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

[Artful Dodger]

Elon is pulling back expansion plans because he is worried about a recession. Which means, the battery supply is there...

No, it does not mean that, especially with the IRA mineral sourcing requirements for "Foreign Entities of Concern" making more than half the world's battery supply ineligible for the upcoming 2024 point-of-sale rebate (while differentially affecting low-income earners).

 

[Featsbeyond50]

I find it ridiculous that priority is not been given to the next generation vehicle. Irrespective of the state of the economy a ~$25K vehicle will sell in huge numbers outside the USA alone.
Initially it can be made in Berlin, Shanghai and Texas and then later the Mexico factory so no need to worry about the costs of getting a new factory.

Priority to the next gen vehicle is what I read between the lines of last nights call. What they said about 3 & Y growth sounds like they have no plans to build more lines. Growth will come from improving production efficiencies. Not going to try to ramp CT above 250K. This tells me Elon has moved on from consumer vehicle production and is focused on FSD, Next Gen (no doubt more so as Robotaxi) and Bot.

 

[Krugerrand]

I think we're on the same page here. Elon Musk said they were willing to sell the cars at zero profit to make money on AI. To be consistent with this, they should be scaling production as quickly as possible in order to sell AI on more vehicles in the future, shouldn't they?

No. They should be expanding the company and scaling production in the most responsible way so that the ultimate goal can be reached. AI isn’t even ready.

It does absolutely no good to pull a Rivian/Lucid and expand beyond reality of the situation, frivolously waste money, and all they have textbook incorrectly done.

Elon has shown over the last decade that he knows exactly what he’s doing growing the business in a healthy, responsible way. Everyone needs to stop pretending they know how to do it better, especially with the limited knowledge they have of what’s happening behind the scenes.

 

[replicant]

One word - batteries.

Battery supply chain is not remotely scaled enough for the 25k car. No point in pushing it forward when you can't build it. Putting the pieces in place to hit that battery supply is going to take a few more years.

Then we need a smaller EV with good range, then. Whatever the price. Having the Model 3/Y as the smallest option in the lineup isn't good enough for a global auto manufacturer.

 

[Krugerrand]

Then we need a smaller EV with good range, then. Whatever the price. Having the Model 3/Y as the smallest option in the lineup isn't good enough for a global auto manufacturer.

And one day we will have it. Today is not that day.

 

[Artful Dodger]

Priority to the next gen vehicle is what I read between the lines of last nights call. What they said about 3 & Y growth sounds like they have no plans to build more lines. Growth will come from improving production efficiencies. Not going to try to ramp CT above 250K. This tells me Elon has moved on from consumer vehicle production and is focused on FSD, Next Gen (no doubt more so as Robotaxi) and Bot.

Concur, except for the part about not trying to ramp CT beyond 250K/yr. I think they set an immediate goal (125K) and then re-evaluate. Steps in increments of 125K production lead to 250K, then 375K if costs come down and they can secure enough raw materials.

TL;dr They haven't decided if they'll ramp above 250K

 

[FreqFlyer]

If Austin and Berlin were ramped up to Shanghai, at what price is Tesla moving an extra................what.........an extra 500K Model Ys in todays market?

It may have to go below $0 per unit to move them.

Meant to say, an extra 500K Model Ys on top of Model Ys being sold today.

 

[Featsbeyond50]

Context, pls and thanks, which you have none.

He didn’t say 0% margins ‘today’ or 0% margins at the risk of destroying the company. He talked about it in relationship to AI. But you know that.

So what exactly is your reason for purposely removing all the context of that ER call on the topic?

Elon has said something to the effect of prioritizing selling more cars for the mission over maintaining margin. At least for the near term, producing more cars is no longer the objective. Risk taking Elon isn't afraid on building more production lines when he's got 19B in the bank. He's all in on Next Gen.

 

[EverettRuess]

And one day we will have it. Today is not that day.

Don't I remember you on that Seinfeld episode about the soup stand.

 

[Featsbeyond50]

TL;dr They haven't decided if they'll ramp above 250K

LOL... Thanks for recognizing and accommodating my attention deficit disorder, but I can make it through two lines!

I've come to the conclusion it's best to take Elon for his word, verbatim, and not try to read into what he says.

 

[Doit]

There's a fixed audio version of the Q3 Conf. Call now on Youtube:

Tesla Q3 2023 Financial Results and Q&A Webcast (Full Audio) | Tesla

The audio feed on X is far better (except CFO's still awful) and no blank in the beginning at least:

https://twitter.com/x/status/1714755694144999746

I looked at it soon after end of the call, so above feed was live and original.

