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

[2daMoon]

After catching up from all the post's this weekend, I am reminded of one of my favorite sayings:

"Cherish those who seek the truth but beware of those who find it"

Way too many certainties in many post's.

You seem quite certain about that.

 

[Tommy O]

Called it last year - Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

Actually in a YouTube video I made in 2021 (and privately much earlier) but that’s one of the earlier instances on tmc.

Part 2 of my prediction, watching James Duoma do a total 180 on teslas sufficiency of its sensor suite and radarless approach to do robotaxi. Whether he makes a hard pivot now or a soft pivot over course of 3 years we will see but telling y’all that dude is full of *sugar* as a total charlatan.

Charlatan? Maybe, but you can look up all of his patents. Hint: his first name is not James. And as far as I can remember, adding radar back was something he said was a possibility.

But why are you victory lapping? Can you link what you’re seeing about HW4 that makes you so confident you were right (what exactly were you right about)?Looks, from what I’ve seen, that the cameras are pretty much in the same positions. Do we have info on their FOV?

And curiously, here’s a recent tweet from a tesla engineer about tesla VISION-ONLY level 5:

https://twitter.com/x/status/1625191141305126913

You’ve complained about snark and blind bullishness (overconfidence). For no reason at all, I’d like to note that self-awareness is not evenly distributed throughout the population.

 

[GSP]

…..

I'd like to know exactly what Elon meant by increasing NN training capability by an order of magnitude. It seems "order of magnitude" is a term thrown around a lot. But if that's truly what is happening then we are all going to be very rich rather soon.

One order of magnitude is precisely 10x. The math is simple: 10 x 10 = 100.

We may, or may not, “all going to be rich soon.” I would expect 100x training speed will help FSD significantly. How that translates to achieving L4 autonomy or not remains to be seen.

GSP

 

[unk45]

For context I've lived in a few of these countries.

There is indeed a lot of good demand in LatAm but it does depend on stuff. The biggest market and biggest auto manufacturer is of course Brazil. The wealth is not evenly distributed. The wealthy are seriously rich, as @unk45 points out just check out the helicopter market is Sao Paulo for example - the rich there hardly ever get in a car. But they still have many vehicles in and for their households, and money is no object. The middle classes (a broad term) will buy anything from a Gol (think 2/1, but they'll make the 2 via the Tesla stretch) to a big SUV (so typical Y/X buyers), but for them an important consideration is credit availability - especially so for the enterpreneurial middle class in the countryside who will be natural markets for the CT (and they'll charge from their own solar on their own property) but really the urban markets are where the action will be for the next 5 years. Navigating the financial package will be an important consideration for Tesla in the coming years, especially given the various currency fluctuations.

Another key enabling factor is the dramatically reduced protectionism within/amongst the key LatAm nations over the last few decades. If you add the Brazil and Mexico markets together you get 5m/yr. So a 20% take of that is 1m/yr. You can clearly see that putting a 2m/yr factory into Mexico is going to have happy hunting provided it makes a suitable product suite. If 50% of the Monterrey factory output goes to LatAm and the other 50% heads north to US/Can that would be just fine.

Building out the Supercharger network enough in Mexico and Brazil to drive the sales in the key adopter markets is not going to be any more challenging than has already been achieved elsewhere. The majority of the SCs will go around the big conurbations which are truly big (Rio, Mexico City, Sao Paulo, Bs As). Then run the main highways (e.g. Rio de Janiero down to Mar del Plata, plus the existing buildout in Mexico) and I think that'll do for the next 3-4 years in network terms. The infill will flow naturally. Praise be that CCS rules. (It will be interesting to see if they hit Lima as well, or more to the point, when).

Once a car is on a boat then it is relatively cheap to move it around. That's why it is economic to ship from Shanghai to Europe. It is no different doing Altamira to Brazil, but a lot quicker. If Brazil wants to keep its balance of payments under control then they'll need to get battery mineral production up and running PDQ, ideally with added value cell manufacture. Done right the empty vessels can take cell production back the other way - Caterpillar used to be past masters at vessel routings like this between their various factories.

============


I thought it had already left. But something is going to have to be installed fairly soon, as I don't see China remaining forever happy with exporting all the LFP and not getting another car plant for their troubles. And if the Chinese LFP dries up then Berlin is in trouble unless it has 4680 up and running. Tesla may want to play chess, but the CCP ain't dumb, and nor is the German or EU governments. The US-IRA is blatantly protectionist, but will get countered, and I'm sure Tesla is thinking ahead about how to reshuffle the deck at the correct moment.

