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

[Max Plaid]

I'm just one of those idiots who understands that some kids getting excited at a SpaceX rocket launch has nothing to do with the real damage Elon has also done to the Tesla brand. Those kids aren't buying Tesla's and, news flash, younger people tend to be more "awake" than older, so in 15 years or so of sh;t posting by Elon when they might want to buy a vehicle that launch might be long forgotten. Or not, who knows, maybe by then Elon will have turned things around, but a rocket launch doesn't doesn't erase his other actions.

Serous question, but if you feel so strongly about it, why stay invested? If it was me I'd sell out and put my money somewhere else

 

[spacerfc]

If he is such a brilliant guy he would not have bought twitter at ridiculously high value of $44b when now its worth half that according to Elon, even after all his cost cutting/layoffs….. Think about that, he makes hugh mistakes all the time and tsla fanboys give him a pass. If he would have waited another 3-6 minths to buy twittwr he probably would have saved about $22b….

Right, if he can predict the stock market crash, he can short all the stocks and become a trillionaire overnight, why didn't he do that... /s

Seriously, he makes mistakes all the time, that's not news. Back in production hell days, he specifically said he values decision speed over decision correctness, that's what get Tesla from production hell to today.

 

[Krugerrand]

Essentially put it this way. My parents only got their smartphone a few years ago. Like 17 years after the IPhone came out. It takes a long time for the masses to inform themselves on new technology. It seems to me that Tesla’s growth is simply outpacing the natural word of mouth/education growth for EV’s and for Tesla’s especially

I only got a smartphone a few years ago. Not because I didn’t know what they were or how to use them or anything education related. I just didn’t want one. I didn’t want to have to carry one around, always be trying to remember where I put it, always be ‘available’, and I didn’t like that people had lost the common courtesy of putting the stupid thing down when talking to others or having a dinner or crossing the street or, or, or. I can literally keep adding to that list of why I didn’t want one.

The reason for not wanting to buy an EV is just as long and isn’t necessarily education related today.

I actually believe the masses get on board new technology pretty quickly and even quicker nowadays than before the telephone and the radio and the TV and the Internet. Word travels fast today.

Practically new tech is expensive and when you’ve got a perfectly good working Walkman, only those with extra cash and perhaps a pioneering spirit are the first in line for an iPod Nano.

When we consider the additional expense of a car, it’s no wonder the masses take their time buying a new one of significant new tech. Additionally, when that new tech is killing old established industries of massive size owned by rich, powerful people, there’s going to be campaigns of lies to deter people from adopting the new. Who are people to believe? The company selling you a shiny, new tech at a higher price, or the established company with a product that has for the most part seemed to serve you well for the last 100yrs?

It takes time to get billions of people on board; many who are too poor to afford an EV, many who are content to not drive, many who are exceedingly cautious and wary of new technology, many who earnestly believe everything they are told by the media, many who base purchasing decisions on non-relevant factors, many who simply don’t care to be up on the latest, etc., etc.,

Finally, the reason so many topics are divisive is because people are absurdly opinionated - about EVERYTHING. Try not having an opinion now and again. It’s hard at first, but in the end it’s actually liberating.

 

[Krugerrand]

Tesla and Elon seem unnecessarily stubborn about this. The way to run a successful company is rarely to come up with the most brilliant plan and then execute on that, but rather you use thousands of small trial and error processes and continue doing what works and drop what doesn't. In this case, try advertising in a small market, see if it works and is worth the investment, and then decide.

So, Tesla isn’t a successful company!? Tesla has never considered trial and error!?

Um…ok.

 

[JRP3]

The fact that the Cybertruck will likely be great shows both the quality of Tesla engineering and the stupidity of Musk not choosing a more universally appealing vehicle that could be the basis for a variety of large and medium sized trucks and real SUVs

Tesla has succeeded in spite of Musk's aesthetic design choices. Not because of them. What Musk brought was extreme discipline on manufacturing and cost control. What seems most likely at this point is that Tesla will learn that there is not infinite demand for three old designs of bean shaped vehicles.

How can you be so unaware of aerodynamics and it's impact on the range of EV's? A conventional truck shape would get significantly less range than the Cybertruck, and beans are slippery.