 

[Usain]

I find it ridiculous that priority is not been given to the next generation vehicle. Irrespective of the state of the economy a ~$25K vehicle will sell in huge numbers outside the USA alone.
Initially it can be made in Berlin, Shanghai and Texas and then later the Mexico factory so no need to worry about the costs of getting a new factory.

I wish we had gotten a little more insight on where the Gen 3 vehicle is in its stage of development. A lot of good questions were not asked.

Is the shape of the vehicle finalized?
Is there a prototype?
Is there a prototype assembly line being built?
Will it be a 2-seater?
Has it really been decided if it will initially have a steering wheel?
Have any final decisions been made at all?

 

[Usain]

https://twitter.com/x/status/1714976789083140588

Did we ever get firm confirmation that Tesla is using the dry process on both anode and cathode?

 

[Featsbeyond50]

How is that not pursuing the market? That’s Tesla’s current ‘external’ goal given the information they have in the moment. As what always happens, Tesla will change the goal if they acquire new information. You’ve no idea what their internal goal or ‘wishes’ might be, but they’ve got to start somewhere and plan for a goal they feel is reachable and financially good for the company.

You absolutely are free to make up your own wishes, just preface it with: This is my wish -

Go back and reread. Sentence started with "Wish they had done..."

Ford makes a million F150s per year. Tesla can do everything better than Ford. If the CT could take that market they would do it but they are already relegating it to being a niche product.

Not pursuing the market - check
Acquired new goal - Robotaxi/Bot - check.

 

[mongo]

No, it does not mean that, especially with the IRA mineral sourcing requirements for "Foreign Entities of Concern" making more than half the world's battery supply ineligible for the upcoming 2024 point-of-sale rebate (while differentially affecting low-income earners).

2024 kicks in the excluded entities on components, not minerals. Minerals kicks in 2025.

(7) Excluded entities. For purposes of this section, the term "new clean vehicle" shall not include --
(A) any vehicle placed in service after December 31, 2024, with respect to which any of the applicable critical minerals contained in the battery of such vehicle (as described in subsection (e)(1)(A)) were extracted, processed, or recycled by a foreign entity of concern (as defined in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5))), or
(B) any vehicle placed in service after December 31, 2023, with respect to which any of the components contained in the battery of such vehicle (as described in subsection (e)(2)(A)) were manufactured or assembled by a foreign entity of concern (as so defined).

 

[Curt Renz]

Craig Johnson - Piper Sandler - this morning:
TSLA—Indicated lower this AM: Shares appears poised to retest support from a prior breakout level. • RS has inflected higher off the midline and impressive TechniGrade ranking. • Add to positions once support has been confirmed.

 

[dhanson865]

Tesla Energy up to 24.4% gross margins and rising.

 

[Artful Dodger]

Elon has said something to the effect of prioritizing selling more cars for the mission over maintaining margin. At least for the near term, producing more cars is no longer the objective. Risk taking Elon isn't afraid on building more production lines when he's got 19B in the bank. He's all in on Next Gen.

There was a Conf. Call maybe 4 years ago when Adam Jonas asked about sacrificing margin for volume. At the time, Elon said they'd prefer higher volume IF the same total revenue could be earned. Folks love to forget that last part.

This is now a simple Management Science problem: Maximize profit where (Profit/Unit) * Units = Profit

Unlike Gary Black, Tesla actually DOES know the elasticity of demand for its existing products, and is now closing in on maximizing profits by tailoring production volume, given predictable costs. This is a College Jr's problem.

Tesla will roll the cash into Gen 3, robotaxi, +optibot. That, we can keep a secret (between you and me).

Cheers!

 

[Mengy]

I wish we had gotten a little more insight on where the Gen 3 vehicle is in its stage of development. A lot of good questions were not asked.

Is the shape of the vehicle finalized?
Is there a prototype?
Is there a prototype assembly line being built?
Will it be a 2-seater?
Has it really been decided if it will initially have a steering wheel?
Have any final decisions been made at all?

It's probably too soon for that. They need to launch & ramp CT yet and they don't want to Osbourne M3 sales in the meantime by talking about Gen3 too much.

 

[Krugerrand]

Elon has said something to the effect of prioritizing selling more cars for the mission over maintaining margin. At least for the near term, producing more cars is no longer the objective.

But they are going to produce more cars starting with this quarter and that’s as near term as it gets. They literally just shutdown factories so they could increase production.