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

[Artful Dodger]

We are living in a simulation…

https://twitter.com/x/status/1634374859043270678

Yeah that's not a "simulation", that's "prediction hell". Dante was an optimusk...

Min-Liang Tan on Twitter: "I think Twitter should buy SVB and become a digital bank." / Twitter​

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Shibetoshi Nakamoto on Twitter: "@minliangtan elon musk would be like “y’all are worried about contagion from SVB? i AM the contagion!”" / Twitter​

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Elon Musk on Twitter: "@minliangtan I’m open to the idea" / Twitter​

 

[Gigapress]

This is yet another “overly hopium” post you’re probably going to be wrong about, but great cat nip for dreamers.

I am sincerely trying to get accurate answers or learn what I got wrong.

The main point was:

1) Tesla has a new platform coming with a yet-to-be-revealed family of vehicles

2) Tesla intends to cover all major market segments in order to convert all road transportation to electric

3) There is a large market segment for trucks in between the Cybertruck and the Semi, and these vehicles typically consume a disproportionate share of fossil fuels because of their large size, high power, and high usage rate (much like full-sized Semi trucks)

4) Several other major OEMs that make trucks, such as Ford, Chevy, Ram, and GMC, have a variety of sizes to fit different job requirements

This is why I’ve inferred Tesla will probably make at least one truck design for Class 4 through 7. How is that hopium? Yeah, it probably won’t be sold for until like 2026 at the earliest, due to the reasons you have mentioned. For trucks Tesla obviously already has their hands full in the next few years just with meeting demand for the Cybertruck and Semi. However, the official plan is still for 20M vehicles annual run rate by 2030, and I would be surprised if this plan does not include a couple mid-sized work trucks.

1) It’s not simple to just “make a bigger version” of the truck, especially if that means bed width widens. That can materially change truck design and castings. Tesla is a company that’s reluctant to even change the outside of its cars (which is why so many erroneously believe the Model S is the same car from 2012) on a superficial level. …

It won’t be trivial to enlarge the Cybertruck or make a flatbed truck design, but I doubt it’s an insurmountable challenge any more than it is for traditional truck formats. Unless I’m deeply underappreciating some aspect of this, it’s just some straightforward structural engineering. Tesla (and SpaceX) has shown willingness and ability, not reluctance, to radically rethink their structural designs in short periods of time, and I don’t see the relevance of looking at the lack of superficial changes to non-structural body panel styling. Why not look at the rate of change from the 2017 Model 3 structure to the 2023 Model Y structure as a guide instead?

2) If the dimensions of the bed length are true, it looks to be smaller than the standard work truck. That makes it non viable for many commercial applications, if anything just for the accessory compatibility. Yes the bed is bigger than the lightning but the lightning isn’t made in any volume and we haven’t seen it widely used for fleet vehicles yet. It seems as if tesla made a decision to go after individual buyers by making it small enough to fit in a garage. All speculation, but if the bed (with its slanted shape mid gate and petruded wheel areas) isn’t competitive, the truck isn’t competitive.

3) the retail demand for the truck might be high enough for tesla to just focus on the retail customer and sell an expensive version first. Elon didn’t know cybertruck demand and tesla was in a fundamentally different state in early 2019. Surprise that you as a margin boy don’t feel tesla is going to extract as much of the inelastic price demand for suberban families who want this for show off value for a couple of years before making the single motor, let alone the work truck (which will NEED to be economical). To this day tesla doesn’t even offer a real ST model Y (Austin version doesn’t count).

Most of this does not relate to whether Tesla will pursue the medium-duty truck market.

Cybertruck as it exists now will of course not be suitable for all professional uses and this has already been discussed at length in the years since the reveal.

Almost all retail truck buyers are purchasing Class 1 and 2 trucks, which is what Cybertruck is targeting. Class 4 (like F-450s) and larger would be insane overkill for nonprofessional use, except for a tiny minority of wealthy people with niche hobbies that involve very large towing/hauling loads.

Again, somebody’s got to fill the Class 4-7 range, and I think Tesla’s advantage with high-nickel, cobalt-free 4680s would give them a relatively strong competitive advantage in this segment, much as is happening with the Semi.

