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

[Krugerrand]

Elon all for technology creating AI based workers, but cant stand technology making it so we dont need to commute as much.

There was significant context to his comment that you’ve conveniently chosen to ignore.

For instance there are jobs in this world that can not ever be done from home. Ever. Like building cars.

Do us all a favor and put your fear, hatred and anger aside so you can actually hear what’s being said.

 

[uscbucsfan]

Can what is going on with Tesla possibly be summed up as follows?

1. Elon's more recent foray into politics has had an asymmetrically negative impact on demand, turning off a significant portion of the subset of buyers that are more open to buying an EV as their next car, meaning that more of Tesla's volume must come from non-early adopter types.
2. These non-early adopter, mass-market consumers are more resistant to buying an EV for various reasons, to the point of price inelasticity. (See the recent surveys that have been published on this topic.)
3. Elon and Tesla are conflating the cause for this demand weakness with high interest rates. They attempt to address it by dropping prices, but the buyers they are trying to lure are more put off by their misperceptions with EVs than they are by price, making the price cuts relatively ineffective.
4. At the same time, Tesla is not undertaking the type of educational campaign that could actually make inroads with these mass market consumers.

No

 

[Oveeus]

IMO, I've always liked the way Tesla ER was delivered.

No BS, no wishful thinking and always as little surprise as possible.

Economy downturn is not a matter of "if", but rather "when". In the history of economics, we have never ever achieved soft landing. It puzzles me that we keep using these phrases. There has been a close one in 94-95 period, but even then, it wasn't without some severe disruption in the US economy.
TSLA has been navigating through the space extremely well and it shows you the flexibility that the company has as a whole.

We are probably the only carmaker in the world that has dynamic pricing power with yet the ability to turn a profit. Given the current situation, when other carmakers are fighting strikes, decreasing market share, transition to EV... etc.

The way Tesla is pricing its vehicle is just exactly as it says it's doing... based on the real time supply and demand. If supply is too much and demand is not enough, adjust the pricing. In today's comments about Giga Monterey, when it comes only, it'd increase supply. Thus, unless there's a proven demand given the price range (people who are in the market for 25k cars and actually able to pay for one), suddenly adding so much supply, it's not an ideal situation.

And if you look at the comments by Elon, he's not stopping Giga Monterey, but rather, not pushing with whatever it takes and just do it with the most economically feasible way.

Yes, this might not be a good ER for Wall St. Because Wall St. likes to sugarcoat things. This is what they feel they can create value out of nothing. However, TSLA does not sugarcoat things. We set expectations and work toward it. We might not get very well with actual dates... like FSD or CT. But what's important is...

We actually get there!

 

[Tony73]

Almost 0 chance in that.

What is your logic in this? The market giving benefit of the doubt with Tesla?...That would be a first.

The market is giving Tesla the benefit of the doubt on margins right now. Where do you think TSLA would be if the market thought 7% operating margin was here to stay.

 

[Cosmacelf]

Wow. Pretty dramatic take. From a distance, you seem more rational than that.

Look, the same info (more or less) could have been imparted without actual sound bites like "We dug our own grave with Cybertruck". Is he that dumb (I know he isn't, but stay with me here), to not realize that the OBVIOUS retort/question is "Why the hell didn't you create a normal pickup truck then?". Does he think Tesla's brand is that weak that only something that looks different than a Chevy could sell? Doesn't he realize that NO ONE ELSE is selling EV trucks at any volume because they all suck in some way? Ford Lighting isn't even a bad truck, well except for the range, but they can't make it in volume since they don't have the battery supply.

I am really starting to think Elon's strategic thinking is messed up here. He was anti-selling the $25K car because it was a "boring ordinary car". Who the **** cares Elon? Give me a $25K Tesla and I'll sell a million of them, boring styling and cheap interior or not.

I'm realizing that the Model X wasn't a one of mistake. That vehicle, which could have been THE soccer mom car, was cost crippled because of those flashy but ultimately pointless falcon wing doors. Rivian is selling as many R1S SUVs as they can make, even with their inflated prices (imagine how much cheaper Tesla could make the R1S), because it is JUST A CAR, with a form factor that people like. Does it have cold gas thrusters? Does it have flappy wing doors? Does it have sub 2 second acceleration? No, and it doesn't have to to sell tons.

