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

[WolfHero]

For those holding out for a discount (like me), Walter Isaacson's Elon biography is now available with significant savings at Costco. Found this at it's BC Canada location for CAD $26.89

 

[Buckminster]

https://twitter.com/x/status/1708286235188359426

Nice timing!
Discussion here:
MY 2024 Refresh - Project Juniper?

 

[CorneliusXX]

"...so the operator, even if it's first day of job [sic], they cannot mix it up."
Everyone who saw Optimus' latest performance, draw your own conclusions.

It doesn't feel like there is much distance between the simplest processes in clipping the vehicle together and moving around the blocks.

I wonder how far away we are from a trial production line for Optimus - the product doesn't look finished with various wires and connectors still all over the place and general movement still seems a little hesitant, but it appears very close to doing the thing that saves money. Perhaps they can squeeze a small trial line in the corner of Fremont or Austin.

 

[CorneliusXX]

And this revenue stream could become quite massive. I've been thinking about this a lot lately. With NACS as the standard, Tesla has a significant brand advantage when it comes to selling its L2 charging network. Tesla's L2 network should quickly dwarf companies like ChargePoint.

Just think of all the apartment complexes that are ready to install chargers. The complex gets paid. Tesla gets paid. Residents save money over buying gasoline. Everybody wins except the oil companies.

Analysts have talked about how putting everyone onto the Supercharger network won't bring in a lot of revenue for Tesla. But Supercharging is not where the money is. The big money for Tesla will be in apartments, condos, and businesses offering L2 charging. This is where millions of EVs will charge every day. And Tesla will get a nice cut.

Let's throw out some napkin math.

From what I gather, about 25% of US drivers don't live in a place where they could install a private charger. So they would rely on an L2 network like Tesla's. Let's say we are at a point where 25% of the US fleet is electrified. The fleet is currently about 290 million cars. So that's about 18 million who need to charge on L2. And let's say it averages about $5 per day of revenue per car and Tesla has a 50% share of the L2 charging market. Tesla's revenue is split 50/50 with the owner of the property. (Note that I'm assuming the $5 is after paying the utility for the electricity)

So we have:

18,000,000 x 50% x $5 = $22.5 million per day split evenly with the property owners.

We are talking about roughly $8 billion in revenue per year going to Tesla. And it's mostly profit.

I'd be very surprised if Tesla gets to double digit % market share for L2 chargers. The L2 charger is basically a commoditised product at this stage because it is trivial for any company that already manufacturers electrical products to move into this adjacent product and they all know how many are needed in the long run. There's also no limit to scaling like we have with batteries in vehicles. Tesla's offering isn't the cheapest. When building management is deciding to purchase hundreds of L2 chargers there are cheaper offerings.

 

[Thekiwi]

https://twitter.com/x/status/1707860636783231363

What do we score the Highland transition at? 9/10? Has there been any recognition in the media given the sheer number of logistical changes?

Well they haven’t been able to deliver any of the highlands yet right? So maybe not that great a transition. I gather its due to china not issuing the certificate yet allowing sale, but still not great regardless.

Not sure refreshing a car is that groundbreaking an achievement worthy of media recognition, most car companies do major refreshes of their models periodically without fanfare. Tesla is in the grown up car company club now and doing a model transition successfully in a quarter should be business as normal.

=================

Slightly related note, I was somewhat surprised how much extra was included in the highland refresh, with some features not at all necessary and increasing parts/cost (the extra screen for rear passengers, the led lighting, the ventilated seats). Now this came alongside a lot of other improvements that reduced manufacturing costs, but still found it interesting they added more premium features, instead of ruthlessly cutting costs above all else.

One thought recently occurred to me why this might have been the case. I’m probably wrong, but given the cheaper “model 2/$25k/unboxed car” will arrive before the model 3 receives another major refresh, then maybe these premium features added to highland are product features to position the 3 with enough premium features to keep the 3 as a compelling buyer choice against the forthcoming cheaper model that presumably will lack the more premium features of the 3 & Y. (Also helps against the flood of cheaper chinese produced EVs that are slowly gaining comparable range/performance to the 3).

 

[DragonWatch]

Forward Observing

The Master Class of Modular construction puts traditional auto assembly to absolute shame. Legacy automakers assemble engines as modular pieces ~ why not amplify that? No wonder lower paid workers think managers are dumber than the rocks I have carved.

Elon ~ has your modular team considered Optimus as the driver? Windshield wipers exist on car windows, exterior mirrors are protected from weather and can be defogged, inside mirror can be adjusted to optimize rear viewing. Outside cameras can be optimized to add perspective as they do now. With Autopilot engaged, rain falling hard now that fall is arriving ~ autopilot gives off warnings that it may not be 100% operational. Surely there are more pro’s than con’s.

Just like me, I can quickly jump into a car/vehicle and with relative confidence, drive off with little guidance.

Bottom line. How many models of cars are on the road today or being added tomorrow, like the CyborTruck? Does that require absolute camera placement on every vehicle? Or, programming to adjust to every model?

