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

[ggies07]

I fear another "too big to fail" bailout. I would rather see these dinosaurs die than get free gov money again.

 

[TN Mtn Man]

The idea that Ford and GM get bailed out again is an unfounded fear. Last time they were bailed out, the entire auto industry was in shambles. The dynamic is completely different today. This time if GM and F collapse, it will entirely be to the benefit of Tesla and Tesla will continually growing and employing more and more od the US auto work force. The optics of the government bailing out two of the 3 US auto makers while the 3rd (Tesla) thrives would be so bad that neither democrat or republican would touch it.

The IRA act was esssntially as much of a bailout that Ford and GM will get. The numbers that Ford is putting out and their targets for 2026 show just how little they’ll actually be able to benefit from the IRA act

I would hope that you're correct, but I wouldn't expect it. Look at just the current administration. They have ignored and slighted Tesla for years. Crafted legislation that penalized Tesla and supported F and GM (in part due to the UAW). Attacked Elon personally, and with agencies of government (SEC). Now, both F and GM have made big statements concerning EVs being their future and being committed to them. But they have done very little to deliver on that commitment. None have a high-volume EV, have been slow to introduce new models, have been incredibly slow to ramp production-and have a questionable charging infrastructure that they refuse to invest in significantly. I think it's very likely that both will fall into bankruptcy (again for GM) and that the US government will extend the pain with more taxpayer funded welfare.

I hope I'm wrong, that the government will respect the free market and let well run, successful companies thrive, and let failures die out and go away. But again, I don't count on that.

 

[bkp_duke]

I remember GM & Chrysler getting bailed out. Not Ford.

Ford got a "loan". Last time I checked it wasn't fully paid back. Anyone got any more recent info on that?

 

[Knightshade]

How many EVs did Ford build last year? I've spent the last 20 minutes looking for that and haven't found a definitive answer. I seem t recall around 30k Mach-Es discussed at one time, and a handful of Lightnings. Lets say 50k total as a guess (subject to change). So....losing about $42k per EV that they build? Doesn't strike me as a sustainable business model (yeah, I know, new products, R/D, ramping, etc. But they have been ramping the Mach-E for a few years now).

In 2022 Ford sold sold 61,575 EVs in the US.... 15,617 F-150s, 6500 E-transit vans, and 39.458 Mach Es. They also sold ~25,000 Mach Es in Europe (I don't THINK they sell the F-150 or E-Transit there yet, or at least can't find mention of it)... so that'd put them at about 86.5k EVs sold worldwide for the year.

Ford got a "loan". Last time I checked it wasn't fully paid back. Anyone got any more recent info on that?

Ford got the same type of loan Tesla did (so did Nissan).... Tesla paid theirs back early, Nissan has since paid theirs off... and from what I can find Ford followed the normal required payment schedule and would've paid the final payment last year-

Ford took $6B government loan in 2009 — and debt still haunts company

Ford isn't alone in the struggle, but it entered 2020 reporting a much smaller-than-expected profit than its competitors.

www.freep.com

The ATVM loan is repayable in quarterly installments of $148 million, which began in September 2012 and will end in June 2022.

 

[StarFoxisDown!]

I would hope that you're correct, but I wouldn't expect it. Look at just the current administration. They have ignored and slighted Tesla for years. Crafted legislation that penalized Tesla and supported F and GM (in part due to the UAW). Attacked Elon personally, and with agencies of government (SEC). Now, both F and GM have made big statements concerning EVs being their future and being committed to them. But they have done very little to deliver on that commitment. None have a high-volume EV, have been slow to introduce new models, have been incredibly slow to ramp production-and have a questionable charging infrastructure that they refuse to invest in significantly. I think it's very likely that both will fall into bankruptcy (again for GM) and that the US government will extend the pain with more taxpayer funded welfare.

We’ll actually I would take how everything went down with new EV credit bill and the IRA to show that the UAW is well on its way to being marginalized. As Tesla’s US workforce continues to rapidly grow, they’ll continue to lose influence.

The current administration tried to shoehorn in Union clauses and screw over Tesla and they failed.

I think you also have considered what the landscape is going to be in 3 years when the collapse of Ford and GM actually happens and not what it is today. They’ll both have a slow death, continually laying off more workers over the next 1-2 years. Tesla’s workforce will continue to grow. By the time Ford and GM collapse, the number of US workers they employ will be significantly lower than it is today. Which again, makes it that much harder for any government to bail them out. The optics would be terrible

 

[Nocturnal]

The idea that Ford and GM get bailed out again is an unfounded fear. Last time they were bailed out, the entire auto industry was in shambles. The dynamic is completely different today. This time if GM and F collapse, it will entirely be to the benefit of Tesla and Tesla will continually growing and employing more and more od the US auto work force. The optics of the government bailing out two of the 3 US auto makers while the 3rd (Tesla) thrives would be so bad that neither democrat or republican would touch it.

