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

[mongo]

Why are energy margins so low? Don't they have a really long backlog? When the vehicle backlog got too long, Tesla increased prices and, thus, margins went way up. Yet, here we have low energy margins (11%) AND long backlog? What am I missing?

Older contracts didn't have adjustments for commodity pricing?

 

[capster]

I am not an expert trader or anything, but given Elon consistently saying he doesnt have a crystal ball and pointing to 2024 as the magic year. This leads me to believe we are going to test 150 again, and likely be held under 210 for the remainder of the year. Unless the Fed Pivots hard, I just dont see a catalyst the pushes this higher. WS already expects 1.8M, so unless that is a massively sandbagged number it all seems "priced" in for the upside. I am not selling any core shares but I made some money on covered calls yesterday and did it again till Jan 2024.

This is the story of Tesla, chop along for a few years, then go vertical once easy money/financial surprise hits. We won't ever see Tesla shorted as bad as we did in 2019/2020. But I think this is going to be a long drawn out stalemate. Just via twitter, I think the retail community is losing steam.

We all know this is not just a car company, but some days its hard not to look at the market cap of the company and ask if this drop isn't warranted given the changing narrative around margins. As always I keep holding and use excess cash to add when I can.

Precious few stock forecasts here or elsewhere have been anywhere near accurate.

Perhaps the margins will go back up sooner than later and that alone could be catalyst enough.

The next leg-up will come and the patient ones will smile.

 

[Mengy]

Because honestly I'm starting to wonder how we get anything near 900k more production in 2024 (needed for 50% unit growth over 1.8M this year) if they're only making 300k CT... Even Moar expansions at all the other plants I guess?

This is how I have production for 2024 modeled right now:

Fremont: 580,000
Shanghai: 1,100,000
Berlin: 400,000
Austin: 600,000 (400K MY's, 200K CT's)

Total = 2,680,000

This would be 49% more than 1,800,000 production in 2023, so nearly 50%. Of course if we make more in 2023 that percentage changes, but also then my production ramps for 2024 could be higher too so it might even out.

These numbers are all just guesses of course, I don't have a crystal ball, but it's what I'd like to see Tesla achieve for 2024 (or better).

 

[phoggy123]

The current stock performance is literally self inflicted just from Elon not giving specifics but saying the same thing that we have heard before.

If the team yesterday broke down pre-sale FSD revenue and then post sale FSD revenue, the current trajectory they see as wide release vs prior to wide release, their expectations of take rate from the fleet and revenue growth trajectory, the stock wouldn't be so beaten down. All everyone want is some information on FSD if you want the company to go all in on FSD. Wall street just want some clear numbers so they can put in a model.

AWS and Nvidia server growth was a small percentage of revenue when they started to break them down, but the market was forward looking. Nvidia was valued as an AI/server company when their gaming revenue was like 5x their server revenue.

FSD revenue maybe small today but you show wallstreet some YOY growth of 300% or something and the stock will reflect accordingly. Just that small snip of insurance revenue growth from last call got people excited. Next time on SAY, make sure to ask such a question and only direct the question to Zach who will actually break things down before Elon repeat his antic again.

I dont think you are wrong here, but there is no way Elon can address this and win. Zach gave guidance to 20%, they hit 18.2% and everyone is in a panic that the show is over. What they are doing in FSD isn't a linear thing like growing car volumes. I have no idea when FSD is going to happen (not this year) but I have no doubt Tesla will get there first and in the most complete format.

Literally like 60% of the US and most of Wall Street want to say "see I told you he's a fraud".

 

[Knightshade]

Your end of chart ends in q2 2022 before wide release...EAP came back end of Q2, like June 25th end of Q2.

You're off by over a year.

EAP came back in Europe (which is where you called it out) in Feb 2021.

That's WHY there was a big spike around that time in the EU take rate.... which I thought was your original claim so the fact you're now saying Q2 2022 is...odd?


Source for it actually being Feb 2021:

Tesla reintroduces Enhanced Autopilot with some FSD features in Europe and China

Tesla has reintroduced the Enhanced Autopilot packaged in Europe and China with some features that were in the more expensive...

electrek.co

And it was only $4500, not $6000.... so even lower revenue than I thought.

