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

[Tim S]

Thanks for looking for that. Here's the transcript of the 2023 Q2 Conference Call, and the word "niche" does not appear:

Tesla, Inc. (TSLA) Q2 2023 Earnings Call Transcript

Tesla, Inc. (NASDAQ:NASDAQ:TSLA) Q2 2023 Results Conference Call July 19, 2023 5:30 PM ETCompany ParticipantsMartin Viecha - VP, IRElon Musk - CEOZachary...

seekingalpha.com

Perhaps you are thinking of something else? Here's what Elon said about Cybertruck on the Q2 Conf. Call:



Martin Viecha:

Elon Musk:



Lot's of talk about demand, and the schedule, and ramping, but nothing I see from Elon about Cybertruck being "niche".

Cheers!

@Featsbeyond50 is probably thinking of this quote from the annual shareholders meeting in May, not the Q2 earnings call...

"There will be a S-curve production. So it will be slow at first, and then ramping up. I guess we will see what the demand is but we are likely to make 250,000 a year – maybe more. It depends what the demand is like."

(From Fred at Electrek)
Elon Musk puts Tesla Cybertruck production estimate much lower than anticipated

He later added that he believes it would be between 250,000 and 500,000 units a year. The CEO also said, “It will be hard to make the Cybertruck affordable.

I don't think Elon used the word "niche". That came from analysts.

 

[GSP]

…….

I do not understand if there is any added value in putting LFP in a 4680 can vs putting it in a prismatic format.

And isn't prismatic LFP sufficiently structural as to be effectively interchangeable with a 4680 pack in mechanical terms (though really that question is only really an issue for the automotive applications).

If 4680 has no particular advantage for LFP, then why would Tesla split its 4680 effort across two chemistries ? It seems to me that Tesla's 4680 effort is going to be fully occupied in trying to ramp 4680 as the high-end automotive solution. Leaving LFP as the low-end auto solution and the stationary solution (until such time as sodium/etc arrive one day maybe).

……

I have been wondering about this question for some time. I don’t have an answer yet, but I do recall:

1) On battery day Tesla said they planed to make LFP 4680 cells
2) When questioned about LFP 4680 on a subsequent earnings call, about a year ago, Elon (or maybe Drew) said something to the effect of: “The physics” of LFP cells are not well suited to cylindrical formats.”

I still have not figured out what “physics” are behind this statement. The only hypothesis I have is that prismatic cells are needed to get the needed kWh to fit in the available space. Prismatic cells are more volumetrically efficient, and LFP is even worse for volumetric energy density than it is for specific energy (Wh/kg).

Also, LFP may not have as many trade-offs with large cell formats. It is less volatile, and maybe it also has less issues with manufacturing yield. If the latter is true, and I have no idea if it is or not, then larger cells can be made without increasing scrap costs.

GSP

PS. My theory on scrap costs is that one contaminate in the anode or cathode mixtures, such as a single human hair, will result in one cell being scrapped during formation and testing. The smaller the cell, the less material to be scrapped and recycled.

 

[thx1139]

SUV issues ahead ........ be real nice to see the Model 2/Z announced

France has had the guts to crack down on SUV drivers. Why doesn't Britain? | Laura Laker

These vehicles are lethal to pedestrians, disastrous for the environment and have no place on city streets, says urban transport writer Laura Laker

www.theguardian.com

Goes right along with this.

 

[Artful Dodger]

My theory on scrap costs is that one contaminate in the anode or cathode mixtures, such as a single human hair, will result in one cell being scrapped during formation and testing.

... so what are you saying? It'd be better if non-humans made battery cells? /s

Cheers to the 'bots!

 

[Singuy]

Tsla is just a stock that baits retail investors now. Turns red during trading hours after a green pre-market and it turns green after a red pre-market.

 

[GSP]

Aye, this is a Highland(er)...View attachment 959894

Damn, I have been watching too much Outlander...

A hansome lad, for sure. However here is the real “Highland.” It was home to the most disruptive innovation in automobile manufacturing to date: the moving assembly line. Elon and Tesla (and Space X) take their inspiration from past innovators, and I can hardly wait for the next revolution to come with Gen 3 (or maybe a bit early with Highland?)

 

[AudubonB]

These are the times market actions that try men’s souls...if, like all good men, they are investors rather than market timers*.

The regularity and predictability of TSLA’s morning zigs and zags - as long as one is not trying to move multi-hundred thousand share blocks - it generates that Anti-Simpson: Just shut up and give me my money.

* Market timers, we all know, have no souls.

 

[EfficientWatts]

There is probably some truth to Green’s allegations although I doubt a company like Tesla would so blatantly ignore IP laws.

