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

[StarFoxisDown!]

I would sign up for FSD in a heartbeat if it was $129 per month! No way I'm spending $15k.

I just don't get it. It's dumbfounding.

If affordability is already an issue, the notion that FSD at $15k or $200/month is just living in la la land. Obviously, Tesla doesn't want to piss of people that just purchased FSD outright. So why not just keep FSD outright purchase at $15k and/or remove the ability to buy FSD outright going forward but offer FSD subscription for $129/month.

It's not like they're losing money/margin but doing this. I can guarantee you if people can't afford a $50k car in mass, they sure as hell aren't outright buying FSD at $15k. I wouldn't be surprised if the take rate on FSD outright purchase right now is barely anything at all. In fact, it's probably causing a material amount of ASP decrease since when interest rates were lower 1-2 years ago, people were adding on the $15k FSD purchase through the loan. That's not possible at interest rates of 6-8%.

Plus, having more of the fleet actively using FSD gives Tesla more and more data. It's very beneficial for them to get as many people using FSD on the fleet as possible. Yes I know it runs in the background of every Tesla, but the data collection is not the same as when FSD is actually active.

The whole thing is just insanely frustrating. They have an opportunity today, not 2 years from now, to start forcing their business to transition into a SAAS business and yet they're being stubborn about this for a reason that no one seems to understand

 

[Ogre]

2024 Tesla Cybertruck Prices, Reviews, and Pictures | Edmunds

Tesla's Cybertruck is finally a reality, and it's packing some impressive specs. Here is everything we know about the Cybertruck. Read more at Edmunds.com.

www.edmunds.com

Estimated Price: $40,000-$78,000

2023 Rivian R1S Prices, Reviews, and Pictures | Edmunds

Research the 2023 Rivian R1S with our expert reviews and ratings. Edmunds also has Rivian R1S pricing, MPG, specs, pictures, safety features, consumer reviews and more. Our comprehensive coverage delivers all you need to know to make an informed car buying decision.

www.edmunds.com

Estimated Price: Starting around $78,000

With Tesla opening up their supercharger network now, is it less likely or more likely for Tesla to eat in to Rivian's deliveries starting in Q3/Q4?

Cybertruck is already eating into Rivian deliveries.

Rivian's 2 year backlog is gone, I can order a Rivian and get it in 4 months or less. I think much less has become quite common. I see people on Twitter "Rivian reservation came up, should I buy it or wait for Cybertruck specs?".

 

[Krugerrand]

Did anybody suggest all should be saved? I hope no capitalist would ever suggest such.
We probably all have a list of probable survivors and others even now on life support which oddly die quickly without strong external support.

Tesla doing it all by themselves? Even the most arrogant Teslaphile knows better than that. As Elon has repeatedly said. Tesla would not have survived had not Toyota given them the Fremont factory for the modest prove that Toyota itself funded and bought the original RAV4 EV drivetrain from Tesla. Then the Model S would not have happened without Mercedes Benz that bought Model B EV drivetrain for them and provided switchgear, following system, suspension and other supplier help. Then there is the US government loan.

Those are only three. Elon has more examples.

Truthfully without Tesla and Elon most of EV development would have been much slower, and without Elon Tesla as we know it would not have happened.

Obviously all three of those did very, very well from their arrangements with Tesla.

That is quite different than "...doing it all by themselves".

Even now Tesla thrives because of many factors including cooperative governments making new factories easier, suppliers providing crucial elements.

We must know that the Chinese government and Shanghai government gave crucial help to Tesla. The Brandenburg government does too, as do those of multiple parts of Texas.

Tesla and Elon are heroic! They're crucial. By exaggerating their achievements we diminish their accomplishments. Were we discussing SpaceX we'd need to add NASA, without their support SpaceX would not have survived.

So, absolutely much of those enabling figures and to be kicked, cajoled and tricked into cooperating. Tesla and Elon deserve credit for that too.

But no, Tesla's not doing it by themselves. Elon would never say such a thing. He knows better.

Ok, so your take is they were simply a catalyst with much help along the way? And the world would have transitioned to sustainability without Tesla just would have taken a bit longer?

Is that accurate?

 

[EVNow]

Elon has been known to use hyperbole.

That would be an understatement

 

[mongo]

Hey @Artful Dodger, bounced at $0.13 above you know what..

From Master Plan Part 3 (last slide):

Seems like an obvious fit with the Semi platform.

