers the lower TCO of an EV vs ICE.

When you are a heavy user paying $50-$100 a week for gasoline, the savings of switching to an EV add up quickly. And the cheaper the EV - the higher the savings are on a proportional basis.

A $25K Tesla will probably break the internet when it’s revealed? lol, the hype for it will be unreal, I think it’ll be the Apple iPhone of cars, a proper game changer, no doubt its the one car legacy auto will be dreading..

 

[Tronguy]

Backup could possibly be designed in the motor. Plus each ebrake can be independent. From a clean sheet perspective hydraulic brakes would probably look less safe compared to an EV with ebrakes. But we know in reality that hydraulic is very safe.

"Fail On" is also a possibility with ebrakes, like air brakes.

I suspect on aspect that makes ebrakes more attractive on EV is that subtle braking isn't important. That type of braking is normally handled by the motor.

So, just to throw a wrench in the works: Yeah, I can see where electric brakes might be cheaper than running around with all those pistons, cylinders, hydraulic fluid lines, and reservoirs. But.. while Brake Failure is a Thing (hit the brakes, pedal goes to the floor and Nothing!), it's exceedingly rare. And it's rare because, well, it's reliable.

• There's not just one brake system in Ye Standard Car, there's two! Front left/Rear right and Front right/Left rear are independent, so if one gets a brake line ripped out, one loses two wheels but keeps the other two. It's not ideal, sure, but it's better than the alternatives.
• Direct physical connection between the brake pedal and all those brake cylinders back there. Lose power steering and one can still stop the car, albeit with a lot more shoving on the brake pedal. So, even if The End Is Nigh for the ICE engine or all the electrics in a Tesla, one can still stop the car. Again, not ideal, but sure better than the alternatives.
• People have been designing and building brakes for a very long time. Known technology on a safety-critical system.. sounds like a good idea.

So, I'm willing to entertain the idea of ebrakes. But, sure and begorrah, whatever form those things take, they had better have at least the reliability of ye olde fashioned hydraulic systems. And not just an overall reliability figure, but the ability to Not Crash The Car When Things Go Wrong. (Fail On, mentioned above, gives me the willies: Suppose that a fuse goes blooey whilst one is barreling down an interstate in heavy traffic at 70 mph? One Does Not Want Screetch The Tires Braking in such a situation.)

There might be other, mechanical parallel solutions that gives one a measure of control when the primary braking is toast. My old '71 VW Beetle had honest-to-golly cables going to the rear drum brakes for parking brake purposes. That came in handy the day my shoelaces (!) got snagged around the brake pedal, preventing me from putting my foot on the brake to avoid a stopped car immediately ahead. Pulling the emergency brake and turning sharp right onto a curb saved the day. Although I guess that using my left foot would have worked, too.

Main point: ebrakes had better be more reliable and fault-tolerant than the current hydraulic solution. Otherwise, there will be bodies.

 

[Artful Dodger]

What is the origin of the $25k car?

The $25K car was first mentioned by Elon as the answer to the 1st audience question during the June 2018 AGM:

Elon Musk Tesla Shareholder Q&A (June 05, 2018)

 

[Olle]

View attachment 913776

Zero EV Sales potential. It's like Troy hasn't heard that ALL cars will be electric in the future.

It was dumb to say there was 0 market potential for EVs in the developed world 15 years ago, but ok many did.

To now say that there is 0 market potential for EVs in South America is beyond dumb. That means 0% pattern recognition and 100% recency bias.

Glad we got this reminder to not take somebody's investment advice just because the have a big social media following. Market analysis and audience building are different skills.

 

[2daMoon]

I suppose they could grind off the paint where spot welds would go though it would add an extra operation. Or mask those spots before painting.

These would still be those mysterious "spot welds" between the stamped steel and cast aluminum?

I really can't wait to see how much paint it takes to cover that up.

(for anyone who doesn't understand, you can't weld steel to aluminum)

 

[Fred42]

Just read an article on bloomberg about Tesla. The article says the F-150 electric is a sign that Tesla has gotten stiffer competition. 2 minutes of research into the F-150 Lightning shows that the 320-mile range version goes for at least $80k, that the 2023 is no longer available for retail order, and that Ford had to halt its production due to a battery fire during testing. If this is the competition, Tesla has little to worry about. A Cybertruck with a 300+ range coming in 2024 at 50k and with enough volume to meet demand will make Tesla laugh all the way to the bank.

1. Tesla has not released specs or pricing for the CT.
2. Ford's competitor to the CT will not be the current Lightning, which was designed in a hurry from the gas F-150 and will vanish from the market in a couple of years, but the new one designed from the ground up as an EV, to be built in their new EV complex in TN. We know nothing about specs, cost to manufacture or pricing of the upcoming Lightning.