If Green had simply posted his findings and left the readers to ponder and make a judgement about it, that would have been just great. Instead he dramatizes with words like, ‘IP theft’, ‘stealing’ etc.. and goes on the offensive, and he has done that in the past too.

I remember he did something similar about HD mapping on Teslas FSD. It all turned to have a grain of truth and storm in a tea cup.

Pot, meet the kettle (Elon)...

In principle, I can agree with you on some of the things that he has said (especially around HD mapping). But you pointed conveniently ignore all of the other things he has reported on and said that do carry weight and truth.

If you're willing to put up with Elon's antics and sort through his dramatization and exaggerations and crazy claims, then I would say you can do the same for green. Unless green becomes someone along the lines of Gordon Johnson, instances of emotional outbursts shouldn't automatically disqualify green as someone we should ignore.

 

[SO16]

If you're willing to put up with Elon's antics and sort through his dramatization and exaggerations and crazy claims, then I would say you can do the same for green.

One person is making changes.

One person is reporting changes.

Not quite the same.

 

[Singuy]

One person is making changes.

One person is reporting changes.

Not quite the same.

You sure it's not quite the same? Thunderf00t and fans thinks they are changing the world by pooping on everything Elon tho.

 

[dhanson865]

Good video about the glass in a Tesla. Please note that someone who knows what they are talking about calls it "laminated" NOT double paned. Neither the word "double" nor the word "pane" were used at any point in the video.

https://twitter.com/x/status/1684541570178068481

 

[ZsoZso]

This is kind of a farewell post from me. I have been a TSLA investor, avid reader and occasional poster on this board for 9 years.
It has been a very interesting experience, I have learned a lot from you guys -- huge thank you for that!
I have now changed my investment strategy, because I need some regular income from my portfolio and HODLing TSLA does not provide that -- tried to play some options in the past 1.5 years but did not do well, made mistakes and got burned several times. So now I have shifted to dividend paying investments (including some TSLY, which is based on TSLA, so I still have some indirect involvement). It does not mean that I do not believe that TSLA is a great long term investment, just that it and its roller coaster volatility does not fit my current needs.

All the best for the longs / HODLers. I will continue to lurk and read from time to time here, but will not be posting.

 

[Singuy]

This is kind of a farewell post from me. I have been a TSLA investor, avid reader and occasional poster on this board for 9 years.
It has been a very interesting experience, I have learned a lot from you guys -- huge thank you for that!
I have now changed my investment strategy, because I need some regular income from my portfolio and HODLing TSLA does not provide that -- tried to play some options in the past 1.5 years but did not do well, made mistakes and got burned several times. So now I have shifted to dividend paying investments (including some TSLY, which is based on TSLA, so I still have some indirect involvement). It does not mean that I do not believe that TSLA is a great long term investment, just that it and its roller coaster volatility does not fit my current needs.

All the best for the longs / HODLers. I will continue to lurk and read from time to time here, but will not be posting.

Are you going to sell some 2 year out leaps or just going to sell shares on the market?

 

[StarFoxisDown!]

Yup. People need to stop thinking just because TSLA was over $400 a 18 months ago means it "deserves" to get back there when market gets back to all time highs.

Tesla at that time had extremely high margins, now they are just "good" to "very good". Wall Street is going to value TSLA on forward earnings looking 1 year out, maybe 2. Right now the 2024 estimated EPS is like $4.5, so the forward PE ratio is like 58. That's... healthy. That's not a low forward PE ratio. NVDA's forward PE ratio might even be lower than TSLA's.

Tesla's gross margins are too low and going in the wrong direction for Wall Street to assign high probabilty that they will go up from here. That means they won't revise EPS estimates upwards until they seeing strong signs. So 2 big triggers for Wall Street will be:

1) Auto gross margins & revenues increasing

2) Energy gross margins & revenues increasing.

We should see #2 happen hopefully in Q3 report. I don't expect Wall Street to have any foresight before that for Energy. For Auto, they may be able to see the rise in ASP before it hits earnings (such as following @Troy or looking at used car price trends), but those aren't looking up yet. With interest rates seemingly staying high for at least another 6 months, it's hard to see ASPs going back up. We can only hope gross margins increase from further COGs reductions.

When Tesla prints a quarter with a $1.5 EPS, wall street might forecast the following 4 quarters to make $7. With a forward PE of lets say 60, Tesla could finally reach the golden $420 share price. But I don't see a path to reaching $1.5 EPS until at best Q4 earnings in January, but more likely around Q2 2024 earnings next July.

Until then, we are probably stuck around $300.

Eh that's not really what I was saying.

I was simply stating the dynamic of how TSLA gets treated from Wall St. Which is unfairly.

