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

[heltok]

I'm not sure why the margins are so low on Megapack. At $2M a pop, it's hard to believe they cost more than $1.5M to build. The equivalent of 30 Model S batteries can't be more than $1M. I must be missing something.

The main argument I have heard is "it sounds too good to be true, it has to be false"... Imo just looking at how much Tesla has raised the prices and then consider the cost advantage of LFP vs NMC it's either they were selling them at crazy loss before or profit has to be higher than 20%.

Anyway the nice thing for Tesla is that they have them in production and can observe costs and see where there is room to improve. And the physics first cost target has to be a lot lower than $1.5M. And one thing Tesla is good at is rapidly cutting costs and they know their long term ambition for the project. Imo people look to much at where Tesla is today, what matters is where they are going. Do they aim a bit beyond where they will end up? Sure but at least they take big strides in the right direction...

 

[FreqFlyer]

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.

Tesla acknowledges that. Why do you think the M3 is on its third set of new design wheels in 6 years? Tesla keeping it fresh. Why is the M3 and Y getting new facias and headlights? Keeping it fresh.

 

[M|S|M MYP]

The happier the wife?

The less likelihood your wife will leave

 

[Krugerrand]

Does it hurt being that constipated?

 

[GOVA]

God bless.
Son in law brought youngest granddaughter to Hawthorne SpaceX factory where she saw women assembling Merlin engines. She's now about to be a Tufts engineering college Freshman student. I know it bothers the woke Elon Twitter haters here but deal with it.View attachment 931208

This is what all of it is about. Bravo!!!

I've been dreaming to do it with my family but it's not been possible (yet?)


There are 2 kinds of folks, me thinks - those who get it and those who don't. Simple.

As Elon said - "there will be casualties" which is true. Not only on Mars but now. We have seen may - Cliffsky and many others from this forum, Tesla Economist, Stealth, Fact Checker, and a few others I've already forgotten.

It does not matter. I pay for the world I wanna see in the future. I am actually super duper broke but I'd still pay for Tesla, SpaceX and Elon.

Most of folks here are from the New World. The rest in from the old. Bruh.

Tesla forever or no future at all.

 

[Singuy]

The main argument I have heard is "it sounds too good to be true, it has to be false"... Imo just looking at how much Tesla has raised the prices and then consider the cost advantage of LFP vs NMC it's either they were selling them at crazy loss before or profit has to be higher than 20%.

Anyway the nice thing for Tesla is that they have them in production and can observe costs and see where there is room to improve. And the physics first cost target has to be a lot lower than $1.5M. And one thing Tesla is good at is rapidly cutting costs and they know their long term ambition for the project. Imo people look to much at where Tesla is today, what matters is where they are going. Do they aim a bit beyond where they will end up? Sure but at least they take big strides in the right direction...

Tesla on their earnings call alluded to their biggest margin gains come from after the factory has ramped to volume production as they start deleting processes that were used inefficiently just to increase volume and start looking at every aspect of the production to save pennies. This is how they cut a model 3 production cost by 30% post ramp.

When Elon and Zach mentioned aspirationally hitting 20% by year end, this is hitting 20% before margin optimization starts. Some people take this 20% as the max margin Tesla will hit with megapack which is not true at all. This is the margin they are trying to hit using economy of scale through high production only without margin optimization.

 

[Todd Burch]

I'm not sure why the margins are so low on Megapack. At $2M a pop, it's hard to believe they cost more than $1.5M to build. The equivalent of 30 Model S batteries can't be more than $1M. I must be missing something.

I suspect a few things:

1. Factory is still ramping. Just as with Austin and Berlin, low utilization reduces margins.
2. The lowered costs of lithium and other raw materials from the 2022 highs haven‘t flowed through to the bottom line just. That’s just starting now.
3. I’m sure there are still plenty of cost optimizations in both the product and the factory that are yet to be implemented.

I am expecting Tesla Energy volumes and margins to increase appreciably over the next several quarters.

 

[Ogre]

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.

I'm pretty sure it's safe to say that Elon has a moderately decent track record on "running a successful company".

I'm sure he appreciates the feedback from people who haven't created a single company as large as his first successful company though.