FSD and EAP are additive. You don't mix the numbers together. You can have a 14% FSD take rate and then PLUS whatever percentage of people who didn't buy FSD but bought EAP. You may have some FSD cannibalization but mostly you pulled more people into software sales.

But you can't use the FSD price if you just use the added take rate. Which is what you did, but not how the math actually works.

If 8% of the buyers bought EITHER of those, you don't get to run it as 8% paid $15,000. Because they clearly did not.

Many paid $4500 (or whatever EAP is in the EU now).

So I took a rough average of the 6k and 15k prices and ran that against 8%. Obvously the "real" math would be more like 4% paid Tesla 6k, and 4% paid them 15, and 4+4=8, but that doesn't change anything QoQ.

And wide release does not appear to have changed the take rate to the best of anyones data.

If you have more recent data showing otherwise, I'd love to see it.

 

[MC3OZ]

This is how I have production for 2024 modeled right now:

Fremont: 580,000
Shanghai: 1,100,000
Berlin: 400,000
Austin: 600,000 (400K MY's, 200K CT's)

Total = 2,680,000

This would be 49% more than 1,800,000 production in 2023, so nearly 50%. Of course if we make more in 2023 that percentage changes, but also then my production ramps for 2024 could be higher too so it might even out.

These numbers are all just guesses of course, I don't have a crystal ball, but it's what I'd like to see Tesla achieve for 2024 (or better).

Well if you did happen to have a crystal ball, Elon would like to borrow it

 

[Singuy]

You're off by over a year.

EAP came back in Europe (which is where you called it out) in Feb 2021.

That's WHY there was a big spike around that time in the EU take rate.... which I thought was your original claim so the fact you're now saying Q2 2022 is...odd?


Source for it actually being Feb 2021:

Tesla reintroduces Enhanced Autopilot with some FSD features in Europe and China

Tesla has reintroduced the Enhanced Autopilot packaged in Europe and China with some features that were in the more expensive...

electrek.co

And it was only $4500, not $6000.... so even lower revenue than I thought.



But you can't use the FSD price if you just use the added take rate. Which is what you did, but not how the math actually works.

If 8% of the buyers bought EITHER of those, you don't get to run it as 8% paid $15,000. Because they clearly did not.

Many paid $4500 (or whatever EAP is in the EU now).

and wide release does not appear to have changed the take rate to the best of anyones data.

If you have more recent data showing otherwise, I'd love to see it.

However your chart only say FSD take rate. So 8% of everyone on that chart bought FSD ONLY, not EAP or FSD.

 

[Singuy]

I dont think you are wrong here, but there is no way Elon can address this and win. Zach gave guidance to 20%, they hit 18.2% and everyone is in a panic that the show is over. What they are doing in FSD isn't a linear thing like growing car volumes. I have no idea when FSD is going to happen (not this year) but I have no doubt Tesla will get there first and in the most complete format.

Literally like 60% of the US and most of Wall Street want to say "see I told you he's a fraud".

It seems like actual Gm was 20%+ if you back out the one time charges Zach was saying. I don't know why analysts had to pull that out of Zach with a question vs having it on the presentation slide.

Also I am not talking about true FSD. I am only talking about tangible revenue that Tesla collects, which are 1x buys or subscriptions. These revenues are growing every Q and should be put front and center if they are going to put software sale front and center. If not, then don't be talking about it in an abstract form or a way to recognize revenue from FSD that doesn't exist and most likely won't for awhile.

 

[Knightshade]

However your chart only say FSD take rate.

Dude.... it's the chart YOU originally said was the one showing a bump from EAP coming back to Europe.

Remember when you said this...like 90 minutes ago?

ever since the introduction of EAP, the take rate outside of the US for that product increased. I think Troy had it at 7% in the EU or something?

so I went and found the chart for you.

And indeed, it shows that bump exactly when EAP came back to Europe.

And then steadily declining back lower than it was before that

Is there some OTHER chart you're thinking of but haven't posted-- or do you just not like that applying all the known #s don't produce a result you like?

