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

[M|S|M MYP]

Then TSLAQ would be wrong once again:

https://cadillacsociety.com/2022/11/30/2023-cadillac-lyriq-recall-issued-for-display-screen-problem/

TSLAQ: "But at least it was not FSD related!"

 

[Fact Czeching]

Wow. What have I done to deserve that reply exactly?. I've owned a Tesla since 2015, and stock since 2013, and have a sizeable 7 figure long term holding, but if I dare to ask a genuine question about what is being reported regarding inventory, I get this?
This is the investor forum, not the blind obedience and faith forum. IF tesla has a problem shifting cars in Europe as an INVESTOR I think we should be able to discuss it like grown ups.

If its so absolutely blindingly obvious that such numbers are inaccurate, a simple pasting of a reliable source indicating this would be sufficient. Or are you politeness challenged?

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

For instance, has anyone tried to explain why Tesla is suddenly underperforming macros recently? You know, more than the lazy "manipulation" claim?

Could it be people realize earnings won't be great because there isn't any increase in volume QoQ while selling prices have decreased? When has decreasing earnings ever been a good thing for stock price?

Could it be people realize interest rates will stay higher for longer, making expensive vehicles less appealing (therefore less profit margin) for potential through the entirety of 2023?

Could it be that people saw Elon Musk publicly mocking a former Twitter employee, then having to apologize for "getting the wrong information?"

You think any of this is good for the health of the company in the next year or so?

Seems like reasonable things to discuss.

 

[unk45]

Why would they be lower risk?

That is a serious question, one that has no proven answer. Since Tesla borrowers/lessees have had higher FICO scores and lower actual delinquencies than any other OEM for nearly a decades that question deserves a considered response.

There are several possible answers, so I'll offer the ones that seem to me the most likely:
1. Tesla direct sales model means that lessees and borrowers have no 'dealer adds' nor F&I markups. Both add cost without commensurate value. So, Tesla actual resale values typically are nearer residual values in leases, usually above, and dealer additional costs do not exist, thus improving net value for borrowers.
2. Tesla cars attract people who value the actual cost of operation, rather than ignoring it. Such people tend to be more prudent financially than do others.
3. BEV buyers are rarely impulse buyers, Tesla ones in particular, so they tend to consider their purchases rather than acting on impulse. That is a risk-averse behavior pattern.

I do not have proof that those are 'the explanations'. I do believe they are the majority of the reasons. Tesla paper si the only thus far that is publicly sold and 100% BEV. Were there others we might easily compare the Tesla-specific effects.

Overall I think the Tesla direct sales model couples with the near absence of impulse buys probably accounts for most of those excellent results.

For several other portfolios I have examined (with NDA so cannot give specifics) there have been only three non-customer explicit characteristics that correlated with higher credit risk:
1. Percentage of MSRP financed. That is the single most predictive characteristic,;
2. Dealer added interest rate margin. Second, but highly correlated with #1;
3. Dealer added options. Third, but also highly correlated with #1.
All of that ties to the immense negative impact of dealer distribution. These are in excess of dealer margin between cost and MSRP, the dealer service and warranty profits and other costs such as tradein margins, sales and F&I incentives.

Structurally I think the Tesla credit quality advantage ties principally to their sales model and their F&I pricing model. In the end, Tesla provides better value to customer than does a dealer distribution model.

Better value attracts more creditworthy buyers, even for Model S and X.

 

[philw1776]

THERE

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

For instance, has anyone tried to explain why Tesla is suddenly underperforming macros recently? You know, more than the lazy "manipulation" claim?

Could it be people realize earnings won't be great because there isn't any increase in volume QoQ while selling prices have decreased? When has decreasing earnings ever been a good thing for stock price?

Could it be people realize interest rates will stay higher for longer, making expensive vehicles less appealing (therefore less profit margin) for potential through the entirety of 2023?

Could it be that people saw Elon Musk publicly mocking a former Twitter employee, then having to apologize for "getting the wrong information?"

You think any of this is good for the health of the company in the next year or so?

Seems like reasonable things to discuss.

THERE'S A THREAD FOR THIS. ELON AND TWITTER. It's populated with all things hate for Elon.

 

[Rammstein]

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

For instance, has anyone tried to explain why Tesla is suddenly underperforming macros recently? You know, more than the lazy "manipulation" claim?

