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

[Rarity]

Some interesting background to Elon's antipathy towards OpenAI. I would have put this in the Elon thread, but it seems that thread has been closed.

The secret history of Elon Musk, Sam Altman, and OpenAI | Semafor

In 2018, Musk wanted to take charge of OpenAI to beat Google but others opposed the move, putting Altman at the helm.

www.semafor.com

It's important to note that Musk has a feud with SBF-backed Semafor and that this is a one-sided and slanted account. It imputes motives to Musk that likely were never there. And it avoids certain facts, such as that Musk was the Chairman of OpenAI, the first $100 million in to the organization, and one of its absolute prime movers, and thereby minimizes Musk's contribution. That said, it's not the worst article ever.

The article only mentions in passing (and skeptically) Musk's recruitment of Karpathy to Tesla that was a big part of why Musk left OpenAI. It completely missed that Karpathy has recently returned to OpenAI and that Musk immediately unfollowed him on Twitter when it was announced. And it also doesn't really respect Musk's bedrock criticism that OpenAI lacks openness (and now, that it is a for-profit enterprise in the clutches of a monopolist).

For sure, this will be the subject of several business history books in the future. Hopefully, they will not be so one-sided.

 

[JimS]

When the time comes for appointing a new Tesla CEO & Technoking, Drew seems like the clear choice.

Even though historically the positions of CEO and Technoking have always been held by the same person, I don't think its a legal requirement. I think we can vote Elon in as Technoking for life.

 

[JimS]

Because the stock market will be closed tommorow for Good Friday, today is effectively an options expiration day. A survey of today's Tesla options trading, suggests that a closing share price of $185 would be the most profitable target for big option writers (hedge funds & market makers) with the ability to temporarily manipulate the share price.

I think we can expect @Papafox to insert one of his red dots on my chart at $185.

 

[Unpilot]

Because the stock market will be closed tommorow for Good Friday, today is effectively an options expiration day. A survey of today's Tesla options trading, suggests that a closing share price of $185 would be the most profitable target for big option writers (hedge funds & market makers) with the ability to temporarily manipulate the share price.

WHAT???? Market is closed tomorrow?!?

I....Will.....be...ok....

 

[Chocochip]

RHD cars are batched and will not see a consistent delivery like other countries so naturally when they swap production to RHD, they make sure to make as many as possible for the next quarter to deliver, not for end of quarter push. So we should expect UK to have a ton of RHD cars end of Q for next quarter to deliver if that's just how logistics ended up.

Elon mentioned the switch between RHD and LHD is not cheap.

This wouldn’t have been an issue if they had enough orders. You only end up with high inventory at EoQ (despite offering deep discounts for several weeks and incentives for delivery before March 31) if there aren’t enough customers waiting to take delivery.

I’m not sure why logistics keep being brought up as a reason for this… Tesla has been delivering MIC cars to the UK for the past 4 years, and they have delivered many more cars in a one-month interval before now. Did they suddenly become incompetent? Having a high inventory in the destination country at EoQ — meaning, all the transportation costs have been incurred, but there’s no corresponding revenue — is not the ideal way to smooth out the wave.

 

[mongo]

I think I know why Kimbal needed $$$

Spoiler: for the Twitter impaired

opening new resturant in Austin

https://twitter.com/x/status/1644124549942853632

 

[Krugerrand]

Removing the fingers of voodoo doll in 3, 2, 1, *snip*

 

[Singuy]

This wouldn’t have been an issue if they had enough orders. You only end up with high inventory at EoQ (despite offering deep discounts for several weeks and incentives for delivery before March 31) if there aren’t enough customers waiting to take delivery.

I’m not sure why logistics keep being brought up as a reason for this… Tesla has been delivering MIC cars to the UK for the past 4 years, and they have delivered many more cars in a one-month interval before now. Did they suddenly become incompetent? Having a high inventory in the destination country at EoQ — meaning, all the transportation costs have been incurred, but there’s no corresponding revenue — is not the ideal way to smooth out the wave.

According to Troy, Tesla right now is starting the quarter in Europe with 10% of their total deliveries for the quarter and to end the wave requires Tesla to be at 33%. So what you see is 10%...so just a warning, teslas intention is 3x of this eventually in the future. This has nothing to do with "unable to sell cars"..and everything yo do with unwinding the wave. Before Tesla started with 0 cars and no show room cars leaving places like the UK with the first month delivery center employees twiddling their thumbs and shorties claim demand cliff.

 

[GOVA]

We all know that Rivian and Lucid are in the 'world of sugar', but frankly I'd rather have them succeed instead of any current ICE manufacturers.

 

[Prunesquallor]

I think I know why Kimbal needed $$$

Spoiler: for the Twitter impaired

opening new resturant in Austin

https://twitter.com/x/status/1644124549942853632

Prime location

 

[Chocochip]

According to Troy, Tesla right now is starting the quarter in Europe with 10% of their total deliveries for the quarter and to end the wave requires Tesla to be at 33%. So what you see is 10%...so just a warning, teslas intention is 3x of this eventually in the future. This has nothing to do with "unable to sell cars"..and everything yo do with unwinding the wave. Before Tesla started with 0 cars and no show room cars leaving places like the UK with the first month delivery center employees twiddling their thumbs and shorties claim demand cliff.