 

[JRP3]

Serous question, but if you feel so strongly about it, why stay invested? If it was me I'd sell out and put my money somewhere else

I still see the value in the company which is not currently reflected in the stock price, simple as that. I do have price points where I'll be selling more shares but we aren't near them.

 

[Chunky Jr.]

One problem with leaving the product lineup relatively unchanged over the years is that there is no compelling reason for existing owners to upgrade to a new car. Today‘s Model Y is basically the same as my 2020 one. Refreshed style and/or more range every few years might get more people to upgrade or attract new buyers.

 

[lafrisbee]

Cybertruck will be cool, Plaid Model S is cool, the Roadster will be cool.
Model X is still a bit cool.
Model 3 and Model Y are high volume mass market cars, hard for these to be cool.
Hard for a Semi or a van to be cool.
Harder for an entry level compact car to be cool.
Personally speaking I have never purchased a car becuase it was cool.
Fun to drive was high up the list.

Fun to drive ticks a cool box.

 

[unk45]

This is a great point - I see SpaceX Starlink advertising a lot, both online and in person (billboards, mailbox drops). What is the reasoning by Elon that paid advertising is fine for one of his companies, but not another? Would be interesting to hear the specific reasoning.

This is really obvious from a Marketing point of view.
Tesla has quickly established 'unaided recall' globally, highest 'brand value' among industrial companies, rapidly growing market share in most markets and nearly ubiquitous media coverage, plus... so advertising in any form is simply a waste of money. Remember, for those who do not know, advertising is, by definition, minimally targetable except in specialized cases such as billboards.
Starlink is largely unknown outside technically oriented audiences. Further one class of Starlink placements is on commercial airlines which benefit from wide awareness. Cellular backhaul and such things as the T-Mobile remote area coverage also benefit from very broad awareness, just as the practice in many countries of promoting Starlink for direct access in remote areas. Because Starlink is a mass access substitution product today it needs widespread recognition.

In marketing it is crucial that each choice is carefully considered and evaluated dispassionately. Every Musk company does that. In each case they understand who the buyers are, who the influencers are and conduct their marketing to reach their crucial audience.

The mantra of the 21st century is Targeting, as it was in the 20th century for those who practiced what was then known as Direct Marketing, first by post, then telephone until 'autodialer' technology matured and destroyed all vestige of utility (except for Medicare supplements, credit card scams and Nigerian investment opportunities, of course). Since Google, then Baidu, perfected internet search and dwell time data, the world of targeting has never been the same. Now people who act as though they're interested in something suddenly find out all about it. Because of this approach, which I describe in absurd simplicity, any business which has a narrowly circumscribed market, as new cars, boats, houses etc, can be quite explicitly reached, usually without even noticing. Tesla's quite masterful at this, so much that most of us seem not even to think it happens at all. So, advertising for Tesla is definitively a waste of money.

Please remember that advertising only is sensible when the Total Addressable Market is essentially everyone within reach of the advertising. Think toothpaste, prepared foods, etc.
For auto manufacturers it si a waste of money, but nearly all of them have done it for their entire existence and now they have a huge interest group of marketing staff, ad agencies, dealers so they just don't know how to stop.

Just look at financial statements to see how wasteful that process is. The typical OEN spends between five and ten percent of sales on advertising (corporate, brand, model, region, dealer, print, TV, Cable and on and on). You'll rarely see all that in single number because it is in many different accounting categories, right down to dealer level.

The people who say Tesla should advertise seem never to actually understand how that industry works. The people who do understand how targeting works, how social media works, how to generate 'word of mouth' understand how it is that actual prospects to buy a Tesla product invariably know enough to do it, and if they don't there's usually a teenager or younger child to explain it for them. [Irrelevant Note: at a recent family gathering in Rio de Janeiro I overheard one a discussing his plan to buy a new car. His seven year old daughter said, "Dad, you must buy a Tesla, they have all the best games". I was not a participant and never, ever, had discussed tesla or any car with the main question. Tesla si not yet sold in Brazil] The very fact that Tesla is an aspiration for younger people almost everywhere implies that Tesla is reaching people very well. It's only the older ones who think otherwise.

I understand that this subject has become an article of faith rather than fact. As such I also understand rational information will not alter preconceived ideas.