 

[AndrewZ]

I suspect a few things:

1. Factory is still ramping. Just as with Austin and Berlin, low utilization reduces margins.
2. The lowered costs of lithium and other raw materials from the 2022 highs haven‘t flowed through to the bottom line just. That’s just starting now.
3. I’m sure there are still plenty of cost optimizations in both the product and the factory that are yet to be implemented.

I am expecting Tesla Energy volumes and margins to increase appreciably over the next several quarters.

Not sure how many have read the Megapack T’s & C’s and what’s included when you purchase them (with or without installation), but there are clauses for price adjustments due to lithium carbonate price fluctuations.

These are big projects and the listed prices are, according to the reservation agreement, only an estimate to be finalized after working with Tesla to determine the full scope of work. After reserving, there is a 90+ day “diligence period” where much of this is supposed to happen.

 

[Big Time]

Those last two posts with the space x family vacations/trips/scholars made me warm and fuzzy inside. And after dinner, after I have washed the dish…. I sit back and dream of the possibilities of life on the big rotating mass we call planet erf.

Good luck tmrw all. ATH will come again someday.

 

[Buckminster]

https://twitter.com/x/status/1650438300555943938

 

[Buckminster]

10Q out:
https://www.sec.gov/Archives/edgar/data/1318605/000095017023013890/tsla-20230331.htm

https://twitter.com/x/status/1650441276100050946

 

[Tiger]

Attention, everyone. Today is a limited time offer to exchange Apple <-> Tesla stock in 1:1 ratio /s

 

[brantse]

Attention, everyone. Today is a limited time offer to exchange Apple <-> Tesla stock in 1:1 ratio /s

It's an interesting trading technique to do pairs trades with two similarly priced stocks like this. I was doing it for a few weeks, while ENPH and TSLA were similarly priced. I'd buy and sell blocks of shares at $5 increments of relative share price. There were days when I was able to "round trip" the trade twice, resulting in a net profit of $10 per share. Considering I was willing to hold either company long term, I never felt as though I was going to end up stuck in a position, but happy to benefit from short term perturbations in the share prices.

 

[zecar]

I see many expert opinions on Elon this weekend.

"these guys"? - do you refer to "these" as 'wink, wink' guys or which guys exactly?

So, historically, Maria Curie-Sklodowska, Einstein, Ulam, Fermi and others have suffered some sort of decline? Which decline is it? Can't be sexual as Elon is on like 10 kids and counting.

What does your research say? Please include all of the mentioned above as I'd love to update my notes.

You understand that Musk is neither a scientist or inventor? Strangely you left Nikola Tesla off your list of scientists.

 

[jeewee3000]

This weekend I went to my local barber, a self-identified "petrol head". Likes loud engines and motorcycles because they go vroom.

He doesn't know I drive a Tesla (I don't share too much when I can avoid it), and we got talking about the topic of the transition to BEV's.

His opinion was that the transition will "never happen". I asked why he thought so and the reply was "the purchase price of BEV's is not coming down like they intended to, and will never come down enough." (reason: can't scale batteries, rare materials etc etc)

I don't argue against a blank wall so I didn't explain Tesla's next generation platform to him. I will do so in a few years when they are actually driving around and are available for purchase.

Some people cannot extrapolate at all. They are truly fixed upon what exists now and how things happen now. These are the same people that thought personal computers would never find their way into everybody's homes, that mobile phones were forever a toy for the rich, and that smartphones were useless because of touchscreen and because everyone has internet on their PC at home.

Just wanted to share this observation since on TMC we generally overestimate the knowledge of the general public regarding BEV's/the transition/the collapse of ICE sales/ etcetera.

As long as BEV's don't make up for 50% of new car sales, a large group of people will not accept the fact that we will in fact transition to BEV's, never to return. With gasoline versus diesel versus liquid natural gas there has been a push/pull transition in the last few decades depending on what fuel is cheaper in certain countries/states and the resale value this brings to said vehicles. Only in the last five years has the value of diesel cars truly plummetted since now gasoline is seen as "better for the environment" than diesel.

Don't forget this when making investing decisions. To most people Tesla is merely a blip on the radar right now. A small company with novelty cars they don't want because "never heard of them".

This will change rapidly but we're not as close as many here think we are.

So even if we leave FSD out of the picture, the Tesla brand still has lots of room to grow. Again I'm imagining the next generation platform to be the biggest driver in getting Tesla from being seen as a "niche" car maker to an established car maker (in the eyes of the masses), like how right now Toyota or Volkswagen is perceived.

