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

[wtlloyd]

Sometimes the spring is a Jack-in-the-box, and sometimes the spring is a slinky, only good for traveling down the stairs.

 

[Mengy]

What I really miss around here is the constant drumbeat of "winding the spring". Isn't it about dang time the spring sprung?

The spring won't unwind until the macro environment improves, most likely not until the Fed reverses course and actually lowers rates. Until then I feel the entire stock market will be held down and trade mostly flat or even decline again.

The market will rebound eventually, but we still have a way to go I think.

 

[heltok]

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.

Even if GM/Ford/VW/Toyota would get bailed out by their governments, would that help them survive? Will a bailout help them master gigacasting, FSD, alien dreadnaught, optimus etc? If they go into restructuring are talent gonna be flooding there or leave them for Tesla?

The time of large government bailouts is over. Now we live in a time where the value to the customer comes from ecosystems, complex software, hardware optimizations from large scale production etc that no money from the government can help legacy solve.

Nokia was a large part of Finland's economy, could a bailout for them have saved them from Apple, Samsung etc?

 

[traxila]

Even if GM/Ford/VW/Toyota would get bailed out by their governments, would that help them survive? Will a bailout help them master gigacasting, FSD, alien dreadnaught, optimus etc? If they go into restructuring are talent gonna be flooding there or leave them for Tesla?

The time of large government bailouts is over. Now we live in a time where the value to the customer comes from ecosystems, complex software, hardware optimizations from large scale production etc that no money from the government can help legacy solve.

Nokia was a large part of Finland's economy, could a bailout for them have saved them from Apple, Samsung etc?

They will get bailed out at least once. Maybe the second time around they would pass?

Imagine the politicians behind such a bailout being able to fathom the issues you are describing.

Toyota especially would be allowed to fail only in conjunction with the country's economy totally collapsing.

 

[Zero CO2]

Here is the link to Ford’s presentation: Ford Motor Company - Investors - Information - New Financial Reporting Teach-In. Presentation is an Adobe link within the webpage posted.

On page 33 Ford indicates total worldwide 2022 EV sales of 96,000 vehicles (up from 61,000 in 2021). Ford reiterates a run rate of 600k by the end of this year and 2M by the start of 2027.

My math shows Ford will need to increase sales by 185% YoY for the next four years to hit that 2 million run rate in January 2027.

Best of luck to Ford, I think they will need it.

I have to give Ford credit in doing this as i am sure it was very difficult... their EV growth targets seem unrealistic but they have clearly acknowledged reality and have started on a journey that may result in their survival... the same cannot be said for other Legacy OEMs

 

[WolfHero]

Toyota makes EV's?

Best selling (within Toyota's line up EV, constists of one only)j bZ4X.

 

[Carl Raymond]

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.

Could it be that highland is model 3 refresh using unboxed process?? It would have record level margins once up to speed. Make great use of existing space.

If transitioning to castings, makes sense to take the full plunge into unboxed process.

It would allow the build of Monterrey factory with confidence and correct proportions for space allocation.

I don’t have a good track with guessing what Tesla do next. Kinda putting this forward so that somebody who knows better can pop this fantasy. Cheers.

 

[Blue horseshoe]

Could it be that highland is model 3 refresh using unboxed process?? It would have record level margins once up to speed. Make great use of existing space.

If transitioning to castings, makes sense to take the full plunge into unboxed process.

It would allow the build of Monterrey factory with confidence and correct proportions for space allocation.

I don’t have a good track with guessing what Tesla do next. Kinda putting this forward so that somebody who knows better can pop this fantasy. Cheers.

Highly unlikely. They talked about using this new process in Mexico and if successful they would copy paste to all of the other gigafactories.

 

[Thekiwi]

Could it be that highland is model 3 refresh using unboxed process?? It would have record level margins once up to speed. Make great use of existing space.

If transitioning to castings, makes sense to take the full plunge into unboxed process.

It would allow the build of Monterrey factory with confidence and correct proportions for space allocation.

I don’t have a good track with guessing what Tesla do next. Kinda putting this forward so that somebody who knows better can pop this fantasy. Cheers.