Excellent post!

One crucial part that seems difficult to assess right now is the elasticity of demand driven by the combination of infrastructure, reduced duties/road taxes and expanded renewable power availability. The combination of infrastructure and fees is a serious problem for nearly all the world outside China, most of the EU and US/Canada.

I am prone to emphasize opportunity but a life often spent working with underdeveloped parts of the world makes me acutely aware of impediments on one side, and huge opportunity on the other.

So, why be optimistic now?

Even in the poorer countries photovoltaic and wind energy is rapidly expanding because it is cheaper, especially when a country must import fossil fuel. Stationary storage is booming in many of the same places because cheaper batteries are proliferating, often fromChinese and local producers unheard of in the rich world, but also CATL and their licensees, BYD and many local lead-acid producers too. Those spawn the Indian/Thai/China/etc tuc-tuc and micro mini markets, just as the EU has done for urban center tiny delivery vehicles.

Without making long lists of producers or users, or even pointing out the major Brazilian urban delivery services are using them too, it is quite obvious that much of the world is electrifying transportation bottoms-up. Of course I have a bias, my brother-in-law rents space for some of the now-ubiquitous electric bicycle/scooter sellers in Rio de Janeiro. These things are happening worldwide, generally invisible to the traditional carmakers.

So, why is that relevant to Tesla? Precisely because the notion of BEV is rapidly becoming viewed as normal, and infrastructure is coming to support them. Almost without question, once Tesla establishes a widespread Supercharging network the economic reality of BEV operational cost vs ICE will be compelling. Much more so for taxi and commercial markets which now spend a third or more of fuel idling in traffic jams. Suddenly they'll see they will waste far less on BEV.

Just think of market size and costs everywhere in the Indian subcontinent, Middle East, Africa, Eastern Europe and the Americas plus islands everywhere. The common factors are really expensive fuels, expensive ICE repairs, high borrowing costs, traffic jams and high taxes on those costs.
What happens when they adopt solar, wind and storage? Marginal costs go down.
What happens to maintenance costs for vehicles and generators? Marginal costs go down.
What happens to city pollution? It, too, goes down.

All this is the logic for understanding the opportunities now appearing for Tesla.
Monterrey is only the beginning; Shanghai (remember the ancient promise of 'designed in China'?) and others to come. All these will contribute to the 20 million.

The debates we have been having are really about obsolete thinking. As production costs decline and production efficiency rises Tesla will be more able to deliver products the assist the entire "global transition to renewable energy". Is that not the mission?

Only making big cars and trucks as at present will not get to that transition. It already is funding the developments to get there.

There is an easy analogy from consumer packaged goods. Companies like Nestle, Mondelez, Procter & Gamble all make nice profits form sales in poor countries. Poor people do not buy "Giant economy size", but buy what they need for the next wash, meal or whatever. That does mean higher unit cost sometimes, not always, but it does mean accessibility.

Tesla is heading there, not with Monterrey, but some of the next factories and products. Tesla will help clean up the world's most polluted cities. What is not to like about that?

In the meantime Monterrey will do just fine producing just slightly smaller big cars, just not as big, perhaps, as those so widely popular in wide open spaces. Remember, Cybertruck is coming for those places!

 

[mongo]

One order of magnitude is precisely 10x. The math is simple: 10 x 10 = 100.

We may, or may not, “all going to be rich soon.” I would expect 100x training speed will help FSD significantly. How that translates to achieving L4 autonomy or not remains to be seen.

GSP

In base 10...
Optimus says it's 2x.
But why not both?

AI Day:

these complex real-world networks we knew what our first large-scale deployment would Target our high arithmetic intensity autolabeling Networks today that occupies 4000 gpus over 72 GPU racks with our dense computer and our high performance. We expect to provide the same throughput with just four Dojo cabinets.

And these four Dojo cabinets will be part of our first exopod that we plan to build by quarter one of 2023. This one more than double Tesla's Auto labeling capacity. The first exapod is part of a total of seven exapods that we plan to build in Palo Alto right here across the wall.

And we have a display cabinet from one of these exopods for everyone to look at six tiles densely packed on a tray 54 petaflops of compute 640 gigabytes of high bandwidth memory with power and host to feed it a lot of and we're building out new versions of all our cluster components and constantly improving our software to hit new limits of skill we believe that we can get another 10x improvement with our next Generation Hardware and to realize their ambitious goals we need the best software and Hardware Engineers so please come talk to us or visit tesla.com AI. Thank you.