Optimus, what do you say, are you up to the challenge?

We as humans have/had to get over range anxiety. We have to learn and adjust, and most humans clearly have trouble with that issue.

Or, is Optimus the key to RoboTaxies, and being added?

Cheers

 

[SageBrush]

And this is the real long term advantage of everyone going with NACS. It gives a natural advantage to Tesla for its L2 network.

Tesla can play in two commoditized markets: EVSE and electricity. The NACS adapter may be on most of the EVSE but that does not imply a Tesla product, and it certainly does not imply a $5 a day revenue on top of electricity.

Actually, I'll guess that multi-dwelling charging will mostly follow the path of wi-fi at coffee shops. It will become an expected service, not an expensive boutique offering. The Apt owners will be happy to recoup their installation costs, and Tesla will be elated that a huge market opens for their cars. As for Tesla profit from the service, I'll guess that you over-estimated revenue by 10x, and over-estimated the Tesla share of the EVSE market 2x. That turns your $4B annual Tesla profit into $200M, worth a couple dollars to the share price.

 

[Max Plaid]

I feel like Tesla is due for another step change in valuation. It's been dead money for two years, and I've seen this pattern before.

Ah, remember the good old days, June to September 2019? TSLA lower than it had been for years, around $10 pre-pre-split? Buying mispriced Jan 2021 +c650 call options for $1 and selling them in February 2021 for $220

 

[winfield100]

From what I gather, about 25% of US drivers don't live in a place where they could install a private charger. So they would rely on an L2 network like Tesla's. Let's say we are at a point where 25% of the US fleet is electrified. The fleet is currently about 290 million cars. So that's about 18 million who need to charge on L2. And let's say it averages about $5 per day of revenue per car and Tesla has a 50% share of the L2 charging market. Tesla's revenue is split 50/50 with the owner of the property. (Note that I'm assuming the $5 is after paying the utility for the electricity)

So we have:

18,000,000 x 50% x $5 = $22.5 million per day split evenly with the property owners.

We are talking about roughly $8 billion in revenue per year going to Tesla. And it's mostly profit.

I think your $5.00/day is a bit over optomistic (~$150/month or even $100/month (20 work days))

a few years back (around 2010 or so) folks were talking about charging $ for charging at work and rough/vague consensus was around $20/month was a fair price for paid charging at work so $1.00 roughly a day for commuters based on avg of 40 mile commute 5 days a week, 12,000 miles a year.

my PV electricity is valued ~2.6 cents a kilowatt hr by my electric company (they buy it at that and sell back at 8.6cents)
even at 10 cents a kilowatt hr, you are talking 50 kilowatt hours/day or ~150 - 200 miles per day, every day, 4,500 - 6,000 miles a month

the idea is electricity is extremely cheaper than fossil fuel, (utilities literally cannot manufacture and deliver electricity at 2.6 cents a kwh around SW Florida it seems)

 

[jerry33]

I'd be very surprised if Tesla gets to double digit % market share for L2 chargers. The L2 charger is basically a commoditised product at this stage because it is trivial for any company that already manufacturers electrical products to move into this adjacent product and they all know how many are needed in the long run. There's also no limit to scaling like we have with batteries in vehicles. Tesla's offering isn't the cheapest. When building management is deciding to purchase hundreds of L2 chargers there are cheaper offerings.

I suspect Tesla's advantage will be the "known good brand" advantage. "No one ever got fired for buying IBM."

 

[SageBrush]

a few years back (around 2010 or so) folks were talking about charging $ for charging at work and rough/vague consensus was around $20/month was a fair price for paid charging at work so $1.00 roughly a day for commuters based on avg of 40 mile commute 5 days a week, 12,000 miles a year.

Yep, but this charge included the electricity.

$20 a month = $240 a year for 12k miles
24000/10000 = 2.4¢ a kWh

 

[Mengy]

How much Media are you consuming? You might benefit from cutting back on the steady diet of spam, fud, and b.s.

I do consume as much Tesla media as I can fit in a day, but honestly my own spreadsheet numbers alarm me. Lower margins + lower production creates a challenge for Q3 EPS to come in above Q2. I'm hoping they recognize some substantial FSD revenue or very large Megapack sales to offset it.

I do concede while I am bullish long term, I'm not as bullish in the short term as most people on this forum.

 

[SageBrush]

I do concede while I am bullish long term, I'm not as bullish in the short term as most people on this forum.

That is my opinion too, although I may be influenced by a personal profit motive. I sold at $280, and am debating when to jump back in. I was tempted by $220 not too long ago but ended up passing. I'll probably set up a purchase ladder to de-risk the possibility of the share price continuing to drop after I start buying.

 

[scaesare]

It's napkin math. And it's a few years in the future. Gas is probably more expensive. You can also play with the electrification rate. I suggested using a point in time where the fleet is at 25% EVs. It will eventually go much higher than that.

