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

[Gigapress]

The reported data is Vehicles held in dealer inventory

How do you know this? I was unable to find clear confirmation in the Cox article or in searching for vAuto for the raw data Cox had referenced.

Manufacturer Days on hand is harder to see with reliability since an habitual practice is to avoid 'completing' a slow moving vehicle by not installing some part so keeping it in WIP rather than inventory.
There are many tricks, including sending inventory as demonstrators, 1970's style lease and buyback contracts and so on.

TSLA does not do any of those things so Tesla DOH is unlike any other OEM. They actually disclose directly what is happening. Imagine that!

Yeah, Tesla reports the inventory in the entire pipeline without any accounting tricks from what I can see. If you're right about the Cox data being only for dealership holdings, then that means Tesla is beating 2nd-place Toyota in the factory-to-customer inventory ranking by much more than 2x.

Remarkably, it was Toyota who invented modern inventory reduction techniques, just-in-time logistics and demand-pull kanban systems for automotive manufacturing, and now Tesla is dunking on Toyota in this department, at least on the outbound deliveries part of the value chain.

 

[petit_bateau]

Not seeing how I can be reading it incorrectly:
Global vehicle inventory (days of supply): 16
View attachment 924902
The number is End of Year inventory/ deliveries for year, not averaged quarterly inventory.
View attachment 924901
With your number:
70,249/1313851*300 = 16.04
Since everything is ramping up, this gives a more pessimistic number (for those who prefer low in-transit figures), but does show a somewhat uniform trend over time.

You are misunderstanding it. It is essentially a balance sheet exercise. What was there in inventory at midnight on 31/12/2022. It is not the average for the year. The only averaging going on is to use the annual production (/300) rather than the quarterly production (/75) and I think you are being confused by the way they are describing that in the small print.

 

[navguy12]

Ford sales. 10.8K sales of EV's. Interesting that Mach E was down 20% Y/Y. They say due to a plant shutdown but there is almost 1 quarter of inventory at 4.6K of vehicles. I think really hurt by the Model Y price reductions.

https://s201.q4cdn.com/693218008/files/doc_news/2023/04/q1-2023-sales-final.pdf

…or perhaps word has gotten out that travelling long distances in a Mach E isn’t as seamless as a Tesla with the current charging infrastructure.

 

[Featsbeyond50]

Does your comment suggest that scale economies, logistics efficiencies and manufacturing advances are imaginary?

Nope. It means stock prices can be irrational longer than you can remain solvent.

 

[Buckminster]

https://twitter.com/x/status/1643285490358009857

 

[Ogre]

ok i agree Cybertrck will quick pass the Hummer but they are still producing Hummers. This article says 500 in Feb. There is a sales freeze right now due the battery water ingress issue.

GMC Hummer EV Deliveries Have Absolutely Cratered This Year

The GMC Hummer EV has had its fair share of issues, but a stop sale relating to an improperly sealed battery means very few satisfied owners.

www.thedrive.com

That issue is from October. And maybe even predates that. Did they produce more trucks with faulty batteries or? This makes zero sense.

I’m going to stick with my assertion because those trucks are clearly not finished until this is resolved. Maybe it’s just a technicality, but if GM was confident the trucks were “done” they’d be in customer driveways.

GMC Hummer Recalled For Poorly Sealed Battery Packs

Water can get into the battery pack of the new Hummer and cause the vehicle to shut down.

www.roadandtrack.com

 

[Paul_SF]

Warning shots fired:

https://twitter.com/x/status/1643335710840070148

 

[WolfHero]

Saw this gem in my news feed this morning. Newsweek has awareded Akio Toyoda of Toyota "Auto Disruptor Executive of the Year". For some reason, I can't find a "Sponsored" tag anywhere in that article... strange.

Some quotes:
While most of the world's auto market is rushing to electric vehicles, Toyoda, a car racer himself, put his company's mission forward as "no more boring cars," rather than battery-electric vehicles (BEVs) first.

Toyoda said at a dealership meeting in October. "Just like the fully autonomous cars that we are all supposed to be driving by now, EVs are just going to take longer to become mainstream than media would like us to believe."