Could it be people realize earnings won't be great because there isn't any increase in volume QoQ while selling prices have decreased? When has decreasing earnings ever been a good thing for stock price?

Could it be people realize interest rates will stay higher for longer, making expensive vehicles less appealing (therefore less profit margin) for potential through the entirety of 2023?

Could it be that people saw Elon Musk publicly mocking a former Twitter employee, then having to apologize for "getting the wrong information?"

You think any of this is good for the health of the company in the next year or so?

Seems like reasonable things to discuss.

You can have these concerns here but it’s very short term thinking. Tesla will continue to grow earnings longterm and the stock price will take care of itself.

 

[unk45]

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

...

I disagreed with your post because you suggest raising concerns as if people call that "carebear", whatever that may be. Soundly reasoned concerns seem to be welcomed here, there are numerous ones raised and considered regularly from demand, production, service and FSD issues to many others.

Not so well regarded as those that superficially raise something from some industry analyst who has not bothered to examine facts. We all know there are risks, serious ones.
Those of us who are serious want to raise those and assess those.

Superficial baseless comments such as yet another Elon issue are not so well regarded. Al of us have been 'Twittered' and 'Eloned' ad nauseam and have coped with inventory buildup, sales declining, competition's coming etc also ad nauseam. That has been debunked so often that it has become very boring to hear it still.

So, do some homework! Be serious! if you have found a real problem tell us about it.
In the meantime you're playing with mass ignore buttons or worse if you continue this way.

Maybe you're just a Bot. I don't know. If you're a real person I recommend doing some basic research. If you're not you'll soon be found out.

 

[Ogre]

Better value attracts more creditworthy buyers, even for Model S and X.

You are assuming the credit ratings relate to the quality of the buyer, but there is a much simpler possible explanation.

Maybe Tesla is just selective about who they offer credit to. They may farm out less credit worthy buyers to other banks and just focus on the easy/ lower risk credit.

 

[oldTAVguy]

Worth watching on Tesla Mexico, and everything else...

 

[lafrisbee]

There is some precedence with the Netherlands tesla setup where they shipped knock down kits there for final assembly of S/X units, IIRC. More recently of course Tesla builds power trains in Nevada and ships to California, so your assertion that “Tesla is known for everyone engineering together at the same time at the same place” doesn't really hold up.

You made my point for me. So few times does tesla do this compared to every other EV maker proves my point.

 

[unk45]

You are assuming the credit ratings relate to the quality of the buyer, but there is a much simpler possible explanation.

Maybe Tesla is just selective about who they offer credit to. They may farm out less credit worthy buyers to other banks and just focus on the easy/ lower risk credit.

Assuming you're serious. High credit ratings do correlate closely with actual loss rates.

That much simpler explanation is quite plausible in a dealer model. Tesla does not do that. The "get 'em done" crowd is almost invariably associated with only two categories:
1) walk in customers with poor credit. Tesla has very few real walk ins. Further the poor credits invariably want instant delivery, not a Tesla market.
2) Expensive but generic vehicles. Fully Optioned pickups as an example. There are many of them.

Tesla simply does not have much activity from these categories.

To visualize that I suggest visiting your local Tesla store on a weekend, followed by your local Chevrolet, Ford or Hyundai store. Look at the customers, the salespeople and the F&I desk (Hint: don't look to long for that in your Tesla store, there isn't one).

Those two visits will show you visually why your suggestion actually does not work.
That is indeed a common question. It's answered index and visually in stores/dealers.

 

[unk45]

You made my point for me. So few times does tesla do this compared to every other EV maker proves my point.

Not really. Tesla has done it once, only once. Then they had no EU factory. Once Germany had a factory coming the stopped. These tactics happen when there si not enough volume to support a full factory and duties/processes are too difficult to allow direct imports in volume.

No maker does this when volumes can support a local factory.
From Boeing to Volkswagen they're done to minimize import restrictions and/or duties.
That's it!

Tesla now has enough volume that such choices will probably happen precisely for those same reasons.
Don't overthink it. It's all about avoiding impediments.

 

[larmor]

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

For instance, has anyone tried to explain why Tesla is suddenly underperforming macros recently? You know, more than the lazy "manipulation" claim?