 

[Singuy]

Dude.... it's the chart YOU originally said was the one showing a bump from EAP coming back to Europe.

Remember when you said this...like 90 minutes ago?



so I went and found the chart for you.

And indeed, it shows that bump exactly when EAP came back to Europe.

And then steadily declining back lower than it was before that

Is there some OTHER chart you're thinking of but haven't posted-- or do you just not like that applying all the known #s don't produce a result you like?

I thought you were showing me that chart to show FSD take rate declining. I thought I saw a tweet about EU EAP percentages and that's why I had a ?. But no that chart shouldn't show any EAP take rate as it's not labeled as such.

 

[betstarship]

I am not helpful anymore, so want to say adios and thank you for everything to this forum and TSLA!

If anyone wants to connect in regards to mental health, feel free to reach out.

 

[bkp_duke]

I am not helpful anymore, so want to say adios and thank you for everything to this forum and TSLA!

If anyone wants to connect in regards to mental health, feel free to reach out.

I for one find your posts very helpful. But I can understand if you need to step away. It's sometimes like a pack of hyenas here.

 

[cliff harris]

This is how I have production for 2024 modeled right now:

Fremont: 580,000
Shanghai: 1,100,000
Berlin: 400,000
Austin: 600,000 (400K MY's, 200K CT's)

Is that just assuming model Y only at Berlin? I know this was the initial plan, but I recall talk of model 3 in Berlin too at some stage (perhaps they are waiting until highland?). People get very focused on the model Y and forget the 3, but the slightly smaller 3 is, in many ways, a better fit for most European cities than the Y. My model Y feels big, even in a rural setting.
The shipping cost of a 3 from shanghai to Europe is non trivial, and it ties up inventory for some time. I imagine Tesla are super keen to get the 3 in production at Berlin.

Plus eventually the semi too. The European market for semi trucks is certainly large enough to justify production. I'd be surprised not to see the start of model 3 production at Berlin in 2024, and maybe even semi. CT is likely unsuitable for European tastes and roads.

 

[betstarship]

I for one find your posts very helpful. But I can understand if you need to step away. It's sometimes like a back of hyenas here.

I legit can't handle all the hyena-ing, tbh. It's been a rollercoaster. Thanks for the compliment!

 

[generalenthu]

I looked at twitter for a bit on the arguments between the usual Tesla folks - Gary, Whole Mars, Farzad, and a bunch of other usual suspects, and advertising seems to be the hot topic. While no one directly brought up advertising the conference call, there was a question around Elasticity of demand, which in layman's speak is whether Tesla was seeing an increase in order rate that corresponded with the drop in prices. Of course Elon shot this down with a terse Order rate is greater than production.

There are a lot of people who believe advertising is not needed and I am in this camp too. I also agree that Tesla is doing a lot of marketing, which is distinct from advertising as our resident marketing prof @unk45 has mentioned multiple times. I fully agree with this.

So my question to the professor, or anyone else who cares to chime in is - If you think that Tesla could do something, anything at all (and that includes advertising) to increase demand at the current price point, what could that be. Of course it is not possible to say that without Tesla's proprietary data, so if you want to know a few things about the internal metrics that Tesla tracks, what data points would you be most curious about?

 

[Thumper]

By the end of next year, we might have some production out of Monterey.

 

[Gigapress]

I don’t think it’s a major overstatement. I think you’re looking at it wrong along with several others.

Elon isn’t interested in building just a profitable business of a large size. Never has been, never will be. Elon knows the business has to make money to get to the goal, that’s why Tesla is profitable; means to an end.

I’m telling you, FSD is a requirement for Elon’s goal. He’s not pretending it’s important, it’s bloody well central.

Don’t believe me; you aren’t the first, you won’t be the last. Still calling for world domination and an incoming empire the likes only imagined in fiction.

I can’t answer your question without breaking forum rules. It has been a day, though.