Current GPU farm is 1/3 labeling 2/3 training, 3 labeling equivalent compute units (IIRC)
4 racks = current autolabeling compute
An Exapod is 10 racks.
7 Exapods = 70 racks = 17x current auto labeling compute
So 7 Exapods plus the existing GPU results in 20x combined processing power.

 

[Singuy]

BTW megapack price increased by 100k if anyone cares.

 

[unk45]

I am not as sanguine about the ev transition in Latin America. I think the supercharging rollout and indeed the home rollout will be slow. I actually think the CT will do wonderfully. Electricity generation in Brazil is particularly troubling, they have an over reliance on Hydro and biomass, the hydro has proven to be chimeric as climate change is impacting reliability while biomass creates a large and wealthy pool of folk that are wedded to the current ICE model. Thus, I think you'll find it hard to get state support that will enable an ev transition. Mexico is different but I still think an inexpensive CT will do about as well as a small EV.

Visit Fortaleza, CE, and say that again. The world is changing. Even we benighted ignorant people are putting solar panels all over our cities. You are correct that the problem are enormous. There is progress. Sanguine, NO! Nobody sane can be sanguine about anywhere, even in Europe. My point is not to be dismissive but to see the paths that are being forged right now.
As for Brazil (and several other major countries), were the last President still in office I would have less optimism since he was adamantly opposed to progress. That is rapidly improving. Still, we must be realistic in that governments everywhere are dependent on fossil fuel taxes and political contributions. These transitions are happening more quickly since the impediments are being overcome by plain and simple economics.

 

[nativewolf]

The Brazilian grid is actually quite good, and solar and wind are increasingly running on the grid. The hydro-wind-solar combo is well placed for Brazil as it means that water can be husbanded more carefully. This is important given the droughts that have affected Brazil hydro output. The Chinese are pushing heavily into Brazil renewables & mining.

The biomass energy you refer to is not likely to grow any more (imho), though I'd be interested to hear local opinions on that re the ethanol blending and sugar cane plantation growth.

Brazil hits 22 GW milestone

Brazil has deployed 7 GW of utility-scale solar and 14.98 GW of distributed-generation PV projects below 5 MW in size to date.

www.pv-magazine.com

New database for Brazil’s solar generation potential

Scientists have calculated the solar generation potential of every Brazilian state. The study show that the nation has the potential to install 337.83 GW of solar. The state of Bahia leads with 43.97 GW, followed by Minas Gerais with 41.84 GW and Mato Grosso with 39.73 GW.

www.pv-magazine.com

Also Chinese electric companies have bought into Brazil. To me the entrenched interest and the grid outside of the southern states is an issue. We’ll see. Very interested in hearing from our friend @unk45 .

 

[nativewolf]

Visit Fortaleza, CE, and say that again. The world is changing. Even we benighted ignorant people are putting solar panels all over our cities. You are correct that the problem are enormous. There is progress. Sanguine, NO! Nobody sane can be sanguine about anywhere, even in Europe. My point is not to be dismissive but to see the paths that are being forged right now.
As for Brazil (and several other major countries), were the last President still in office I would have less optimism since he was adamantly opposed to progress. That is rapidly improving. Still, we must be realistic in that governments everywhere are dependent on fossil fuel taxes and political contributions. These transitions are happening more quickly since the impediments are being overcome by plain and simple economics.

My take on a Brazil, as an outsider, is that it is a mad Dichotomy. Many thanks for your insight.

 

[JRP3]

A "wrap" doesn't have to be a full body wrap, it can be a stripe kit or area graphics, something that only covers a portion of the SS surface. Should require a lot less labor to install, be cheaper to produce (simply due to being a smaller area) and still allow an owner to personalize their car.

And even easier to do aftermarket, or DIY, so even less reason for Tesla to slow down production to apply.

 

[FireMedic]

I am not as sanguine about the ev transition in Latin America. I think the supercharging rollout and indeed the home rollout will be slow. I actually think the CT will do wonderfully. Electricity generation in Brazil is particularly troubling, they have an over reliance on Hydro and biomass, the hydro has proven to be chimeric as climate change is impacting reliability while biomass creates a large and wealthy pool of folk that are wedded to the current ICE model. Thus, I think you'll find it hard to get state support that will enable an ev transition. Mexico is different but I still think an inexpensive CT will do about as well as a small EV.