Could it be people realize earnings won't be great because there isn't any increase in volume QoQ while selling prices have decreased? When has decreasing earnings ever been a good thing for stock price?

Could it be people realize interest rates will stay higher for longer, making expensive vehicles less appealing (therefore less profit margin) for potential through the entirety of 2023?

Could it be that people saw Elon Musk publicly mocking a former Twitter employee, then having to apologize for "getting the wrong information?"

You think any of this is good for the health of the company in the next year or so?

Seems like reasonable things to discuss.

Also new factory in Mexico, because increasing number of widget makers and hence more widgets has always been a negative indicator for the market view of Tesla... Imagine hypothetically apple intro a new plant or nvidia....

 

[wipster]

I think people are over-analyzing this used car price "Increase".

After Tesla dropped their prices massively in January, used car prices dropped to a 6 month low. We're bouncing off of that 6 month low, not setting some kind of new record here. Used car prices are lower than they were at the beginning of the year and much lower than 4-6 months ago.

As I've posted here previously, one local Mitsubishi dealer in my home town normally stocks ~20 used Teslas, off lease 2019's and now some 2020's. About a week after the big Tesla price drop in January, they dropped the price off of all the Teslas on their lot by over $10,000. Avg. price currently is $30k...

 

[thx1139]

Incredibly softball article from WSJ regarding GM’s failure to deliver their Next Gen EVs.

According to the very generous definition of “Started Selling” they use here, Tesla could say they “Started Selling” Cybertruck’s since it seems like Musk and Franz have theirs. Actual customer deliveries of the LRYIQ started in October and even then there were something like 25 total sold in the year.

Can only imagine what the article would look like if it were Tesla.

View attachment 915406

Dont you know the only thing that matters is the number of announced models, not the number of cars actually produced and sold.

 

[petit_bateau]

Anyone who dares questions the ultrabull narrative is labeled as a carebear, sadly. This is their method of simplifying the processing of information - just don't process anything that might be negative. You can imagine how this could turn out badly.

For instance, has anyone tried to explain why Tesla is suddenly underperforming macros recently? You know, more than the lazy "manipulation" claim?

Could it be people realize earnings won't be great because there isn't any increase in volume QoQ while selling prices have decreased? When has decreasing earnings ever been a good thing for stock price?

Could it be people realize interest rates will stay higher for longer, making expensive vehicles less appealing (therefore less profit margin) for potential through the entirety of 2023?

Could it be that people saw Elon Musk publicly mocking a former Twitter employee, then having to apologize for "getting the wrong information?"

You think any of this is good for the health of the company in the next year or so?

Seems like reasonable things to discuss.

About $180 is an entirely rational share price, assuming good performance

 

[petit_bateau]

That is a serious question, one that has no proven answer. Since Tesla borrowers/lessees have had higher FICO scores and lower actual delinquencies than any other OEM for nearly a decades that question deserves a considered response.

There are several possible answers, so I'll offer the ones that seem to me the most likely:
1. Tesla direct sales model means that lessees and borrowers have no 'dealer adds' nor F&I markups. Both add cost without commensurate value. So, Tesla actual resale values typically are nearer residual values in leases, usually above, and dealer additional costs do not exist, thus improving net value for borrowers.
2. Tesla cars attract people who value the actual cost of operation, rather than ignoring it. Such people tend to be more prudent financially than do others.
3. BEV buyers are rarely impulse buyers, Tesla ones in particular, so they tend to consider their purchases rather than acting on impulse. That is a risk-averse behavior pattern.

I do not have proof that those are 'the explanations'. I do believe they are the majority of the reasons. Tesla paper si the only thus far that is publicly sold and 100% BEV. Were there others we might easily compare the Tesla-specific effects.

Overall I think the Tesla direct sales model couples with the near absence of impulse buys probably accounts for most of those excellent results.

For several other portfolios I have examined (with NDA so cannot give specifics) there have been only three non-customer explicit characteristics that correlated with higher credit risk:
1. Percentage of MSRP financed. That is the single most predictive characteristic,;
2. Dealer added interest rate margin. Second, but highly correlated with #1;
3. Dealer added options. Third, but also highly correlated with #1.
All of that ties to the immense negative impact of dealer distribution. These are in excess of dealer margin between cost and MSRP, the dealer service and warranty profits and other costs such as tradein margins, sales and F&I incentives.