Would be good if Tesla could standardize even more parts/processes between the 3 & Y, especially given the potential IRA ineligibility of current Model 3 SR. Would love to see the 4680 pack go into the US model 3 SR.

 

[Thekiwi]

OMG

Great quote from the article:


Have you ever heard of a startup that suffers $3 billion of losses in one year?

Did you miss the last 10 years of startup history?

 

[Ogre]

What I really miss around here is the constant drumbeat of "winding the spring". Isn't it about dang time the spring sprung? Spring has sprung around here, but (judging from my portfolio) apparently not "the" spring. Or are we now at a fair evaluation of Tesla with regard to TSLA, so the spring has no more ... spring to it?

Spoiler: Strangely OT

And another thing that has always tickled the back of my mind: how does "the spring" relate to a certain oft-discussed mythical machine of Big Time's? Is it an integral component, or an external source of tension?

Anyway, sorry to spring all that spring talk on you good folks anyway. Back to more pertinent discussion like the Fall of Troy or something.

Didn't you ever have a mechanical watch? Don't you remember when they told you not to overwind it because you could break the spring?

The spring has been overwound.

Metal fatigue.

Mental fatigue.

 

[MC3OZ]

Troy could probably land that sales forecasting job tomorrow @ Tesla if he wanted.

Forecasts are never totally accurate right off the bat. Budgets are never totally accurate, schedules are never totally accurate, even reporting actuals is subject to error. If you get into this line of work, there is theory and models behind all of it and it varies by industry -- AACE is one big organization that publishes documentation and does testing/certification specifically for this type of stuff and producing a solid forecast is where it all converges.

If I could filter out every post about Troy in this thread, I would.

Troy does a good job of forecasting, but to me his forecasts are just short term noise.

By now we have all formed an opinion, whatever you think, just ignore posts about Troy and move on, it isn't important.

A separate Troy thread would be good, for those that are interested.

 

[Ogre]

OMG

Great quote from the article:


Have you ever heard of a startup that suffers $3 billion of losses in one year?

Rivian is still considered a "Startup" by many (not me!!) and I think it's losses exceed that... or are at least close.

This is the auto business. The massive up front investment is a big part of why we haven't had any successful startups in decades.

 

[Thekiwi]

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

This is gift from heaven for Tesla Salespersons trying to move any excess US model 3 inventory before quarter end.

Wouldn’t surprise me if the new rules aren’t as bad as expected, either with a longer phase out period or more relaxed rules - especially if GM/Ford etc would be impacted badly.

 

[2daMoon]

Highly unlikely. They talked about using this new process in Mexico and if successful they would copy paste to all of the other gigafactories.

I think the part to focus on is how, if there is any relationship between Tesla's "Highland" and Ford's "Highland Park" project, the latter was about the manufacturing facility, not the model of car. Tesla just revealed a staggeringly amazing process for manufacturing a car. This could be only a coincidence in the naming, but, there are a enough correlations between Highland and Highland Park to lend some credence to this theory.

If so, this weighs heavily toward the factory being "Highland" and not any particular model. It could very well be that the original "unboxed" factory will be building a yet-to-be-announced model before the process is adapted to other factories and models.

Eventually, the Unboxed process may trickle down to current models and other unknown models.

 

[jerry33]

Toyota makes EV's?

Yes, but sometimes the wheels fall off.

 

[winfield100]

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.

@Cosmacelf
uj, 25+ years ago, got to test drive on way way back ,1998
("back, turn back, the hands of time" or "froth upon a dirac sea")

Ford Ranger EV - Wikipedia

en.wikipedia.org

 

[KBF]

The real question is why we would follow this survey in the first place. Surveys are terrible. They seriously suck. I cannot emphasize this enough. There are good reasons why professional social scientists rarely use them as data sources, and the analysis presented in the linked article would certainly not pass any legitimate peer review. Surveys almost always suffer from issues with various forms of bias and construct validity, and the authors of this article do precisely zero to discuss how they addressed any of these problems, or even if they addressed them at all.

In this case, the probable construct validity issue is that the report's authors assert that the survey results indicate likely problems with Democrats not wanting to buy Teslas due to Elon's recent behavior and political participation. However, this hypothesis appears to have had no actual validation, just assumption and conjecture presented as fact or as "the results suggest X" without any further discussion of reasons why the results actually might not suggest X and what research and analysis was done to rule out such possibilities. Jumping to conclusions with insufficient evidence and without proper attempts to falsify is not science, it's opinion and intuition.