The IRA act was esssntially as much of a bailout that Ford and GM will get. The numbers that Ford is putting out and their targets for 2026 show just how little they’ll actually be able to benefit from the IRA act

I lean that way too. I don't think the American public will stomach another bailout. It wasn't just the auto industry that was in trouble back then too.

 

[dhanson865]

I don't mind if the weather forecast changes or is slightly wrong. I just don't want my weatherman calling for Snow in the Summer just because it snowed at the beginning of last quarter. It's bad logic and clearly inaccurate.

 

[SOULPEDL]

So, Ford lost $2.1B on their EV division last year, $3B in the last two years (so, say $5B total, probably more actually).

Did Tesla ever lose anything close to $2.1B in any given year? And what’s their lifetime loss (before they started producing profitable years)?

I guess you could say that Ford has to lose more because they are a large company and somehow need to jump into the fray in a bigger way rather than start small like Tesla did. But Ford’s electric deliveries haven’t exactly been huge either. And nothing was preventing Ford from starting electrification ten years ago.

Adding to this, all legacy had the playbook handed to them from Tesla many years ago. Monroe had all the specs, maybe they didn't want to pay for his data? Plus, Patents available... demand clear... IPCC red alert... what gives? Greed and quarterly earnings - no long game... no strategy mission.

 

[TN Mtn Man]

In 2022 Ford sold sold 61,575 EVs in the US.... 15,617 F-150s, 6500 E-transit vans, and 39.458 Mach Es. They also sold ~25,000 Mach Es in Europe (I don't THINK they sell the F-150 or E-Transit there yet, or at least can't find mention of it)... so that'd put them at about 86.5k EVs sold worldwide for the year.






Ford got the same type of loan Tesla did (so did Nissan).... Tesla paid theirs back early, Nissan has since paid theirs off... and from what I can find Ford followed the normal required payment schedule and would've paid the final payment last year-

Ford took $6B government loan in 2009 — and debt still haunts company

Ford isn't alone in the struggle, but it entered 2020 reporting a much smaller-than-expected profit than its competitors.

www.freep.com

Thank you for that, very useful information. I actually didn't realize they built a significant number of the E-transit vans, I see that as very encouraging, as well as European sales of the Mach.

 

[TN Mtn Man]

We’ll actually I would take how everything went down with new EV credit bill and the IRA to show that the UAW is well on its way to being marginalized. As Tesla’s US workforce continues to rapidly grow, they’ll continue to lose influence.

The current administration tried to shoehorn in Union clauses and screw over Tesla and they failed.

I think you also have considered what the landscape is going to be in 3 years when the collapse of Ford and GM actually happens and not what it is today. They’ll both have a slow death, continually laying off more workers over the next 1-2 years. Tesla’s workforce will continue to grow. By the time Ford and GM collapse, the number of US workers they employ will be significantly lower than it is today. Which again, makes it that much harder for any government to bail them out. The optics would be terrible

True, but do you think they learned anything by that, that will change future actions (and this can apply to either party)? Union employment only makes up about 9% of private sector workers, yet in virtually every speech the president mentions "union jobs" and "union workers"-while ignoring the 90% of workers that are non-union.

Now, I suspect what you'll see is that both will continue to slowly lose market share, continue to trim the work force (when I was with GM back in the 1980s, IIRC they employed around 280,000 in the US). As they employ fewer and fewer workers they become less relevant politically. GM was bailed out before not because of the long, slow hemorrhage, but because of some poor short-term decision making associated with cash flow during a significant recession. In other words, more a sudden shock to the nation, rather than a long, slow death where it's anticipated. So looking at it that way, yeah, I'm coming to your point of view-perhaps they won't be bailed out.

 

[Rhoon-NL]

Talking about Ford. They just introduced the New All Electric Ford Explorer...

 

[Creekstalker]

True, but do you think they learned anything by that, that will change future actions (and this can apply to either party)? Union employment only makes up about 9% of private sector workers, yet in virtually every speech the president mentions "union jobs" and "union workers"-while ignoring the 90% of workers that are non-union.

In the upper midwest, union employment makes up a significantly larger percentage of the voting public. These states were pivotal in deciding elections in 2016 and 2020 and therefore winning Michigan, Pennsylvania, Wisconsin etc. helps determine who wins the electoral college and thus the presidency. And the President gets to choose department chairs and nominate people to serve on regulatory commissions. President Biden knows a 2nd term depends on winning those states like he did in 2020.