View attachment 930244

That is not Tesla's roadmap, it's OICA data with Tesla's lineup added in as "Tesla Equivalent".

 

[2daMoon]

Is that accurate? I was thinking that the production scale would be quicker for Cybertruck because its designed to be built for manufacturing. I'm guessing the the cost to manufacture will be lower too (thus increasing margins until Tesla price cuts go into effect for that model too...).

A good question begging for an answer.

I look at over a million pre-orders and compare this to other Tesla model ramps.

Being very optimistic, if that historical pace of ramping tracks, there should be at least a year, maybe two, before the backlog can be pared down via deliveries. Plus, any cancelations when time to buy comes for those not ready.

 

[Ogre]

If affordability is already an issue, the notion that FSD at $15k or $200/month is just living in la la land.

I don't think Tesla wants everyone buying FSD right now. They want enough people to test it and tune it, but it's not a great value for people (like me) who just want the end product. (Napping while driving!)

I suspect once they get the final, we will see more aggressive tweaks to subscription pricing to make it more appealing.

 

[CHGolferJim]

These were all on the lower end already, it will be interesting to see what the higher end recalibrate to.

Gary Black — $370 to $320

 

[2daMoon]

Cybertruck is already eating into Rivian deliveries.

Rivian's 2 year backlog is gone, I can order a Rivian and get it in 4 months or less. I think much less has become quite common. I see people on Twitter "Rivian reservation came up, should I buy it or wait for Cybertruck specs?".

CT may be eating into Rivian's "orders." Probably have been all along.

Until Rivian have unsold inventory piling up, their deliveries are at peak for their production rate.

 

[MountainRatMat]

Bigger picture, it’s indisputable that there is a very limited market for 40k cars, and if Tesla isn’t already rubbing against that limitation, it certainly will as it rapidly grows production.

Shurely you can't be serious:

New-Vehicle Transaction Prices Trend Downward as Incentives Rise, According to Kelley Blue Book - Cox Automotive Inc.

According to Kelley Blue Book, the average transaction price for a new vehicle in the U.S. in February 2023 declined to $48,763.

www.coxautoinc.com

I would like to dispute your indisputable statement

 

[Quesder]

So, what? It’s irrelevant. As long as they make a profit on each car, keep cutting costs, keep improving efficiencies and keep increasing production and sales quarter over quarter and year over year they can continue to expand and move toward the end goal of sustainability.

Were you under some illusion that Tesla would be able to sell millions of cars per year for an ASP of 50k+ and margins in excess of 20%+ for infinity regardless of macroeconomics and everything else? No, you couldn’t possibly be.

It doesn’t matter how they get there, it only matters that they get there. Otherwise we die.

The problem is about Share Price in this forum. Yes, Tesla will grow on revenue, and selling cars at $25000 as many as Toyota, but without an exceptional margin, the SP will not be able to keep at the current level, let alone going UP.
If Tesla sells the same amount of cars as Toyota and with a similar margin, then the market value will be at most 2 times of Toyota. And you can calculate how low the SP will be.

 

[30seconds]

Elon could not have been clearer on the call that they have been lowering prices to match demand with supply. The only reason stated in the call for why they had to lower prices more than they anticipated (based on the miss on their own margin guidance) is the economy. But other factors could be at play, including increased supply by both Tesla and others.

Bigger picture, it’s indisputable that there is a very limited market for 40k cars, and if Tesla isn’t already rubbing against that limitation, it certainly will as it rapidly grows production.

So we know Tesla needs to have a car priced around $25k to sell its long term supply. The trillion dollar question remains, can Tesla sell at that price point with a healthy margin, or does Tesla really need FSD to succeed to be a trillion cap company?

Hopefully we will see something on Project Highland. If they can reduce COGS on the model 3 then maybe we can see an increase in automotive margins and a price cut. They don't even sell the LR AWD Model 3 currently - you can only buy short range or performance.

 

[Max Plaid]

I think we can firmly put to rest that any hidden meaning statements or products like (burnt hair) does NOT mean “burn the Tesla shorts”.

What if this is one almighty bear-trap being set...?

(yeah, yeah, I know... I'm an eternal optimist!)

Come to think of it, might mean to burn the short-shorts we all bought a couple of years back...

 

[Sancho]

Shurely you can't be serious:

New-Vehicle Transaction Prices Trend Downward as Incentives Rise, According to Kelley Blue Book - Cox Automotive Inc.