Planning to sell fuel cell vehicles, offering up gasoline, hybrid and BEVs next to each other on dealer lots and saying those plans proudly is a disruptive pattern of behavior that doesn't just stand out in contrast to promises by the company's biggest competitors, it's an acknowledgement of what most of the public knows, and most executives whisper when you get them alone—the world isn't ready to go all-electric.

Toyota's New Chairman Refuses to Go With the Flow—and It's Working

 

[mongo]

Saw this gem in my news feed this morning. Newsweek has awareded Akio Toyoda of Toyota "Auto Disruptor Executive of the Year". For some reason, I can't find a "Sponsored" tag anywhere in that article... strange.

Some quotes:
While most of the world's auto market is rushing to electric vehicles, Toyoda, a car racer himself, put his company's mission forward as "no more boring cars," rather than battery-electric vehicles (BEVs) first.

Toyoda said at a dealership meeting in October. "Just like the fully autonomous cars that we are all supposed to be driving by now, EVs are just going to take longer to become mainstream than media would like us to believe."

Planning to sell fuel cell vehicles, offering up gasoline, hybrid and BEVs next to each other on dealer lots and saying those plans proudly is a disruptive pattern of behavior that doesn't just stand out in contrast to promises by the company's biggest competitors, it's an acknowledgement of what most of the public knows, and most executives whisper when you get them alone—the world isn't ready to go all-electric.

Toyota's New Chairman Refuses to Go With the Flow—and It's Working

*spit take *

If by "world" they mean gasoline and hybrid dependent legacy manufacturers...

Toyota Motor North America Reports March, First Quarter 2023 U.S. Sales - Toyota USA NewsroomToyota Motor North America (TMNA) today reported March 2023 U.S. sales of 176,456 vehicles, down 9.1 percent on a volume and daily selling rate (DSR) basis versus March 2022. Sales of electrified vehicles for the month represented 27.5 percent of total sales volume.


For the first quarter, TMNA reported sales of 469,558 vehicles, down 8.8 percent on a volume and DSR basis versus March 2022. Sales of electrified vehicles for the first quarter totaled 118,836, representing 25.3 percent of total sales volume.

 

[M|S|M MYP]

What really upsets me in this case is, there are hundreds of people who were wrongly incarcerated and later released after serving harsh sentence in a maximum security prison where prisoners are treated like dogs by both the authorities and by other incarcerated criminals. When they get acquitted and released after a few years or in some cases after a decade or two, they don't get awarded this much.

But this $135M the jury initially awarded for name calling is a huge travesty. All this after the company took action and fired the perpetrators.... and get this... the victim even encouraged his son to join Tesla. If he is so emotionally scared, would he recommend his son to join Tesla?

So his son could file a similar lawsuit 6 months after?

 

[Mengy]

Warning shots fired:

https://twitter.com/x/status/1643335710840070148

I hope Tesla does go after the corrupt aspects of Wall Street. That would be a very welcome change of the norm.

 

[betstarship]

I hope Tesla does go after the corrupt aspects of Wall Street. That would be a very welcome change of the norm.

Just an assumption, but think this is healthy for going international too. No doubt Tesla is dealing with a lot of different regulatory fights in many, many countries.

 

[AndrewZ]

https://twitter.com/x/status/1643285490358009857

Not sure about the price forecast side of things but would posit this for commodities in general: attempted putting together something of an overlay of the 5-year charts for a few commodities but it's far from perfect without having exports of the data. I tried including cobalt and zinc but it ends up looking too busy, however they follow a similar pattern

Although all except Copper are significantly down from the highs and lithium in particular has plummeted from that peak, these are all still way up from say 2020. Lithium started 2020 at about 50,000 CNY/T, so at current levels it's still over 4x 2020 prices.

Tesla's vehicle pricing bottomed at EOY 2020 to the start of 2021 and peaked into the end of last year, but most of the prices have returned to near those 2021 lows. This is only commodity futures pricing and we don't know how exactly the prices flow through to procurement, or what the labour side of things looks like, but this definitely seems to reinforce the idea that costs for the resources themselves are likely elevated relative to vehicle pricing and margins need to be protected through efficiency of scale and whichever other means are available.