Elon was dragged kicking and screaming to make a $25K car with a steering wheel. Speaking of wheels, how was his intuition on wheel vs yoke? I even like my yoke, but it turns out it was a market dud. Thanks Elon for crippling Model S/X sales for a while until you figured that one out.

Yeah the Cybertruck might turn out to be great. But it has cost Tesla at least a year delay in getting a truck to market. And apparently margins on it are going to suck if you believe (checks notes), some guy named Elon.

Most of the rest of the call was taken up with Elon giving reasons why no one can afford his cars. Yes, it was more nuanced than that. Think the press will explain the nuance?

Look, I continue to think Tesla has a bright future, but gawd that call didn't paint that picture.

 

[thx1139]

Can what is going on with Tesla possibly be summed up as follows?

1. Elon's more recent foray into politics has had an asymmetrically negative impact on demand, turning off a significant portion of the subset of buyers that are more open to buying an EV as their next car, meaning that more of Tesla's volume must come from non-early adopter types.
2. These non-early adopter, mass-market consumers are more resistant to buying an EV for various reasons, to the point of price inelasticity. (See the recent surveys that have been published on this topic.)
3. Elon and Tesla are conflating the cause for this demand weakness with high interest rates. They attempt to address it by dropping prices, but the buyers they are trying to lure are more put off by their misperceptions with EVs than they are by price, making the price cuts relatively ineffective.
4. At the same time, Tesla is not undertaking the type of educational campaign that could actually make inroads with these mass market consumers.

I have been saying this for awhile, but you just did it so much better. Thank you.

 

[uscbucsfan]

The market is giving Tesla the benefit of the doubt on margins right now. Where do you think TSLA would be if the market thought 7% operating margin was here to stay.

If that's what you call the benefit of the doubt, ok.

So in that case, instead of the drop we've seen today and post-market, it would be 3-4x worse for a 0 or negative margin CT? Maybe not, but also history shows that wouldn't be good for the stock.

 

[tslagreen]

Add this to the very long list of things I have always been and continue to be absolutely right about.

Must be nice to be right about so much. I wish I was so prescient. Got any NFL picks this week?

 

[WMTribe90]

I believe individuals who are upset with Elon Musk for expressing the truth or his genuine perspective may have invested excessively in TSLA.

Nope, strictly buy, accumulate and hold since 2013. You can be both truthful and positive in the delivery of information. Elon is mission critical, but he should not be on these calls. His choice of course, but the best interest of shareholders would dictate he focuses on the mission and the engineering and not communications.

 

[Cosmacelf]

Who’s going to tell Elon that interest rates are currently historically low?

They are more or less at the level we had in the 1990s and that was a great decade. I suspect we are going to have this level or just slightly lower for the rest of the 2020s. And the economy will be fine with that. So stop whining Elon.

 

[loquitur]

This is the worst conference call I've ever listened to. Elon is on drugs. 50% CAGR gone. CT negative earnings for 1.5 years. No idea how many CT shipped next year. CT is super hard to make (so why make it, why not ordinary truck????).

(1) Drugs and Elon happens. (2) The sooner that expectations can be "managed" about 50% CACR the better. Why not have a Tesla official say the actual truth that it's rare that making physical goods over more than several years can occur at that rate? For software yes, but not for metal-bending. So "guide" to 30%, not 50%. (3) If CTs are hard and expensive to make, why not charge early adopters accordingly? Out of more than a couple million pre-orders, won't 1 out of 10 pay a boosted initial price? Tesla did it this way for Roadsters and Model S/X; they only came down the cost J-curve with Model 3/Y. (4) As for ordinary trucks, someone at Tesla is on record somewhere that they'd make a more ordinary truck if the CT (at least the exterior styling) fails.

 

[Zaddy Daddy]

Surprise, surprise you are negative on the stock. Daddy needs to find a new hobby.