 

[KBF]

Informative CyberTruck thread, some tidbits: dual and tri-motor, no single or quad motor. 5% size reduction. In-house accessory team/manufacturing.

https://twitter.com/x/status/1634225807282540545

5 seats only instead of 6... Hmm, I have 4 kids, guess we'll have to keep the Model X after all and be a 3 Tesla family...

 

[SmokyPeat]

Again, somebody’s got to fill the Class 4-7 range, and I think Tesla’s advantage with high-nickel, cobalt-free 4680s would give them a relatively strong competitive advantage in this segment, much as is happening with the Semi.

I think a downsized version of Semi would make much more sense than an upsized version of Cybertruck to address the class 4-7 segment.

 

[AndrewZ]

Emergency Fed meeting Monday

https://twitter.com/x/status/1634397032311062528

The description appears no different from any number of previous meetings.

Click through these

Board Meetings

The Federal Reserve Board of Governors in Washington DC.

www.federalreserve.gov

 

[Watts_Up]

5 seats only instead of 6... Hmm, I have 4 kids, guess we'll have to keep the Model X after all and be a 3 Tesla family...

Or you can make a Cyber-Brat version:

 

[Gigapress]

I think a downsized version of Semi would make much more sense than an upsized version of Cybertruck to address the class 4-7 segment.

Yeah. Bigger Cybertruck probably would make more sense for Class 3 or maybe 4. Beyond that, it’d be more box trucks or customizable flatbeds. The current Cybertruck can’t handle jobs like heavy gooseneck trailers or fifth wheels like an F-350 dually can. That’s where a bigger variant could make sense.

I think other OEMs will have an easier time making reasonably competitive decent passenger vehicles, but in these larger truck segments Tesla’s battery, charging and powertrain advantages have the biggest impact.

 

[mongo]

Is this saying that the incremental costs are determined by DoE estimates? I had been wondering how that would work. If so then the credit would be about $10k based on these numbers. And how would that affect the Semi?

Department of Energy did an analysis of incremental price based on average industry data and their cost estimater. The Treasury has adopted that as a reasonable standard for 2023 claims interim guidance. See fact sheet 2023-4 linked from this page:

Frequently Asked Questions About the New, Previously-Owned and Qualified Commercial Clean Vehicles Credit | Internal Revenue Service

In addition, the DOE Analysis provides an incremental cost analysis of current costs for several representative classes of street vehicles with a gross vehicle weight rating of 14,000 pounds or more in calendar year 2023. The Treasury Department and the IRS will accept a taxpayer’s use of the incremental cost published in the DOE Analysis for the appropriate class of street vehicle to calculate the § 45W credit amount for vehicles placed in service during calendar year 2023.

Based on that, a buyer can claim, at a minimum, the stated numbers as the incremental cost at a 100% credit level up to the $40k limit on 14k GVWR vehicles regardless of actual vehicle price in 2023. Class 8 (semi) is the only one to max out the credit, lower classes are eligible for at least $34.5k if BEV.

Note: they put the the incremental cost of a BEV class 8 longhaul at nearly $300k.

All BEV under 14k GVWR are eligible for $7,500 (commercial credit).

 

[Artful Dodger]

Or you can make a Cyber-Brat version:

View attachment 916285

TRUCKLA: The world's first Tesla pickup truck - YouTube (Jun 18, 2019)

 

[Bet TSLA]

However, the official plan is still for 20M vehicles annual run rate by 2030, and I would be surprised if this plan does not include a couple mid-sized work trucks.

Why? Seems to me that a serious ramp of the cheapest vehicle possible is sufficient to get to 20M by 2030. And that means whatever they build in Monterrey, plus additional similar vehicles wherever they can.

Meanwhile, the mission is best served if as many other companies as possible produce as many EVs as possible, so Tesla should leave a variety of niches for others. It doesn't make much sense for them to serve any market where they sell small numbers, as they can't be as efficient as when they produce large numbers. I think they'll leave the mid-size work trucks for others.

 

[mongo]

He exercised options, which means, yeah, he did buy about 10,000 shares (at the low option strike price). But he didn't buy from the market, these were newly created shares that have been added to the market. He paid Tesla about $40,000 to buy 10,000 shares. Oh to be a CEO with a generous stock option plan.

Sure, but this wasn't part of a CEO plan, it was based on patent awards from 2013. 350 options each valued at cost when TSLA was around $42 and $100.