I go to the Baja 1000 most years to do team support for a friend. I can confirm that there are more Ford Raptors on the Baja peninsula than any other single model of vehicle.

CT WILL be a hit in Latin America.

Edit: for context the Ford raptor is an off-road ready, lifted, 18 mpg F-150 that often is optioned well into the $90k range.

 

[lafrisbee]

US-IRA has also created a weird market in Europe. One where the 4680 equipment gets unbolted from Berlin and sent to Austin. And where as a result Berlin keeps sucking on LFP out of China. At this rate they'll be switching Fremont to 4680, and redirecting Fremont's ex-China LFP over to further ramp Berlin.

If I recall correctly Tesla still hasn't drawn on any of the German factory grants. They were conditional on battery manufacture in Berlin. Hard to see when Berlin is actually going to be able to get its hands on any 4680 kit to execute on that.

Since Mexico can act as a cell factory supplying into the US-IRA market then it is also likely that Monterrey will be ranked ahead of Berlin for 4680 equipment. A bit ironic that Berlin can't get 4680 equipment even though (??) a fair chunk of it is likely made in Germany.

The EU is figuring out the details on how to respond to US-IRA. I rather suspect it will have a solution for this in the corresponding EU package.

So the puzzle pieces may get shuffled again.

I think I read on this forum that the reason Tesla shifted the emphasis of 4680 to USA from Germany was that the "grants" in Germany were contingent that the tech used to create the batteries had to be New technology. And when Tesla developed a working 4680 line in the USA it negated the German Grants.

 

[Fact Czeching]

For this type of question I always let Loki and his puppet James answer...

$7.5 EPS in 2023? Though I would love that to be the case, I think James' ridiculous hair has grown into his grey matter.

No one cares about the past, it is the future trend of growth that matters. Right now 2023 is basically gonna be flat.

Can't convince a care bear. Good thing you only have 5 posts so I didn't have to reach much to know one when I see one.

I'm a bull, but only come to read what's going on when there are questionable data points in the air. I want clarity. If you are just gonna say buy and hold for long term, sure, but then the constant updates of this thread are pointless. People should have some expectation of what 2023 will bring for earnings and share price movements.

Thank you for your care-bear warning. But we're good.

If you believe your thesis, you should sell now and either find a better investment or wait until the market 'fairly prices' TSLA at whatever number you think is appropriate and buy back then. Good luck with that.

Best thing about this is, you don't have to waste your valuable time worrying about the stock price and posting questions here asking for reassurances (which, when provided, you ignore anyway).

This sort of put-finger-in-ears mindset didn't work well in 2022 when the share price tanked 70%. I think people would like to know if it's gonna tank 50% again.

There’s an interesting development in the evolution of Tesla deliveries in the 4 EU countries that have real time registration reporting: Electric Vehicle registrations in Europe: 14 countries, 90+% of BEV market
The deliveries this quarter started much earlier than previous quarter, but at a lower rate. Today the delivery graph is crossing below the Q4 graph. But this quarter’s graph is much more linear. It looks like (visually extrapolating) these countries may have only 10K deliveries this quarter, versus 15K previous quarter, if there is no end of quarter rush.
No end-of-quarter rush would mean that deliveries remain roughly at the current rate. This quarters deliveries started around day 20, the previous quarter at day 40. If we have the same improvement in Q2, we’re witnessing the end of the EOQ delivery rush in Europe right now. At the current rate, Q2 could see 15K deliveries again, spread linearly over the quarter, and the end of the inventory buildup caused by ending the wave.

Based on this trend, Q1 in Europe is going to end up below Q4 in deliveries. Not good.

Careful you’re saying something negative here so the hive mind will downvote you lol.

You can tell when Elon shifted tone from being so insistent tht demand exceeded supply until investor day when he said “there’s a strong demand impact on lowering prices.”

1) uhh…duh?

2) yah Tesla could sell infinite model 3s if the prices were cut to $15k but then Tesla wouldn’t be profitable if that happened now would it?

3) combine with what Elon said on Twitter about pedal to the metal even if he has to sell cars at negative margin and there, despite all the pedantic responses from TMCers the past week (check my post history) they just refuse to see what’s coming, which is a relentless attack on margins out of necessity.

These price cuts will keep happening, especially as main street really starts to feel a recessionary environment this year, and Teslas growth story will be challenged due to its evaporating margins.