Is there any past data indicating, at a minimum, a meaningful statistical correlation between survey results such as this one and actual consumer behavior? Did the researchers actually go try to verify whether Democrats, Republicans and Independents are actually changing their EV buying trends, market research, word-of-mouth promotion rates, or any other important related behaviors as a result of Elon’s choices? That would be the obvious first step for any attempt to establish construct validity here, and the authors of this article presented no indication that they even thought to ask this question, let alone try to answer it by integrating other data sources beyond just the survey itself in isolation. Correlation between the measured variable and the implicit outcome it's supposed to track must be demonstrated before arguing for the likely existence of a particular causal mechanism. This is like surveying people "Does especially hot weather make you more likely to get a second scoop on your ice cream cone?" and then not following up by checking for a statistical relationship between the ambient temperature and actual sales data at the ice cream truck.

Here's another red flag. The article says:

Making a declarative statement like this without mentioning the possible influence of negative response bias is bad form. Often survey respondents are more likely to express negative opinions than positive ones. It's possible that this effect explains the entire differential observed in the survey results. The authors have a professional responsibility to discuss this and they failed to do so.

Next, let's look at the Personal Behaviors responses to get a sense of how representative the survey sample group is of the broader US car-buying population. For example, 8% of respondents already drive an EV, 13% have home solar, 13% have an e-bike that they choose to ride instead of driving, and 19% have a home heat pump. Also, 87% of respondents said they are registered voters, far more than the actual US average of closer to 67% of eligible adults being registered, which likely means that the sample group is on average more politically motivated than the general American population. Overall, this group of people obviously differs from the US population in some key ways that might be relevant to how much they care about Elon’s political activism.

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Does the survey report disclose how this sample of individuals was selected, how the researchers motivated respondents to spend time answering a detailed 50-question survey about climate change topics, what the purpose of the study was, how it was funded, or what potential ethical conflicts of interest may have affected Benenson Strategy Group's ability to conduct this research in an impartial, objective manner? No, no, no, no, and...no.

You know what, since they didn't discuss this whatsoever, let's look at some of their clients in the political and lobbying sphere. Hmm...I see 100% of the listed political campaign clients were for Democrats or major organizations within the Democratic Party. I see David Axelrod quoted as thanking Benenson for helping President Obama get elected. I see lobbying groups almost entirely in support of American leftist politics, with a couple nonpartisan neutrals like AARP and Pew Charitable Trust. I also see 100% of the ballot initiative campaign clients were in support of Democrat-sponsored causes such as Medicaid expansion and minimum wage increases. I'm not making a personal statement of my own affiliation here but this does indicate that Benenson is very unlikely to be a neutral, unbiased research organization for answering questions regarding US politics and this point raises a lot of concerns about what agenda Benenson may have had in publishing this article about Elon/Twitter/Tesla.

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Further, in the article about Elon and Tesla, the authors cite a heavily biased Vox article that, among other things, presented this graph from YouGov, the other organization that recently did widely publicized political polling in relation to the EV market and Tesla. The results apparently indicate that Toyota and BMW are now more preferred than Tesla by more prospective EV buyers in America and that even in March 2022 (before the announcement of Elon’s intent to buy Twitter) Tesla was preferred by only 17%. I can't help but notice that this polling result does not remotely align with actual sales data and other more reliable indications of EV interest like Google search trends. Also, bear in mind that Vox is a consistently left-leaning media company, which adds more suspicion of bias and perhaps ulterior motives affecting this article.


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In summary, I would recommend that everyone completely disregard this survey.

Wow, I applaud you for your response; you put in 1000x effort more than a survey deserves...

I do agree with you, and as investors we do need to be careful about how to weight data and evaluate. It's not easy, but these kinds of surveys are pretty much the worst.

I have sometimes gotten nervous seeing the constant complaints online (especially on this site) about service and how some customers are mistreated - some of which appear to actually be legitimate complaints - and I wonder how Tesla has a chance at retaining any customers at all. My experiences have essentially been positive since my ownership began in 2012 (not perfect, but I've always been treated respectfully, but some service has been inconvenient), but I'm just 1 client. So there's a niggling thought when the doubts rise that maybe I should sell my shares before "the public realizes how terrible service/quality is"...

