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

[2daMoon]

SMR does a fine job of reviewing and highlighting parts of ARK Invest's latest data that offers a base case of $2K for the SP in 2027.

 

[Cult Member]

Yesterday I've visited the "Automeile" in our neighbor village. Basically a show of the local car dealers right in the old town and saw a "ORA FUNKY CAT" on prominent position. If you can't see the sticker clear enough it shows the price tag of 42,680.00 EURO. WLTP was 310 km as far as I remember.

Just for reference the data of another car that wasn't on display:

I will check the local news in the next days about the success of this event.

 

[Singuy]

Unfortunately, you are probably correct. Tesla is now at the point where they have to start selling to people who just want a car and are probably more interested in the monthly payment than anything else. That is a pretty sizable percentage of the population. Also, some of the competition out there really is competition. People on this thread have mentioned choosing another brand over Tesla when replacing a car. My personal doofus opinion is that Tesla hasn’t helped themselves by restricting the number of “free” colors and going to black trim only. All I see is white cars with a few black around here. I would be ordering a new S right now if I could get bright trim. Also, the picture of the X on the order page is god awful. No wonder it isn’t selling.

When I drive on the road, I don't see a Mach -E and think, man that one car out of a sea of ICE cars took away a Tesla customer...lol.

The competition is great but certainly not from the few EVs these legacy can't seem to produce. Tesla is dealing with a century worth of mind share and infrastructure. We can thank heavens gas prices are 4 dollars a gallon. If it was a dollar a gallon Tesla would be DOA until full autonomy for mass adoption. At least people feels pain everytime they fill up which really helps with the transition.

 

[unk45]

@Optimeer thanks for your detailed reply re: Megapack. Let me add what I can:


Yeah, that was Bradford Ferguson (Halter-Ferguson Financial). Great guy, very active Twitter feed. Recommend you read his "Telsa Valuation w. Megapack [PDF]" (link via his Twitter)!


Agreed, I estimate the March 2023 utilization rate of Megafactory phase 1 was ~74% (I think the limit will be CATL LFP battery supply reaching 40 GWh/yr when phase 2 is complete).


There was a detailed twitter thread explaining the delayed revenue recognition that Tesla will apply to Megapack sales: (it'll be like a growing tsunami of cash)

JPSartre on Twitter: (Jan 27, 2023)

• @Garyblack00 @TeslaBoomerMama good space. @Zerosumgame33 thx for sharing. Key takeaway to note: Lathrop ramp is not deployment. Deployment is not MP ramp contract execution=Ramp ?? Revenue Recognition explained
• Customer pays 40% @ Contract execution. Tesla expense 40% CATL & Production 40% = offset costs of production (lithium price pass thru) B/S neutral = $0 revenue / cost 1 - 20% shipped 2- 20% installed 3- 20% commissioned Each payment will be recognized as 100% margin/MP
• Happy to chat off line… but this is literally well camouflaged free cash flow transaction.
• Following payments can span multiple qtrs I.e. Execution of 3.9 GWH contract = 1000 MP = $2.4B rev Balance sheet inventory of $960M Payable of ($960M) @ 125/kwh Payment 1 = $480M shipped Payment 2 = $480M installed / Payment 3 = $480M commissioned / live
• Unless there’s an accounting change Tesla inventory/accounts payable will continue to balloon at the rate they execute contracts and receive deposits and which become offset by payments to CATL and battery production. Most are going to say this is autos…
• but Auto 50% yoy growth has been happening with 3~5B inventory and with delivery wave smoothing there should be less inventory. Thus $8B in inventory in LTM & linear accounts payments can only be a LARGE SCALE BUSINESS WITH SLOW delivery /revenue recognition schedule.
  
• Therefore inventory growth = contract execution and customer deposits. With 15 year contracts on service / termination fees / project planning approved at local jusristication and 40% payment the ENTIRE amount of contract should be valued at 100% on SIGNING, not deployment. / Twitter

Regarding your selling 15% of your holdings, I understand. To me, it seems like the $800M FX charge is an Accounting artifact which doesn't represent the true state of the business. That cash isn't being converted from RMB to USD at a loss. Instead, that cash is being used to pay local suppliers at world-best prices, and will also support further capital investment such as Giga Shanghai Megafactory.