I can already foresee debates here in August about Tesla doing great because of increased car sales (even if only at 30% growth and dangerously approaching sun 15% gross margin) and that it’s undervalued. Contrast this with early 2022 when everyone said “50% growth and 30% auto gross margin long term baby!!!!” You know who you are..:like 80% of this board lol.

Q1 gonna be bad. Just admit it, will be better for your mental health!

Again, Tesla going to be biggest company in the world, I believe FSD and some form of robotaxi eventually happens (just debated a cruise employee friend at Stanford last weekend on this lol), Tesla energy will be meaningful (+ insurance + charging + eventual App Store), and the fact that I have to qualify all that is sorta sad.

I miss the times where optimism was based on the long term product projections and a general financial market sizing direction, not the defense of long term financial projections that are incredibly volatile and subject to the often ridiculous assumptions of the given poster. And posters calling Tesla/Elon a company “not trained in deception.” Lmao.

It’s like people have gone from placing their spiritual allegiance from organized religion to politics/investments.

Exactly.

 

[lafrisbee]

I agree with much of what you state. But I agree with the "Nikola" factor" of if it was CGI then this is deception, and it was presented at an INVESTOR EVENT. So Elon would get exactly what Trevor(?) got from the FEDS, But multiply the Financial Penalty several times over. And the damage to Tesla/TSLA would be off the charts.... The bears would die from gluttony.
But The video is too artsy. Some is in focus, and some is out of focus. Some of it is not real. It does create a false image, but not false facts about the product.
My resolution to it all is that What the Robots do is real. The video might have some scenes actually performed by Tesla bots, and anything the Tesla bot is shown to do it can indeed do regardless of whether an actual bot was used in the video. But most of the scene is CGI, manipulated pixels, or distortion done in an attempt to make it appear more appealing than a sterile video in a lab of bot stumbling around holding his tool.

Luke,
THis made too much sense of the issues around the video, and is probably why it had such an ambivalent and weak reaction.

 

[dhrivnak]

OT... Many say the same about Elon. It's a purposeful style, got my attention, learned lots, donated.
FYI, my post is not just about him. He (and I) cite numerous sources to show that the alarm is continually ignored. Agree there?

I agree many are not as alarmed as they should be. I truly beleive Climate Change is a major problem and should be addressed. Personally we have cut our carbon footprint, 82% over the years, thanks mainly to EV's and solar. Lifestyle is actually better and at a lower cost. And I have discovered there are MANY more like me. Driving to Net 0: Stories of Hope for a Carbon Free Future: Hrivnak, David J: 9780692143834: Amazon.com: Books

That said people who are overly alarmist put many people off. I fully beleive we will still have north of 8 billion people here in 2026 and as such people will raise him up as a quack who proclaimed the end of the world and yet the world continues on.

 

[dhanson865]

[Price history graphs]

Model Y (https://uploads.disquscdn.com/image...d33be972ad561049096a7149644af55c785fe9a5a.png)

Model 3 https://uploads.disquscdn.com/image...9410785a1c1093de849a452a1d83ed48168f59215.png)

Model S (https://uploads.disquscdn.com/image...42884c16cafd48b8d2a1fee2e36d1f46b13862e2d.png)

Model X (https://uploads.disquscdn.com/image...11f01971685cf35253af05a0b7147589aaad103c0.png)

 

[TN Mtn Man]

And even easier to do aftermarket, or DIY, so even less reason for Tesla to slow down production to apply.

Exactly-that's where I was going with that, but wasn't smart enough to finish the thought! Could also be an extra profit center for Tesla delivery centers if customers want it done at time of delivery. And if you want truly custom, have a custom wrap printed that really expresses your tastes.

 

[Speedr117]

The Model X Plaid is a BARGAIN!

Model X with 6 seats: $106,490
Model X Plaid with 6 seats: $109,990

The Plaid only comes in 6 seats, and is included in the price. So for the same config (6 seats), it's only $3,500 more!!!

 

[JRP3]

Based on this trend, Q1 in Europe is going to end up below Q4 in deliveries. Not good.

Why? It wouldn't be the first time that Q1 was lower than the previous Q4.

 

[Mengy]

Based on this trend, Q1 in Europe is going to end up below Q4 in deliveries. Not good.

Um...in the automotive world, Q1's are normally lower than the preceding Q4's. How would that be unusual?

EDIT: Beaten by @JRP3, bleh!