All across the landscape of the stock market, including very much in the large market cap companies, you have stock after stock after stock where there is a complete disconnect between that company's actual earnings/YoY growth and it's PE. You might want to go and look at the true valuation metric, PEG of the other mid and mega cap names and then compare it to TSLA. Most are in the range of 2.5-3 PEG. Apple, Microsoft, Amazon (PEG of 11!), I could go and and on. TSLA PEG sits at 1.3....Ford has a higher PEG ratio. So you're argument that TSLA is fairly valued in the market today is just bogus.

The reality is that TSLA always gets treated unfairly and because it's the most heavily traded options play in the market, there's much higher incentive to manipulate the trading action. In no other company's earnings, would the margin improvement on a rapidly growing business by completely ignored (Energy) or the reduction in COGS that offset a ton of the ASP decline. All the bears that were shouting 14-15% gross margins have gone completely silent. And every company's "AI future revenue/earnings" is just as fictitious as Tesla's "FSD future earnings/revenue". The only company that actually has shown directly correlation to from AI to their earnings is Nvidia. Everyone is just talk...and will be talk for the next couple of years.

So in short, if TSLA was being valued the same way all of Wall St is valuing other mid to mega cap stocks, it should be in the 350/share area today.

 

[SO16]

Tesla Owners Have Soured on Elon Musk, But Still Love Their Model 3s

After five years on the road, we asked 5,000 customers what they thought of their cars and the Tesla brand.

www.bloomberg.com

Tesla’s Model 3 Still Holds Up After Five Years on the Road: Tesla Survey

After five years on the road, we asked 5,000 customers what they thought of their cars and the Tesla brand.

www.bloomberg.com

Tesla Autopilot Test Drivers Rate Full Self-Driving Feature: Tesla Survey

After five years on the road, we asked 5,000 customers what they thought of their cars and the Tesla brand.

www.bloomberg.com

 

[StarFoxisDown!]

This is kind of a farewell post from me. I have been a TSLA investor, avid reader and occasional poster on this board for 9 years.
It has been a very interesting experience, I have learned a lot from you guys -- huge thank you for that!
I have now changed my investment strategy, because I need some regular income from my portfolio and HODLing TSLA does not provide that -- tried to play some options in the past 1.5 years but did not do well, made mistakes and got burned several times. So now I have shifted to dividend paying investments (including some TSLY, which is based on TSLA, so I still have some indirect involvement). It does not mean that I do not believe that TSLA is a great long term investment, just that it and its roller coaster volatility does not fit my current needs.

All the best for the longs / HODLers. I will continue to lurk and read from time to time here, but will not be posting.

If you're looking for income, why not sell covered calls at a strike price that you'd be happy selling at with a 1 or 2 year expiration? You can collect some income and if the stock does nothing for a year or two, you then can sell covered calls on the shares again a year from now (with a higher strike price).

This is actually my divesting strategy that I will start to implement when the stock gets back up into the 350/range. I'll take 5% of my position and sell covered calls on it at a strike price of something like 425-450/share with a 2 year expiration. As the stock goes higher, I'll keep doing this in 5% increments at higher strike prices until I'm about 75% divested with the remaining 25% left to ride into the sunset. It'll likely take me 5-6 years to fully divest and if there's any long periods of consolidation in the stock, I'll be able to keep some shares and collect additional income.

 

[madodel]

So META beat on estimates. Are we seeing the SP plummet 10%? Just wondering if that's a trend or just applies to TSLA.

 

[M|S|M MYP]

This is kind of a farewell post from me. I have been a TSLA investor, avid reader and occasional poster on this board for 9 years.
It has been a very interesting experience, I have learned a lot from you guys -- huge thank you for that!
I have now changed my investment strategy, because I need some regular income from my portfolio and HODLing TSLA does not provide that -- tried to play some options in the past 1.5 years but did not do well, made mistakes and got burned several times. So now I have shifted to dividend paying investments (including some TSLY, which is based on TSLA, so I still have some indirect involvement). It does not mean that I do not believe that TSLA is a great long term investment, just that it and its roller coaster volatility does not fit my current needs.

All the best for the longs / HODLers. I will continue to lurk and read from time to time here, but will not be posting.

I do not blame you, as the years go by, i also sometimes think of the 'risk off' scenario. I still have a few years to go before seriously considering this but i admit that the roller coaster volatility does not help when you get closer to the 'retirement' years.

 

[phantasms]

So META beat on estimates. Are we seeing the SP plummet 10%? Just wondering if that's a trend or just applies to TSLA.

Zuck didn’t say “we will be reprogramming the feed this quarter so FB will be down for many days.”

 

[Mengy]

Zuck didn’t say “we will be reprogramming the feed this quarter so FB will be down for many days.”

That's it in a nutshell. TSLA didn't tank in aftermarket until they gave the guidance for Q3 possibly being less production than Q2. The market did not like hearing that.