You’re confusing “cars in transit” — which makes sense for unwinding the wave when the shipping from the manufacturing site to delivery destination takes one month — with “cars filling up delivery centres lots”. There is no logical explanation for having cars available for delivery + progressive price cuts + delivery incentives, other than insufficient demand for those specific variants. It’s entirely illogical to intentionally sit on deliverable inventory as a means of “unwinding the wave”.

 

[Artful Dodger]

Having a high inventory in the destination country at EoQ — meaning, all the transportation costs have been incurred, but there’s no corresponding revenue — is not the ideal way to smooth out the wave.

Yes it is, if the next shipload of RHD cars to the UK is not due anytime soon. How long should Tesla showroom staff be idle with no cars left to deliver *ideally*? Tesla doesn't need to clear out every car out of inventory just 11 days after the last ship arrived, just to meet some arbitrary EoQ deadline.

That is what smoothing the wave means. Tesla can let logistics lead the pace of deliveries, so reducing COGS greatly, limiting expidite fees while maintaining margins. The UK April plates will take care of the rest, and Telsa is well positioned to benefit from that peak sales period.

 

[Chocochip]

Yes it is, if the next shipload of RHD cars to the UK is not due anytime soon. How long should Tesla showroom staff be idle with no cars left to deliver *ideally*? Tesla doesn't need to clear out every car out of inventory just 11 days after the last ship arrived, just to meet some arbitrary EoQ deadline.

How does that explain the progressive price cuts throughout March for the inventory listings? How does it explain the 3,000 free SuC miles for taking delivery of ANY model or variant before end of quarter, if Tesla is happy to have cars available on the lots in the next quarter? Did Tesla decide that up to £6,000 off the regular price is no big deal? Is that “smart business”, as you call it?

Can’t have it both ways, I’m afraid.

 

[Singuy]

How does that explain the progressive price cuts throughout March for the inventory listings? How does it explain the 3,000 free SuC miles for taking delivery of ANY model or variant before end of quarter, if Tesla is happy to have cars available on the lots in the next quarter? Did Tesla decide that up to £6,000 off the regular price is no big deal? Is that “smart business”, as you call it?

Can’t have it both ways, I’m afraid.

Perhaps you don't understand what building inventory is. Not 100% of those cars have buyers yet, but new buyers are putting in orders every day. Tesla knows the order rate per day, so they shipped X amount of cars anticipating they will be sold before the next ship arrive.

In the mean time, there's nothing wrong with an EOQ push with cars on hand which are meant for sale in q2 just to give wall street something to talk about. Literally every product in the world is sold like this, especially for publicly traded companies.

 

[Words of HABIT]

Because the stock market will be closed tommorow for Good Friday, today is effectively an options expiration day. A survey of today's Tesla options trading, suggests that a closing share price of $185 would be the most profitable target for big option writers (hedge funds & market makers) with the ability to temporarily manipulate the share price.

Strike true Peter Pan.

How is this even legal?

 

[Chocochip]

Perhaps you don't understand what building inventory is. Not 100% of those cars have buyers yet, but new buyers are putting in orders every day. Tesla knows the order rate per day, so they shipped X amount of cars anticipating they will be sold before the next ship arrive.

In the mean time, there's nothing wrong with an EOQ push with cars on hand which are meant for sale in q2 just to give wall street something to talk about. Literally every product in the world is sold like this, especially for publicly traded companies.

There’s nothing wrong with deep discounts — effectively leaving money on the table, if your theory of overall demand matching overall supply is correct — just to hit arbitrary targets for Wall Street, huh? Do you think maybe £4,000 - £6,000 per car is a bit high just for “batching RHD production“ and oversupplying one market? And if that market is oversupplied, why is are deliveries down YoY in that same market, while total auto sales are up?

Anyway, it’s pointless arguing against people who are convinced Tesla can do no wrong and who will keep making excuses for it, so I won’t discuss this any further. The data is all there for those who care to understand it.

 

[SO16]

Tesla could sell more cars by advertising or lowering prices.

By lowering prices, it puts the screws to the competition more so.

Even though advertising may be better for investors due to higher ASP, I don’t mind forcing the rest of the industry to go along with it or die. Flush out the weak. Tesla is no longer playing nice.

 

[Chocochip]

Unwind the delivery wave to save on logistics costs.

Cut prices aggressively at the end of quarter to boost sales for Wall St.

Choose one? Choose both, and call it “smart business”!

 

[Chocochip]

Tesla could sell more cars by advertising or lowering prices.

By lowering prices, it puts the screws to the competition more so.

Even though advertising may be better for investors due to higher ASP, I don’t mind forcing the rest of the industry to go along with it or die. Flush out the weak. Tesla is no longer playing nice.

I have no problem with Tesla cutting prices to squeeze the competition, as long as Tesla’s sales actually go up and they clear out their inventory.

But pretending that price cuts + EoQ incentives + lower YoY and QoQ sales + lower market share + high inventory = *all good* is flat-out cultish.

 

[Singuy]

Unwind the delivery wave to save on logistics costs.

Cut prices aggressively at the end of quarter to boost sales for Wall St.

Choose one? Choose both, and call it “smart business”!

It's almost like they saved on cost just so they can drive demand by lowering the price or something....