So you can play with the numbers. My main point is that Tesla's L2 charging network is potentially worth billions per year in profit. And this is the real long term advantage of everyone going with NACS. It gives a natural advantage to Tesla for its L2 network.

Except, as we talked about yesterday, the announcement specifically discusses Tesla handling payment, but makes an explicit point about the Property Manager setting the price, and no monthly fees. I can't imagine Tesla is going to take a cut of the charging price without bothering to mention that...

 

[JoRoMo]

…
I do concede while I am bullish long term, I'm not as bullish in the short term as most people on this forum.

I am also bullish long term.

Short term? More «indifferent», Q3 below Q2 is perfectly acceptable to me as long as I still trust the Tesla Team - which I do.

 

[mongo]

Except, as we talked about yesterday, the announcement specifically discusses Tesla handling payment, but makes an explicit point about the Property Manager setting the price, and no monthly fees. I can't imagine Tesla is going to take a cut of the charging price without bothering to mention that...

View attachment 978682

No monthly fees (fee regardless of usage) doesn't mean no per-session fees.
For example, unless Tesla passes on the credit card processing fee, Tesla is subsidizing every use.
Price selected - credit card fee - Tesla fee = gross to property owner. So property owner can adjust the user rate to match their desired gross receipts.

IOW, Tesla must charge to handle charging for charging otherwise the charge for using a charge to charge will be large.

 

[jamaatta]

On September, first time ever, Tesla is the most registrated brand of month in Finland.

 

[zoomer0056]

IOW, Tesla must charge to handle charging for charging otherwise the charge for using a charge to charge will be large.

I asked ChatGPT to rewrite:
Tesla needs to charge fees for managing the charging process; otherwise, the cost of using their charging service would be high.

 

[unk45]

I'd be very surprised if Tesla gets to double digit % market share for L2 chargers. The L2 charger is basically a commoditised product at this stage because it is trivial for any company that already manufacturers electrical products to move into this adjacent product and they all know how many are needed in the long run. There's also no limit to scaling like we have with batteries in vehicles. Tesla's offering isn't the cheapest. When building management is deciding to purchase hundreds of L2 chargers there are cheaper offerings.

That also applies to the many OEM’s that still supply L2 chargers with EV sales, but surely those are diminishing as adoption rates rise. Otherwise there are almost countless L2 suppliers around the world, including many that supply multi-unit installations for shopping centers, commercial buildings and multi-family housing. I think even a 5% share is unlikely because of that context.

Fast charging clearly is a very different matter precisely because the infrastructure is more complex, maintenance is greater and energy infrastructure is more expensive to operate. That combination is the only structural advantage to the Supercharger network. Specifically for North America the unreliability and fragility of CCS1 provides powerful incentive for OEM change to NACS. Because the EU is CCS2, as is Supercharging, the EU advantage is primarily a single EU-UK standard network vs the many dozens of national/regional ones.

Under current conditions Tesla L2 charger solutions are very much the premium priced solution, which thrives in part by having the capacity to directly recognize individual VINs. Others with very slightly less functionality are sometimes less than half the price. L2 also easily acts as ‘just another plug’ with only reduction in amperage due to being a continuous load.

Those and other factors ensure that Tesla will not derive significant financial benefit from L2. FWIW, the many third party multi-unit solutions from ChargePoint, EverCharge, and dozens of others are far cheaper than those postulated by @Usain above.

 

[cab]

I know the focus this weekend is on PD numbers and most of us are a bit disappointed at the length of time GigaTexas was shut down. Indeed, even though folks are back at work there, it appears they are building mostly "test" cars. All of that has me intrigued though. I mean, "what exactly are they doing with the Model Y there?". I think the initial assumption is the Y line was getting some efficiency improvements, but the changes seem to be more material given:

a.) the need for crash testing
b.) the number of cars in the "test" lot
c.) what appear to be cars in different colors (or man, that paint booth needs calibration!)

Crash testing implies more than just a "we sped up how we do X" - it would seem to imply a change (or changes) to the car itself. It may not be huge, but something.

I almost wonder if they are taking this opportunity to move "part of the way" toward Juniper - not out of character for Tesla to make incremental changes, but this one must be decently sized. This could help spur sales or perhaps just shave costs out of the car (i.e. a reduction of parts could require crash testing).

On the downside, it isn't clear to me that "come Monday" (aka start of Q4) they will be back at full production. They could still be testing, etc. and thus we start Q4 a little more behind the 8-ball in terms of PD than I had hoped.

Unfortunately, we may not know any specifics until earnings even if the start delivering cars sooner.

Never a dull moment on the Tesla train!

The news of the minor updates to the Shanghai built Model Y this morning would seem to further feed my supposition above. Of course a new "LED strip" isn't likely to require crash testing, so I suspect even larger changes coming from the GigaTexas shutdown (it is TEXAS after all). It does open the door to yet another question: "What about Fremont and Berlin built Model Ys?". If we think about what differentiates GigaTexas from the other plants it would seem to come down to either 4680s and/or structural packs and giga castings of some sort. Then again, what the heck do I know!?