But then I see statistical data, and apparently Tesla has the highest retention rates (countable facts), highest customer satisfaction ratings (a survey... But at least they're asking actual customers...) and is still growing the fastest of any BEV company (countable facts). So there's a bit of cognitive dissonance - do I trust the hit pieces (and legit complaints on this site) and panic, or do I trust statistics (that can be manipulated, too)? Do I give in to fear/prudence?

I think it is worth considering - Tesla isn't perfect. Then I consider the alternatives and all the crooked dealerships I've had to deal with in the past, and realize that despite Tesla's flaws, it's still an improvement overall. The unfortunate % that have bad things happen can disagree and hate Tesla (just sell me your shares, please).

And the recent news about how Chinese competitors cannot keep up with Tesla's price drop. They're assuming it's temporary, but I wouldn't be surprised if it's just matching their margin target and is permanent barring inflation... More affordable cars = more grace for customer service errors, and more resistance to FUD, perhaps.

 

[MC3OZ]

I think the part to focus on is how, if there is any relationship between Tesla's "Highland" and Ford's "Highland Park" project, the latter was about the manufacturing facility, not the model of car. Tesla just revealed a staggeringly amazing process for manufacturing a car. This could be only a coincidence in the naming, but, there are a enough correlations between Highland and Highland Park to lend some credence to this theory.

If so, this weighs heavily toward the factory being "Highland" and not any particular model. It could very well be that the original "unboxed" factory will be building a yet-to-be-announced model before the process is adapted to other factories and models.

Eventually, the Unboxed process may trickle down to current models and other unknown models.

The hype about Model 3 Highland started late Q4 2022 or early Q1 2023, well before Investor Day.

There were photos of partially covered cars claimed to be Model 3 Highland.

Early rumours played up the significance of Model 3 Highland, later rumours downplayed it.

I've seen one rumour that Model 3 Highland production in Shanghai will start in September.

IMO the timeline is the strongest clue, if it was really a minor upgrade, it would not be 9 months from the first beta builds observed in the wild to volume production.

According to rumours Shanghai has made some preparations for Highland and some processes have already been optimised.
What that could be is, cutting over to some parts and sub-assemblies that will be used on Highland.

If Model 3 Highland involved front and rear castings and a 4680 structural battery pack, that could at least partially explain the 9 month delay. new Gigapresses, 4680 cells and equipment to build the battery pack would be needed.

If Model 3 Highland uses new motors, that might also partially explain the delay, but motors are one part that might already be in new cars.

If Model 3 Highland uses a new wiring harness and a 48V architecture, that also explains the delay it will take time for suppliers to ramp production of 48V parts.

Brake-by-wire is the other possible upgrade, IMO that is a better performing solution with lower costs and simplified build.

But all of this doesn't mean Model 3 Highland is an "unboxed" Gen3 build at this stage. A lot of the body-shop, paint and GA process will remain the same.

And it might not be everything on the list, at least not initially,.

 

[Ogre]

Could it be that highland is model 3 refresh using unboxed process?? It would have record level margins once up to speed. Make great use of existing space.

If transitioning to castings, makes sense to take the full plunge into unboxed process.

It would allow the build of Monterrey factory with confidence and correct proportions for space allocation.

I don’t have a good track with guessing what Tesla do next. Kinda putting this forward so that somebody who knows better can pop this fantasy. Cheers.

This is something I’ve contemplated as well. At one point in time, Tesla had said GF Texas would be for Model Y, Cybertruck, **and** Model 3. That fact was quietly scrubbed from their site a while back.

Here’s another puzzle for you. There are 4 6k Ton Gigapresses in Texas, but current Model Y output is only about 200,000 cars. With that many presses, should be able to produce more than half a million a year. Now it looks like a second 9k Ton press is arriving which means they will have 6 presses.

Do we know with any certainty if the Cybertruck requires 2 9k Ton presses? If a second 9k Ton press is being installed, is that for additional Cybertruck capacity?

Just spitballs here.