There is a topic in marketing called "mother-in-law research", rather unkindly. That happens when somebody says, e.g. my next door neighbor does not know about Tesla, You 'gotta' advertise'. A rational solution might be to show the next-door-neighbor your Tesla. That solution most of us have been praising for quite some time. Tesla, so idiotically not advertising/s , offers referral codes which astounding though it is, work! and cost very little.
Oddly enough the fewer Tesla populate an area the better that works. That is only the most obvious example of how adept Tesla can be. Then there's the old 'free Supercharging' ploy, which never fails especially now that everyone must pay.

But, that's irrelevant, "you must advertise!"/s
For those who are irritated by incessant repetition, I promise I'll quit, just as soon as people begin to study the subject before presenting they know of what they speak./s

 

[CitizenKane]

So, Tesla isn’t a successful company!? Tesla has never considered trial and error!?

Um…ok.

Did I write that? I just think they could try advertising in a small market and see how that goes. I hear a lot of misconceptions about electric cars in general and Tesla in particular. And a lot of people don't want to buy Tesla because they don't like Musk. I have no strong opinion on whether it would work or not but why not try?

 

[bkp_duke]

One problem with leaving the product lineup relatively unchanged over the years is that there is no compelling reason for existing owners to upgrade to a new car. Today‘s Model Y is basically the same as my 2020 one. Refreshed style and/or more range every few years might get more people to upgrade or attract new buyers.

Respectfully, disagree. I've had a 2013 Model S P85 . . . and it's like a Model S Plaid in name only.

I have currently a 2018 Model 3, and it doesn't have a heatpump, HW3, double pane windows, etc. I'm actively looking to replace it with a Highland Model 3 (PLEASE Elon, give us a Model 3 Plaid - PLEASE PLEASE PLEASE).

 

[bigsmooth125]

Teslas are incredible vehicles and easily the best cars on the planet. On top of that, the vehicles are pretty close to price parity with their ICE counterparts. Further still, the model Y and model 3 are also pretty close to the average sale vehicle sale price among all vehicles in the United States. They are an incredible value for the money and affordable for the masses. Even in the current interest rate environment (competition has same interest rates), the Teslas should be selling.

We also have a substantial tax credit in the United States.

Teslas do not have an affordability problem at current prices.

It’s a desirability problem.

Which is ridiculous since they are the best vehicles available.

It’s obvious that there has been some degradation of the brand. There are plenty of buyers who are aware of Teslas that won’t buy them. Almost everyone knows who Elon is at this point and his public persona is intertwined with Tesla’s image. His controversial behavior and provocations have turned off people. The company is feeling the impact of it now. The magnitude of the impact is debatable but it’s definitely non zero. Even little brand damage at the margins are important now.

Any advertising really shouldn’t be about “education”. It has to focus on image. Teslas used to be super cool. They are not as much currently (notwithstanding the kids that @Gigapress has interviewed). This change happened pretty quickly and it’s obvious why. We need to bring that back the cool factor. Cybertruck will help but that won’t be a factor in the short term.

Elon has to have a lower profile and reel it in. I can’t get into his brain, but I doubt he gets it. His behavior continues unabated and the framework for his thinking seems to be that price cuts are the way to address demand issues. His bumbling management of Twitter does not inspire confidence either.

It’s a shame it’s come to this.

Had the exact same thoughts last week when I picked up my new Model Y. What a value, I thought to myself. Too bad I don't view the brand image, which is inextricably linked to Elon, the same way I used to. I used to have plans to buy both a Cybertruck and Roadster when they come out, not because I need them in any way, but just because they're cool and I want to give an FU to the mainstream brands. Not any more though. Buying a Tesla is strictly a financial/practical decision. But for the recent price drops I would have bought a different EV.

 

[Chunky Jr.]

Respectfully, disagree. I've had a 2013 Model S P85 . . . and it's like a Model S Plaid in name only.

I have currently a 2018 Model 3, and it doesn't have a heatpump, HW3, double pane windows, etc. I'm actively looking to replace it with a Highland Model 3 (PLEASE Elon, give us a Model 3 Plaid - PLEASE PLEASE PLEASE).

your comment about your 3 seems to agree with my point though

 

[Etna]

It’s $700m of funding towards construction of the facility and then up to $13b over a decade in subsidies for production of the batteries themselves, very similar to what the Inflation Reduction Act would have provided in the US through the types of manufacturing credits people are hoping Tesla receives.