Structurally I think the Tesla credit quality advantage ties principally to their sales model and their F&I pricing model. In the end, Tesla provides better value to customer than does a dealer distribution model.

Better value attracts more creditworthy buyers, even for Model S and X.

There may be another couple of value components in the equation:

- actual build quality is fairly good, and can be directly linked back to specific vehicle;
- ability to upsell a vehicle post trade-in via adding in software switched extras such as NOA/FSD/heated seats/etc;

Both these aspects reduce risk to Tesla of offering credit. They may not directly affect FICO score but they probably play a part somewhere. I expect you can tell us where they apply.

 

[insaneoctane]

They are and have been doing since 2013. Check out securitizations.
The standard US credit evaluation is a generic FICO (Fair, Isaac & Co) score which differs slightly between loans and leases.

The average FICO for Tesla securitizations 2022-A is higher than that of Mercedes Benz at 774 vs MB 2023 at 759. If you know anything about FICO scores you understand that such an average score reflects outstanding creditworthiness.

Tesla financing securitization have since their inception had excellent FICO even as the Model 3 and Y have come to dominate issuances.

How anyone can imagine Tesla does not offer financing bewilders me, since they have had public securitization for years, both loans and leases for nearly a decade.

Perhaps the absence of F&I dealership gouging confuses people, perhaps something else. Almost all of this is disclose in annual reports and more can be found by searching for Tesla securitizations. Much of this has been regularly discussed here.

May I suggest you do a little bit of basic research prior to assuming Tesla is "leaving money on the table" just because they do not overtly 'rip off' their customers.

Interesting. Well, I can only offer my recent experience - that my TMY that I just purchased last month, when I asked Tesla for financing options, Tesla offered me a loan through Wells Fargo. Obviously, not a lot of research in that conclusion, but nonetheless what misled me.

BTW, Sorry to make you repeat the message, but thanks for taking the time to keep the issue straight.

 

[Artful Dodger]

What I’d like to know is their plans for next week, next month, next year. Anybody?

Okay, if we must.

• Next week: ride the lower Bollinger Band
• Next month: make a fuss about the lesser of deliveries or Gross Margin
• Next year: Try to get their shirts back

Ihor Dusaniwsky on Twitter: "I haven't looked at this in a while, looks like $TSLA shorts are down around $56.5 billion since 2010. https://t.co/2LAM8Np6dk" / Twitter​

​

Elon Musk on Twitter: "@ihors3 Wow" / Twitter​

 

[SOULPEDL]

Not to sound like a broken record... but this would be a good time IMO to burn some hair. The puts just keep stacking on 180 but seem to be having a problem getting there... today anyway.

This place is has really changed. Tesla has the best solution on the planet, for the planet, and leads the rest by nearly 2 generations of Factory tech, pricing, and growth - yes growth! I'm fully aware of the pressure on growth stocks from the Fed. Still no change in valuation from me. Sadly, we are left with either FUD or solid investors that only HODL and probably ignore. Maybe gave up talking about it.

Common folks, have some fun, look alive. This seems like a battle for 180 and nobody seems to notice? Battle worn maybe... some lost friends... am I'm missing something? When was the Burnt Hair perfume suppose to come out, was it March?

 

[Nocturnal]

Not to sound like a broken record... but this would be a good time IMO to burn some hair. The puts just keep stacking on 180 but seem to be having a problem getting there... today anyway.

This place is has really changed. Tesla has the best solution on the planet, for the planet, and leads the rest by nearly 2 generations of Factory tech, pricing, and growth - yes growth! I'm fully aware of the pressure on growth stocks from the Fed. Still no change in valuation from me. Sadly, we are left with either FUD or solid investors that only HODL and probably ignore. Maybe gave up talking about it.

Common folks, have some fun, look alive. This seems like a battle for 180 and nobody seems to notice? Battle worn maybe... some lost friends... am I'm missing something? When was the Burnt Hair perfume suppose to come out, was it March?

View attachment 915440

It was delayed to May from March. Time to yolo on some June $200s.

For my part, it's not as fun rooting for your investment that is slowly taking over the world when all the matters is whether or not Oz the Great and Powerful sees his shadow that morning instead of the actual business.