Also, FSD revenue was deferred (not lost), so it'll just add to the next quarter (Tesla stated in the 2022 10-K they plan to recognise $630M in deferred revenue over the next 12 months, which includes FSD). Finally, Megapack revenue recognition will build like a tsunami of cash over time (steady, relentless, and surprising).

Finally, you sound like the PERFECT FIT for the new compact car from Tesla. Hopefully built in Berlin, too! But, aren't you able to order a 7-seater Model Y in Europe now?? Mine was built in Fremont in April 2024, for what is now equivalent to €2,650 extra. Great option!

Cheers!

For clarity: FX charges are only an ‘accounting artifact’ when they require restating an asset value. Otherwise, technically the majority of FX charges reflect changes in realized value vs book values. Thus, actual recorded US$ increased or decreased margins result from FX rate change. In plain English, if sales price is level in local currency, and book value of the car is in another currency, actual realized price with be higher or lower in US$. In sum, NOT simply accounting trick but changes in actual realized value in US$.
Several of us have posted on this subject, but still some otherwise very well informed people don’t realize how many different things are combined to produce the single number.

 

[30seconds]

Unfortunately, you are probably correct. Tesla is now at the point where they have to start selling to people who just want a car and are probably more interested in the monthly payment than anything else. That is a pretty sizable percentage of the population. Also, some of the competition out there really is competition. People on this thread have mentioned choosing another brand over Tesla when replacing a car. My personal doofus opinion is that Tesla hasn’t helped themselves by restricting the number of “free” colors and going to black trim only. All I see is white cars with a few black around here. I would be ordering a new S right now if I could get bright trim. Also, the picture of the X on the order page is god awful. No wonder it isn’t selling.

I think very few car shoppers are aware that you can get a model y for $499 / month

(Estimate based on BMW & Audi advertising)

 

[zecar]

SMR does a fine job of reviewing and highlighting parts of ARK Invest's latest data that offers a base case of $2K for the SP in 2027.

The SP500 has outperformed ARK since Cath started her Tesla prognostications

 

[lafrisbee]

When I drive on the road, I don't see a Mach -E and think, man that one car out of a sea of ICE cars took away a Tesla customer...lol.

The competition is great but certainly not from the few EVs these legacy can't seem to produce. Tesla is dealing with a century worth of mind share and infrastructure. We can thank heavens gas prices are 4 dollars a gallon. If it was a dollar a gallon Tesla would be DOA until full autonomy for mass adoption. At least people feels pain everytime they fill up which really helps with the transition.

They don't feel the real pain at the pump. Most of us polluters just accept it like we have all our lives.
But here is what bothers me because I know I can't (and you can't) figure it out. What are the real plans of all the ICE OEMs? Some are going one way, others another, then it seems like some are doing this, or waiting for that, or don't know or know more than....
Not every damn one of em can be a moron or incompetent.They could all steal enough of Teslas knowledge, and make a halfway decent car.

And ANOTHER THING. Many want Tesla to advertise, but what about Tesla actually doing things like changing the look of their cars more often? I can't tell you how much I dislike the look of the Y and the 3 from the very beginning. The fronts of those cars look both dysfunctional AND a mistake all in one. If Tesla had a reason like for the "Ugly" cyber(nota)truck I could easily be swayed into accepting it. But that huge set of duck lips is just stupid.
Now that being said, the OEMs are bright enough to understand people buy cars based a lot on how they look. And no Y or 3 owner is buying a Y or 3 because they like the look now. I believe most Y/3 owners bought the car based on what it is. 40 years ago I had a relationship with a girl. She was nothing to look at. But man I saw her as beautiful. She had frizzy kinky hair, had been severely bitten on the face by a doberman, and was born with a lazy eye. I was in my prime back then so it wasn't that I settled for her. She was damn fine in everything she did. and she did everything. I know where your mind went for a little bit but.. when we broke up she bartered with me to keep one of my fishing rods. (Yes yes, I was a damn fool, still am). Well 15 yrs later I got so mad at two of my close friends because they made fun of the beer tender at a baseball game that had a lazy eye. (I was already finding her attractive because she had a lazy eye. A typical pavlovian response that Would make this way too long) But My point is so many of you love your teslas for the same reasons I loved that girl... She would do everything and was always a pleasure.
A very high percentage of people buy a car based on how it looks. A completely new pool of buyers would show up if/when the Y and 3 changes its looks. And quite a few Y/3 owners would trade in their current Tesla if they perceived the next Y/3 as more attractive than what they have. And even more Y/3 owners would trade in their EV just to have the visible status of the NEWEST Y/3.
(Yes, I hear so many owners talking of how their cars are better than they were when they bought them, but as a divorcee will tell you, "Sh!t gets old." Everyone wants some strange.)
OEM's don't change the looks of cars because it improves them. No. They change the skin because they know that the buying public is full of people that have different tastes. And a significant portion of those people won't buy a car they aren't excited about how it looks. I'd have already bought a Y if it looked like something from the 1940's. Tesla should keep making Y/3's, but just change the looks. Yes it costs money. But if it didn't make more money then OEMs wouldn't do it.
The Y/3s looked silly when they came out. They look lazy and dumb now. It is just how we (90%) are.
The Highlander should have been out yesterday. They got rid of the duck lips, now lets see what the rest of it looks like.