 

[Artful Dodger]

Yo Zso-Zso, Benedict Evans has a fantastic resume and over 320k followers on Twitter. He's generally known as an excellent futurist and trend-finder. I appreciate your opinion

Lol, name checks out. That guy feeds at the Q teet all day long to get his talking points.

 

[Ogre]

Lol, name checks out. That guy feeds at the Q teet all day long to get his talking points.

His follower count and reputation are from long time Apple analysis which maybe flavors his views on Tesla.

 

[Artful Dodger]

Sounds like my recent investment approach.

Lol! In rhetoric, the principle of symmetry requires a plot with a balanced structure, proportionate in it's two halves. That is, sadness must mirror joyfulness, jubilation pairs with despair, and loss literally follows gain.

To balance symmetry in this story, the plaintiff would have taken out a large margin loan against his $15M judgement, and put it all in TSLAQ-approved Options contracts.

He would then close those contracts with perfect timing, and promptly move all his borrowed winnings into a certain Bay-area blue-chip* Regional Bank stock. Followed by the Margin calls. Curtain drop, fade-to-black.

Cheers!

*as rated by Moody's on Feb 01, 2023

 

[betstarship]

This was a good interview on the current market regarding inflation and retirees:

How Inflation and Valuation Affect Safe Withdrawal Rates

Bill Bengen builds off his groundbreaking 1994 research that led to the creation of the 4% rule.

www.morningstar.com

Snippet:

Can We Predict Safe Withdrawal Rates?​

Benz: To follow up on that, and thinking about the current time frame, it does seem like in some respects, from that standpoint, we're looking at a perfect storm right now, and that we do have fairly high equity valuations, rising inflation, and very low bond yields. So, what does that translate into, from your standpoint, with respect to, say, starting withdrawal rates?

Bengen: The current environment it just sends you off the charts. We have valuations--we're almost 40 on the CAPE, which is only achieved once before, but we have higher inflation than was present when we reached that 40 level before. So, literally, it's almost impossible to tell what the safe withdrawal rate will be from this environment. It's unprecedented. I'm hoping that the 4.7% rate I developed recently holds, but there's possibility it might not if inflation becomes sticky and becomes like a 1970’s kind of phenomenon. Of course, that's not certain yet. We don't know--it may return; it may be transitory.

 

[SpaceXaddict]

Signs of too many gamblers playing Tesla options vs actual investors that is affecting the sp movement.

People are just buying the rumor (no news) and sell the news(good or bad). So real execution seems irrelevant while speculative execution seems important at driving the sp.

That sounds like an opportunity to me!

 

[SpaceXaddict]

The norm for the rest of the industry is to have cars sitting for an average of a couple of months at dealerships waiting for the right customer, whereas Tesla still doesn't even have standard same-day purchasing like other car companies or just about all consumer retail businesses in general

This is just astounding. So you think I should buy this car, but I can't just go buy one TODAY? Total opposite of the typical car lot "what can I do to get you to buy this RIGHT NOW?"

Tesla’s actual fundamental business model is a true just-in-time, inventory-light design because they don’t park cars for months accumulating dirt, bird droppings, and costs from capital sunk into the inventory and less-obvious costs like insurance, security and property tax. The big picture for Tesla’s inventory is not the modest rise in the second half of 2022, but rather the online ordering and lack of traditional dealerships.

This is why I think Tesla is going to Just-in-time pricing too. Once they get the delivery chain figured out, I think they will start updating prices more frequently, maybe twice a month, then weekly, then it will start changing daily.

Tesla is going to start having an *exchange rate* rather than a price. They will do this to optimize the demand to come as close to perfect alignment with production as they can.

If they can do that perfectly, then customers will be able to order a car and get that car on a date that is equal to the delivery time from the factory to their location.

No more backlogs, and no more prices being too high or too low.

This is such a radical change that nobody is trying it. It literally wasn't possible in the past.

 

[M|S|M MYP]

Tesla is going to start having an *exchange rate* rather than a price. They will do this to optimize the demand to come as close to perfect alignment with production as they can.

Exchange rate as in 500k doge coin for 1 SR M3?