"The option award was granted as part of Tesla, Inc's company-wide patent incentive program, and the total number of shares subject to the option was vested and exercisable on the grant date of the option."

 

[Ogre]

I think other OEMs will have an easier time making reasonably competitive decent passenger vehicles, but in these larger truck segments Tesla’s battery, charging and powertrain advantages have the biggest impact.

Sadly, American car companies other than Tesla are not able to compete making ICE passenger cars either. So Tesla Vs Toyota and/ or VW in the long run.

 

[MC3OZ]

When I re-watched the Q&A section of the Investor Day video I found that Elon and Drew provided very good answers on the Cathode Plant and the Lithium Refinery.

The Resource Angle

teslamotorsclub.com

 

[Skryll]

I

We all know Elon is an expert at everything so why not? /s just in case.

Elon has been talking about disrupting banking, got PayPal experience under his belt, and talked about turning twitter into a payment system. So not that far out of his expertise, and certainly not a new idea.

 

[unk45]

OMG. That was really quick. Startups will be failing left and right after this. It isn’t uncommon for them to put their entire capital raises into an account until they can get their treasury figured out and buy things like US Treasuries. FDIC insurance only covers something like $500K from what I remember. What a disaster.

In every significant US bank failure since the 1930’s all depositors have been made whole. This one differs from all those of 2008-2009 and previous multiple bank failures in that the failure was unusually sudden. Within a few days there will be a new bank to assume those obligations.
in 2008-2009 even non-bank obligations were met by selling brokerage firms and converting investment banks to commercial banks.

Be calm. Depositors will not lose deposits.

 

[unk45]

Only 2.7% of their customers has less than 250k in SVB. This is a different beast vs a typical bank. 97.3% are not FDIC insured.

https://www.reddit.com/r/wallstreetbets/comments/11nw54y

Please, this is a red herring. FDIC insurance limits are an anachronism that continues by tradition. ALL depositors will be paid. ALL. Even in the last trash even specify firm non-insured deposits were paid as well megadeposits. Every one.

 

[unk45]

I think that most are concerned with the potential short-term dislocation. SVB had a somewhat unique business and was the glue of the startup ecosystem.

Also, this could be the proverbial canary in the coal mine. We've known that flooding the market with liquidity and then abruptly pulling it back could have some violent consequences. It looks like we are starting to learn the details of those consequences.

The ‘canary’ is loudly tweeting for commercial real estate, leveraged buyouts and stock buyback excesses. Luckily for TSLA they’ve ignored all the calls to do buybacks, pay dividends, etc. This has been building for some time. Elon has been warning everyone.

 

[NicoV]

Yes, but I think that’s purely because the wave is being eliminated. My assumption is that the somewhat linear behavior we’re seeing since the third week of the quarter will keep more or less the same slope this month. There may be an end of quarter delivery peak (I’d be very happy if that was the case) but I doubt there will be a peak as big as in december. There are still 6 ships from China en route to Europe, I doubt all those cars will be delivered by the end of the month.

@Max Plaid We’re barely a week later and the situation looks totally different. A proportionally very large number of cars where delivered in Norway this week (1000+ just this week versus 2000 in the rest of the quarter so far). It remains to be seen whether this is an outlier or the start of an end of quarter wave.
It’s been some time since the last ship towards EU departed from Shanghai, so it looks like we won’t get into a steady state delivery flow in Q2 (or the production in Berlin is high enough not to need this anymore).

 

[unk45]

Sadly, American car companies other than Tesla are not able to compete making ICE passenger cars either. So Tesla Vs Toyota and/ or VW in the long run.

No argument for the NA market. Check out the UK for Ford, Brazil for GM, China for GM ( Buick exists mostly for China). It is unusual for me to mention US OEM ICE cars as successes. They exist but still are shrinking, as are most ICE.

 

[Max Plaid]

I feel like the stimulus check was not the cause, but the inflation of assets due to speculation in NFTs, crypto, and the market that caused many to quit their jobs or reluctant to return to work. Buying BTC was free money, and then you cash out to buy NFTs, then use that money to buy TSLA. Get some GME as it squeeze and weekly options to yolo your allowance money. Wallstreet Bet subreddit I think gained...what 10 million new followers at the time?

Anyone that bought a decent amount of TSLA up until mid 2019 and held even now could probably not have to work again...