Just trying to keep it real. Does anyone have any refutations to my points?

 

[Cosmacelf]

No, he said that "Tesla won't sink" but part of that is he is worried about things and is slowing things down at Tesla to ensure that it doesn't. Or would you rather he be like Lucid losing tons of money while still going full speed ahead on expanding manufacturing facilities and product lines?

As he said he is probably a little over paranoid, but as the economy improves, Tesla can/will speed things back up.

Yes, if you parsed his words carefully, you'll realize that he is saying he is positioning Tesla to grow slowly right now just in case things get worse so as to avoid a bankruptcy. Which is the exact same thing about worrying about going bankrupt (which is what I said). He doesn't think that Tesla will go bankrupt, but he is worried about it nonetheless.

 

[bkp_duke]

They are more or less at the level we had in the 1990s and that was a great decade. I suspect we are going to have this level or just slightly lower for the rest of the 2020s. And the economy will be fine with that. So stop whining Elon.

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That's not the entire picture, interest rates. The 1990s were a period of relatively low national debt. We are currently spending more money to finance the US debt than the entire Defense Dept budget. That's a massive resource drain from the single largest spender in the world (US Gov).

It's not just interest rates, but money supply. And the Fed has been tightening that like crazy in the past 18 months. Both of those make available capital not just for the US Gov, but for the population as a whole, greatly diminished. It's nothing like the 1990s when that is factored in.

 

[Cosmacelf]

Cybertruck can still rescue this. As long as it is not a dud and “start of production” truly means start of production and not a semi style start of production.

With the audio drop outs I might have missed this. Did he give a start of production date?

 

[Buckminster]

If you read all Elon's X posts you will realise that Elon's negativity is equally aimed at helping the whole world. Two wars on top of a huge deficit is going to make things worse. This was a political speech designed to attract headlines that might wake the world up before it is too late. I believe he is right to be concerned about the fragility of civilisation. Have you thought about Ancient Rome three times today yet?

Also suppressing SP keeps engineers hungry which is mission critical.

Depressing now but Elon is incubating a dragon's egg.

 

[Tony73]

(1) Drugs and Elon happens. (2) The sooner that expectations can be "managed" about 50% CACR the better. Why not have a Tesla official say the actual truth that it's rare that making physical goods over more than several years can occur at that rate? For software yes, but not for metal-bending. So "guide" to 30%, not 50%. (3) If CTs are hard and expensive to make, why not charge early adopters accordingly? Out of more than a couple million pre-orders, won't 1 out of 10 pay a boosted initial price? Tesla did it this way for Roadsters and Model S/X; they only came down the cost J-curve with Model 3/Y. (4) As for ordinary trucks, someone at Tesla is on record somewhere that they'd make a more ordinary truck if the CT (at least the exterior styling) fails.

The whole point of the cybertruck design was better manufacturability. Bending vs stamping. No paint. What changed ?

 

[Cherry Wine]

With the audio drop outs I might have missed this. Did he give a start of production date?

Delivery is scheduled for 11/30.

 

[Tony73]

Maybe Elon loves to shake out weak hands. Maybe he thinks you don’t deserve to win with Tesla if you don’t truly believe.

 

[Krugerrand]

Why not talk about the good quarter, the great new production lines installed, the fat cash in the bank and the amazing CyberTruck that is coming?

He sounds exhausted.

Because then everybody would be delusional about what’s really happening and we’d have ridiculous, detached predictions for next quarter.

Read the report, listen to what’s being said, and stop being emotional because he’s not saying what you wanted to hear in a manner you wanted to hear it. And that is for everyone, not just you.

You’d think this was the first ER everyone had heard, and the first time the company was navigating difficult times.

The company is in a GREAT financial position. Never before has a company so expertly expanded, reduced costs, increased efficiencies, gotten rid of debt, invested in the future, built their bank account, and rode a tumultuous macro environment to come out the other end healthier and stronger. But yeah, let’s rag on Elon because he hasn’t decided to be a puppet for the financial market crooks running the company’s SP. Shame on every one of you. You don’t deserve the potential future Elon is killing himself for.