FSD is a massive 5x accelerant for the mission of transitioning to sustainable energy if it reaches true level 5 autonomy, but no, it’s not strictly necessary. When a poker player goes all in, they either win big on that hand or they lose and have no chips left. FSD is not that kind of bet. It’s more like a call option within a larger investment portfolio.

Suppose Tesla AI runs into an impenetrable wall at which FSD performance completely stops improving despite all their best efforts. Eventually they quit development because nothing is working. In that calamitous scenario, does the whole plan come crashing down? Will it be impossible to produce, sell and service tens of millions of compelling, affordable EVs each year at a profit and build out the necessary charging infrastructure? Of course not. Investor Day and Master Plan Part 3 showed us that and nowhere was it indicated or implied that it all can work only if FSD gets to level 5.

Likewise, will it be impossible for Boring Co to implement limited Level 4 autonomy with EVs in closed, controlled, simple Loops that are 100% monitored 24/7/365 by safety teams and are not open to general vehicle traffic? Again, of course not.

And what about the other half of the plan? FSD has almost zero effect on the Energy enterprise. Megapacks, Powerwalls and Solar Roofs don’t even have cameras or AI inference computers. These products do use machine learning, but in a totally different way that’s not related to FSD.

Also, he does need Tesla to make trillions in the long run, because the TAM for SpaceX is relatively limited compared to Tesla and the Occupy Mars endeavor is probably going to require more capital investment than any other project in the history of human civilization.

 

[Singuy]

I looked at twitter for a bit on the arguments between the usual Tesla folks - Gary, Whole Mars, Farzad, and a bunch of other usual suspects, and advertising seems to be the hot topic. While no one directly brought up advertising the conference call, there was a question around Elasticity of demand, which in layman's speak is whether Tesla was seeing an increase in order rate that corresponded with the drop in prices. Of course Elon shot this down with a terse Order rate is greater than production.

There are a lot of people who believe advertising is not needed and I am in this camp too. I also agree that Tesla is doing a lot of marketing, which is distinct from advertising as our resident marketing prof @unk45 has mentioned multiple times. I fully agree with this.

So my question to the professor, or anyone else who cares to chime in is - If you think that Tesla could do something, anything at all (and that includes advertising) to increase demand at the current price point, what could that be. Of course it is not possible to say that without Tesla's proprietary data, so if you want to know a few things about the internal metrics that Tesla tracks, what data points would you be most curious about?

Elon should just have Tesla advertise on Twitter and measure the result in real time, then determine if it's a good idea. The only basic message Tesla needs to get out is the new price change and the federal tax credit.

 

[JRP3]

HW4 sharing development costs with millions of vehicles etc. No radar,

Eh?

 

[Gigapress]

It's not a matter of whether autonomous vehicles become more reliable than humans, it's a matter of when. And when that happens, people will resist trading in their personal cars for hailing rides, but the convenience and economics will make it much more attractive. No more car payments, no more car insurance, no more parking fees, no more service and maintenance.

I’d note too that FSD development and robotaxi rollout is primarily beginning in the US and Canada. I’ve heard many people assert that we North Americans love and identify with our cars too much to give them up quickly, if ever. However, I think we culturally tend to love something else even more: convenience and speed.

As you’ve pointed out, hailing a robotaxi will be easy and simple compared to the hassle of being responsible for a car, and it will save time and in urban settings be faster than dealing with parking. A substantial minority of the younger generations already have been going car-free since the rise of various car-sharing and ride-sharing apps. Until I bought a Model 3 last year I had been one of them and so were several of my friends. Cheap autonomous driving would take this dynamic to the next level, if if you throw high-speed Boring Loop racetracks into the picture then it’s a no-brainer.

Also, as I saw Tony Seba point out many years ago, trying it is a low-commitment decision. People who have cars can test it for the obvious best use cases and then get hooked after experiencing a taste of the sweet convenience. Partying, intoxicated and want to go out to town without driving? Call a robotaxi. Thunderstorm ended soccer practice early and your kid needs to come home? Call an robotaxi. You’re in Vegas and don’t want to deal with a rental car? Ride in the Loop. Plus, the first few rides could be free, like with offering a $100 account credit for new signups and a referral credit for existing users who recruit new ones.