 

[zecar]

They don't feel the real pain at the pump. Most of us polluters just accept it like we have all our lives.
But here is what bothers me because I know I can't (and you can't) figure it out. What are the real plans of all the ICE OEMs? Some are going one way, others another, then it seems like some are doing this, or waiting for that, or don't know or know more than....
Not every damn one of em can be a moron or incompetent.They could all steal enough of Teslas knowledge, and make a halfway decent car.

And ANOTHER THING. Many want Tesla to advertise, but what about Tesla actually doing things like changing the look of their cars more often? I can't tell you how much I dislike the look of the Y and the 3 from the very beginning. The fronts of those cars look both dysfunctional AND a mistake all in one. If Tesla had a reason like for the "Ugly" cyber(nota)truck I could easily be swayed into accepting it. But that huge set of duck lips is just stupid.
Now that being said, the OEMs are bright enough to understand people buy cars based a lot on how they look. And no Y or 3 owner is buying a Y or 3 because they like the look now. I believe most Y/3 owners bought the car based on what it is. 40 years ago I had a relationship with a girl. She was nothing to look at. But man I saw her as beautiful. She had frizzy kinky hair, had been severely bitten on the face by a doberman, and was born with a lazy eye. I was in my prime back then so it wasn't that I settled for her. She was damn fine in everything she did. and she did everything. I know where your mind went for a little bit but.. when we broke up she bartered with me to keep one of my fishing rods. (Yes yes, I was a damn fool, still am). Well 15 yrs later I got so mad at two of my close friends because they made fun of the beer tender at a baseball game that had a lazy eye. (I was already finding her attractive because she had a lazy eye. A typical pavlovian response that Would make this way too long) But My point is so many of you love your teslas for the same reasons I loved that girl... She would do everything and was always a pleasure.
A very high percentage of people buy a car based on how it looks. A completely new pool of buyers would show up if/when the Y and 3 changes its looks. And quite a few Y/3 owners would trade in their current Tesla if they perceived the next Y/3 as more attractive than what they have. And even more Y/3 owners would trade in their EV just to have the visible status of the NEWEST Y/3.
(Yes, I hear so many owners talking of how their cars are better than they were when they bought them, but as a divorcee will tell you, "Sh!t gets old." Everyone wants some strange.)
OEM's don't change the looks of cars because it improves them. No. They change the skin because they know that the buying public is full of people that have different tastes. And a significant portion of those people won't buy a car they aren't excited about how it looks. I'd have already bought a Y if it looked like something from the 1940's. Tesla should keep making Y/3's, but just change the looks. Yes it costs money. But if it didn't make more money then OEMs wouldn't do it.
The Y/3s looked silly when they came out. They look lazy and dumb now. It is just how we (90%) are.
The Highlander should have been out yesterday. They got rid of the duck lips, now lets see what the rest of it looks like.

The problem with your opinion of the 3/Y design being ugly and a mistake is that the market has clearly shown you to be spectacularly wrong.

I do agree that Tesla has become boring unless CT punches one's ticket.

 

[generalenthu]

Mercedes-Benz Group AG: Strong preliminary results for the first quarter 2023 exceed capital market expectations

Mercedes-Benz Group achieved strong financial results in the first quarter 2023 with especially the Industrial Free Cash Flow exceeding capital market

www.businesswire.com

Who are all these people increasingly buying these Mercedes cars for a premium. May be some of the German members can throw some light?

 

[insaneoctane]

OMG. That's one of my showstoppers.