And it sounds like those subsidies then need to be paid back over five years.

It appears to be a battery subsidy like the IRA, Volkswagen does not have to pay that back.

"Per battery investment with PowerCo SE ranges between $8 billion and $13.2 billion, depending on production levels. This is a part of an overall electric vehicle battery investment partnership by Canada and Ontario. Projections show that the full economic impact of the project will be equal to the value of government investment in less than five years."

Official source: Volkswagen’s new electric vehicle battery plant will create thousands of new jobs

It's a 90 GWh/year capacity with 3000 jobs, and Volkswagen is investing $7 billion in that facility or about twice the amount Tesla is investing in Nevada on the 4680 line for a similar capacity (100GWh versus 90GWh for Volkswagen) and workforce (3000 jobs) but also including the Semi production facility.

 

[bkp_duke]

your comment about your 3 seems to agree with my point though

No, it refutes it. It's the "same car" in name only. It's missing a ton of features that the 2023s have. If we didn't have Highland spy photos out, I would already have replaced it. I know saying the following I'm in the minority, but I REALLY like FSD for any driving over 15 minutes long. I don't want to upgrade my current car and miss out of the other features I can get in a 2023 (quieter ride too).

 

[bkp_duke]

It appears to be a battery subsidy like the IRA, Volkswagen does not have to pay that back.

"Per battery investment with PowerCo SE ranges between $8 billion and $13.2 billion, depending on production levels. This is a part of an overall electric vehicle battery investment partnership by Canada and Ontario. Projections show that the full economic impact of the project will be equal to the value of government investment in less than five years."

Official source: Volkswagen’s new electric vehicle battery plant will create thousands of new jobs

It's a 90 GWh/year capacity with 3000 jobs, and Volkswagen is investing $7 billion in that facility or about twice the amount Tesla is investing in Nevada on the 4680 line for a similar capacity (100GWh versus 90GWh for Volkswagen) and workforce (3000 jobs) but also including the Semi production facility.

Ironic that VW needs to invest twice as much to reach only 90% the battery production that Tesla is going to get from half the investment.

 

[brantse]

Did I write that? I just think they could try advertising in a small market and see how that goes. I hear a lot of misconceptions about electric cars in general and Tesla in particular. And a lot of people don't want to buy Tesla because they don't like Musk. I have no strong opinion on whether it would work or not but why not try?

I agree and believe some form of informational advertisement would do Tesla well. I talk to many coworkers and reasonably informed adults who have very wrong misconceptions about EV's. Just about every one that mentions the idea of maybe buying an EV some day instantly begins mentioning every other manufacturer. People want to find any reason to avoid even considering purchasing a Tesla. It's very strange, but true for some percentage of the population.

 

[Unpilot]

Think about that, he makes hugh mistakes all the time and tsla fanboys give him a pass.

Mistakes do happen....

 

[snellenr]

Teslas make great cop cars , especially with normal routine policing. But you will be disappointed if you think a Y would do well against a top Dodge hemi in a police chase. The plaid S would do well, but a Y LR would lag , and easily be outrun If road was open. Does not matter much while fleets are mixed, it is hard to outrun radio. The money savings with a 75% electric fleet would be amazing.

You're using the wrong model.

Cop: "We're in hot pursuit & need some help!"
Dispatch: "Roger - we're dispatching a 10 RoboSquad swarm to intercept!"
Cop: "The target car is a top Dodge hemi!!!!"
Dispatch: "Roger that - we'll dispatch 15!"

 

[Chunky Jr.]

No, it refutes it. It's the "same car" in name only. It's missing a ton of features that the 2023s have. If we didn't have Highland spy photos out, I would already have replaced it. I know saying the following I'm in the minority, but I REALLY like FSD for any driving over 15 minutes long. I don't want to upgrade my current car and miss out of the other features I can get in a 2023 (quieter ride too).

by "upgrade", I mean trading in and getting a newer model, not software upgrades to an existing model. It sounds like you would like to trade in (or sell) and get a new model. Maybe I'm misunderstanding.