I stay very bullish.

P.S.: even though FSD timelines are polarizing, the above is applicable to FSD also. Most people cannot extrapolate: "FSD is terrible now, so will never work." Only when FSD is recognized/allowed by some state government will these people start considering full autonomy exists and can possibly play a role in their daily lives. Looking at the (r)evolution of the internet since the 1990's until now, a mere thirty years, I cannot with a straight face support the claims that FSD is something that will (only) happen in the far future (+10years away).

My personal FSD timeline is it will be achieved within three years from now. (December 2025) Seems a long time compared to Elons predictions but in the grand scheme of things that is nothing.
Who will achieve autonomy first? "Oh Tesla's going to win level 5." - George Hotz. Jim Keller seems to agree.

And I'm equally optimistic regarding Optimus. Possibly even more so. This company can change the world. (and already has, actually)

TL;DR: #bullish

 

[InDaClub]

Powerwall can stabilize the grid by feeding power into the system in areas with high demand, helping reduce fossil fuel-based power generation. As part of a pilot project with TransnetBW in Germany—the first in continental Europe—, Powerwall owners successfully contributed renewable energy to help support key sections of the grid. This project lays the foundation for a sustainable grid that's supported by clean community power.

https://twitter.com/x/status/1650478289029300224

 

[mongo]

10Q out:
https://www.sec.gov/Archives/edgar/data/1318605/000095017023013890/tsla-20230331.htm

https://twitter.com/x/status/1650441276100050946

Mongo notes:

IRA impact, reduced material costs:

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law and is effective for taxable years beginning after December 31, 2022. The IRA includes multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase, in addition to a new corporate alternative minimum tax of 15% on adjusted financial statement income of corporations with profits greater than $1 billion. Some of these measures are expected to materially affect our consolidated financial statements. For the three month period ended March 31, 2023, the impact was primarily a reduction of our material costs. We will continue to evaluate the effects of IRA as more guidance is issued and the relevant implications to our consolidated financial statements.

Gross margin automotive including leasing and regulatory credits was 21.1%

Inventory growth:

Segment growth and regionality:

Cost of automotive sales impacts:

Cost of automotive sales revenue increased $4.51 billion, or 41%, in the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, in line with the growth in deliveries year over year, as discussed above. Further, the average combined cost per unit of our vehicles increased year over year due to increasing prices of raw materials, manufacturing, logistics and warranty costs. These costs were partially offset by manufacturing credits earned as part of the IRA during the three months ended March 31, 2023. There were also idle capacity charges primarily related to the ramping up of production in Gigafactory Texas and our proprietary battery cells manufacturing during the three months ended March 31, 2023. We had also incurred costs related to the ramp up of production in Gigafactory Berlin-Brandenburg during the three months ended March 31, 2022. These increases in costs of revenue were positively impacted by the United States dollar strengthening against other foreign currencies in the three months ended March 31, 2023 as compared to the prior period.

CapEx estimated at around $2B a quarter on average through 2025:

we currently expect our capital expenditures to support our projects globally to be between $7.00 to $9.00 billion in 2023 and in each of the following two fiscal years.

Shift in investments to governmental from money market:

Investment timing:

 

[2daMoon]

You understand that Musk is neither a scientist or inventor? Strangely you left Nikola Tesla off your list of scientists.

Bear, Bot, or simply Ill-Informed?
(Considering his profitable software designs since childhood, the degrees Elon holds, and his dedication to the scientific method, the quoted statement appears to be motivated by something other than fact.)

If you think this account is a Bear or Bot spreading misinformation you can press the "Report" button for the original post by @zecar and let the Mods know.

The Ignore feature is another available choice.

 

[hobbes]

God bless.
Son in law brought youngest granddaughter to Hawthorne SpaceX factory where she saw women assembling Merlin engines. She's now about to be a Tufts engineering college Freshman student. I know it bothers the woke Elon Twitter haters here but deal with it.View attachment 931208

Totally consider myself woke/left/whatever - still love the story. Why do you have to polarize? People who critizize Elon for political statements on Twitter usually still appreciate all he is doing for Tesla and SpaceX (obviously, as there would be no SpaceX or Tesla without him).