 

[oldTAVguy]

Talking about Ford. They just introduced the New All Electric Ford Explorer...

Only in Europe at this time IIRC. Also based on the VW ID platform, with all the limitations that brings. Also what is the profit/loss and revenue share that will go to Ford and not VW?

 

[SOULPEDL]

Speaking of screwings and bailouts, they come in many forms... we might expect these rules to relax and help out legacy somehow.
Model 3 is expected to loose the tax credit next month, but the revision...

"...will likely have a large impact on other EV makers in the US as the majority of them have supply deals with companies from abroad."

Tesla may lose $7,500 US tax credit on the entry-level Model 3: Report

Tesla has reportedly notified its employees in the US that it will soon lose the $7,500 tax credit currently available on the Model 3 Rear-Wheel Drive (RWD). Tesla sales in the US have boomed with […]

driveteslacanada.ca

 

[Ogre]

I'm tired of the media saying Tesla started a price war. That is BS.

We are seeing another advantage Tesla has that I don't hear discussed much in the community. Because Tesla sells direct to the consumer and takes all orders online, Tesla knows its demand at any given instant for any specific locale. This allows them to adjust price and supply anywhere in the world in an immediate reaction to demand fluctuation. No other major automaker can do that so efficiently.

There is no price war. Tesla is simply adjusting its prices to maximize profit on its increased production capacity. Why? Because they can.

If you were to go back in time 2 years and tell people where Tesla’s prices would be today they wouldn’t bat an eye. In fact people would be far less likely to believe where prices were 3 months ago than today’s prices.

If you plot Tesla prices on a curve over the past 5 years, it’s pretty obvious the end of 2021-2022 was a bubble. Media reporting that there is some kind of huge discounting and price wars going on are simply missing the narrative. The real “price war” starts next year when Tesla needs to push their run rate from the current ~1.9 million units up to around 3 - 3.5 million units. Increasing sales by a million vehicles a year in 12 months is going to require lower prices and a lot of pain from the competition.

 

[Ogre]

Speaking of screwings and bailouts, they come in many forms... we might expect these rules to relax and help out legacy somehow.
Model 3 is expected to loose the tax credit next month, but the revision...

"...will likely have a large impact on other EV makers in the US as the majority of them have supply deals with companies from abroad."

Tesla may lose $7,500 US tax credit on the entry-level Model 3: Report

Tesla has reportedly notified its employees in the US that it will soon lose the $7,500 tax credit currently available on the Model 3 Rear-Wheel Drive (RWD). Tesla sales in the US have boomed with […]

driveteslacanada.ca

Just curious.

Where is Highland?

I’d expected they would have their new vehicle on the road by now and ready to suck up those incentive bucks. Is Tesla just going to lease the hell out of the Model 3 SR and sell it to Hertz and Autonomy and let consumer sales shift up to the Model Y?

Weird place.

 

[SO16]

Wow, I wish TSLA had NVDA’s PE. Would be great if Dojo could have some of that AI business.

 

[AndrewZ]

Speaking of screwings and bailouts, they come in many forms... we might expect these rules to relax and help out legacy somehow.
Model 3 is expected to loose the tax credit next month, but the revision...

"...will likely have a large impact on other EV makers in the US as the majority of them have supply deals with companies from abroad."

Tesla may lose $7,500 US tax credit on the entry-level Model 3: Report

Tesla has reportedly notified its employees in the US that it will soon lose the $7,500 tax credit currently available on the Model 3 Rear-Wheel Drive (RWD). Tesla sales in the US have boomed with […]

driveteslacanada.ca

I would expect a good chunk of the other 3/Y domestic demand will lose $3,750 of the credit as well for the critical mineral sourcing, we need more sources from North America (hello Quebec) and countries with free trade agreements (hello Australia) but how much domestic demand can be satisfied by these sources is the $3,750 question.

After this year vehicles will be disqualified from the credit entirely if they contain any battery components from China. After next year vehicles will be disqualified from the credit entirely if they contain any critical minerals from China/Russia/North Korea/Iran -- China and North Korea together currently control something silly like 95% of global battery-grade graphite production.

Need more sources from friendly countries or new tech to offset this.

 

[Snerruc]

Ok, I’m prepared to get blasted. Ford is building a plant outside Mason, Tn to build electric vehicles. It is larger than Gigatexas. Ground up designed for electric vehicle production. Tennessee labor(no unions). I think Ford gets it.

 

[Mengy]

Only in Europe at this time IIRC. Also based on the VW ID platform, with all the limitations that brings. Also what is the profit/loss and revenue share that will go to Ford and not VW?

Ah, this should be called the ID.4ord Explorer!