If they add in easy optional dumb cruise mode I'd be beginning discussions with my wife about at least test driving a Y or 3.
They can even call the mode it Dumb Cruise for Dumb People if they want.

I think what you want is better called dangerous cruise mode....or maybe dangerous legacy cruise mode

 

[Thumper]

I really don't get the whining about gas prices in the US. When I first started driving, gas was about $.30/gallon and the minimum wage was $1.00/hour. Gas is about the same today. I guess Americans are just spoiled from years of petroleum subsidies.

 

[Artful Dodger]

Cybertruck Amphibious Technologies | Engineering Analysis of Elon Musk's Alien-Technology Dream-Truck | Connecting The Dots (1 hr ago)

 

[FastEddieB]

I think very few car shoppers are aware that you can get a model y for $499 / month

On the news last night was a segment about car owners getting in over their heads on car payments and facing repossession. Significant was that the average new car payment is around $700/month, and 1 in 6 exceeds $1,000/month, which really surprised me.

 

[M|S|M MYP]

On the news last night was a segment about car owners getting in over their heads on car payments and facing repossession. Significant was that the average new car payment was around $700/month, and 1 in 6 exceeded $1,000/month, which really surprised me.

Avg individual mindset:

1. Take home monthly pay - $4k
2. Car payment - $700
3. Gas/month for vehicle - $200 - $300
4. Rent - $2k
5. Entertainment - $300
6. Food - $300
7. Misc - $300
8. Utilities - $150

Net worth monthly (est): -$50

These amts are even being on the conservative side and hopefully they are contributing to a 401k. This is why banks/credit card companies make billions. But, hey, at least he/she is able to meet with friends and have fun at least

 

[insaneoctane]

On the news last night was a segment about car owners getting in over their heads on car payments and facing repossession. Significant was that the average new car payment is around $700/month, and 1 in 6 exceeds $1,000/month, which really surprised me.

Surprised average loan was that low. Just using average new car price of $48K, average new car loan rate of 6% and average new car down payment of 10%....

Monthly Pay: $935.71​

Total Loan Amount	$48,400.00​
Sale Tax	$2,400.00​
Upfront Payment	$4,800.00​
Total of 60 Loan Payments	$56,142.46​
Total Loan Interest	$7,742.46​
Total Cost (price, interest, tax, fees)	$60,942.46​

I guessed 5% sales tax (closer to 10% in California!), and rolled fees into loan for this calculation...

 

[JRP3]

I think what you want is better called dangerous cruise mode....or maybe dangerous legacy cruise mode

As long as it doesn't randomly hit the brakes for no reason I don't care what they call it, I'd actually use it then.

 

[Singuy]

Mercedes-Benz Group AG: Strong preliminary results for the first quarter 2023 exceed capital market expectations

Mercedes-Benz Group achieved strong financial results in the first quarter 2023 with especially the Industrial Free Cash Flow exceeding capital market

www.businesswire.com

Who are all these people increasingly buying these Mercedes cars for a premium. May be some of the German members can throw some light?

If you read the wsj, they spell it out in their article to why.

"The reality is that investors see the fat margins Mercedes-Benz has made in recent quarters as a transitory phenomenon caused by the pandemic vehicle shortage."

Mercedes and the others had a hard time pumping out cars due to chip shortages. They are seeing a temporary surge in sales and margins because that problem has been alleviated.

 

[hobbes]

Strange that Tesla raised the price on the X considering the inventory levels that are showing, but I'll take anything that goes against the "we'll sell cars without profit" narrative.

Portfolio - Matt Jung Photography

Now shipping with HW4? Or has it already and I missed it?

 

[phoggy123]

Cybertruck Amphibious Technologies | Engineering Analysis of Elon Musk's Alien-Technology Dream-Truck | Connecting The Dots (1 hr ago)

I have taken the Tesla Economist approach to this Chanel after all of the Project Highland lead up to investor day. It's all speculation unless you think there are decent insights.

 

[NicoV]

Mercedes-Benz Group AG: Strong preliminary results for the first quarter 2023 exceed capital market expectations

Mercedes-Benz Group achieved strong financial results in the first quarter 2023 with especially the Industrial Free Cash Flow exceeding capital market

www.businesswire.com

Who are all these people increasingly buying these Mercedes cars for a premium. May be some of the German members can throw some light?

Probably just the effect of the the supply chain normalizing, so that a lot of the backorders can be fulfilled. Let’s see how it looks like in 2 or 3 years.