According to Kelley Blue Book, the average transaction price for a new vehicle in the U.S. in February 2023 declined to $48,763.

www.coxautoinc.com

I would like to dispute your indisputable statement

Ark Invest has a nice graph showing the addressable car market at each price point. In order to address more than 50% of the market, the price has to go below $30k.

 

[Oveeus]

I just digested through the while ER, and I wanted to share my $0.02.

Just like how I previously have said, the main idea is scale.
Building new factories takes time. Setting up logistics takes time. Scaling up on current productions takes time.

But be greedy when others are fearful.

Given the current macro environment, most companies would be cautious on their expenses and future expansion. At Tesla, this is something they take into account. We have shaved most of the debt while still maintaining cashflow positive as expansion keeps on progressing. Other legacy manufacturers are ridden with debts. And at current cost of borrowing, it's very costly to fund EV transition in any significant scale for anyone except Tesla.

Let's suppose that this economic cycle is going to take a whole year, which is ok as most economic downturns last 8-14mths. In this one year period, Tesla is going to continue to expand in terms of absolute volume. By the end of the economic cycle, wit Giga Monterey coming online, we will very possibly be looking at 3M/yr production or more. And I think Tesla would be at a great position as no other company would come even close to be able to do the scale that Tesla is doing.

It's going to be in the best position to negotiate the price of any resources to build cars. This is similar to what Apple has been doing in the smartphone industry. Since they have such a volume that very few other companies have, they are able to dictate a lot of things.

This will be market power. And such power is what made the difference between Apple and Nokia. Apple was using components that Nokia didn't use or use very little. By the time Nokia wanted to make the shift, Apple was already commanding a huge volume while Nokia was still doing forecast on how many they can sell.

 

[InTheMiddle]

Ok, so your take is they were simply a catalyst with much help along the way? And the world would have transitioned to sustainability without Tesla just would have taken a bit longer?

Is that accurate?

My take is that Tesla's official mission statement is "Accelerating the World's Transition to Sustainable Energy". It's not "Single-handedly Transitioning the World to Sustainable Energy All By Ourselves". Tesla's mission is "Accelerating" it - and they're doing an incredible job of accelerating it far, far faster than it would have occurred otherwise.

Tesla and Elon are heroic! They're crucial. By exaggerating their achievements we diminish their accomplishments.

Very well said. Exaggerating achievements or refusing to acknowledge areas where they may have come up short belittles how out audaciously ambitious their many goals are, and shrinks the recognition of how great their achievements are on what they've actually accomplished and continue to deliver on.

 

[Artful Dodger]

Hey @Artful Dodger, bounced at $0.13 above you know what..

Lol, came here to post this:



A 162.67 Close today - 10% tomorrow closes the gap to Jan 25, 2023 w/o triggering the uptick rule. Mischief managed.

But since you're here I'll post this instead:

 

[petit_bateau]

As for stationary storage, each utility-level installation can be supported by itself, not too much direct investment required. Further, global utility storage demand is rising more quickly even that is solar and wind deployments. Why? Storage now can replace the vast majority fo speaker plants, making cheaper peak management and more efficient operation fo even inflexible ancient coal plants, that are still less dirty when operated in a steady state.

Storage - especially in China - will also allow better use of the limited grid transmission capability which is eyewateringly expensive to build with very long lead times. This in turn is one of the big enablers for bringing more renewables onto the grid. This aspect is complementary to the straightforward replacement of peaker plants, and to an extent there is a little overlaap.

 

[TN Mtn Man]

Not likely at all, once it is realized how any new orders for a CT won't be delivered for years.

There may be a wee bit of a CT backlog to address before Rivian's deliveries will be impacted.

Really? How many vehicles does Rivian deliver in a quarter? IMO Tesla's "low-volume" launch, hopefully later this year, will quickly out-produce Rivian. I expect no later than q1 '24 more CTs will be built than Rivians. Maybe wishful thinking on my part though, but Rivian has had great difficulty scaling in any meaningful way.

 

[zecar]

With Tesla opening up their supercharger network now, is it less likely or more likely for Tesla to eat in to Rivian's deliveries starting in Q3/Q4?

Tesla will take the Rivian prospects who find the 1/2 price model Y a much better deal. Tesla won't take most higher priced buyers because they don't have a traditional style SUV or a pickup.

The comparison of R1T/R1S sales to the Model X shows what most buyers want.