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

[GOVA]

I'm not sure Elon expects the economy to worsen, but I certainly think he wants to be prepared in case it does worsen. The pullback on guidance suggests this given what Tesla was guiding just a quarter or two ago.

Once the Fed starts lowering rates I'd expect to see Tesla step on the growth accelerator again. Probably mid to late next year if inflation continues along it's trend.

This sums everything up very well. Quite simple really.

 

[Artful Dodger]

Wow, I guess Kevin isn't expecting an invite to Elon's next roundtable, lol:

Dillon Loomis did a thorough take-down of Meat(hed) Kevin today:

That's the spanking Meat Keven earned with his TV tantrum. Good burn (good video, too)

Cheers!

 

[Mike Smith]

I'm looking at the earnings transcript and the confusion around the 50% CAGR is easily explained.

The questioner actually asked two questions in succession - 1) About the growth rate in 2024, and 2) When Tesla will return to 50% CAGR. The second question doesn't actually make sense because they have maintained the 50% CAGR since it was announced. If he wanted to know when the next single year of 50% growth would be he should have asked that.

The CFO first answered question 1 by saying Tesla won't give 2024 projections until the Q4 earnings call. This has been standard practice for as many years as I can remember.

Elon then sort of answered question 2 by cracking a joke about the world running out of atoms. He's cracked this same joke before so it doesn't mean anything.

The confusion was caused by the analyst asking two questions at once and not knowing what CAGR means. The Q3 slide deck clearly indicates that Tesla intends to maintain the long term 50% CAGR.

 

[mongo]

I'm sure the top Toyota engineers are working hard on figuring out how to transfer hydrogen over the NACS connector.

Well you see, they add a water tank and the NACS is connected to a pair of electrodes which convert that to hydrogen and oxygen. 'Exhaust' from the fuel cell is captured back in the tank so no refilling is needed.

/s

 

[Krugerrand]

Good discussion

https://twitter.com/x/status/1715129567633908195

That is priceless. Everything about Tesla is awful but I continue to hold 10 shares because the company is growing faster than any on the planet of its size.

 

[Hiline]

What changed so drastically since Q3 2022 and Q3 2023? Inflation has gone down and what interest rates have been risen like 1%.

This time last year people expected rates to stabilize in 2023 and start to come down later in the year. Not only did the Fed continue to raise rates, but also the high interest rates are now believed to be sustained over the next couple of years. The high interest rates are going to disrupt the economy significantly, making debt-financed investments and purchases much more expensive. What used to be thought of as a short-term fix to inflation has now become a long-term reality.

 

[Singuy]

Weltmeister is going bankrupt in China, once considered one of the big 4. Sales have reach zero, network error, and factory shut down. Due to network error, over 100k weltmeister vehicles no longer work correctly.

 

[Usain]

Gen 3 in Austin is from the Issacson's book. I don't know that I've seen any confirmation from Tesla/Elon.

I don't think there has been confirmation, but it appears that Issacson personally witnessed the decision.

It would be nice to get confirmation though.

 

[ke6jph]

OT,
All is right in Tesla land….
Cyber delivery today!
(Now just need the truck………)
Not to be opened until delivery.

 

[jerry33]

Possibly worth noting that Model Y sales are also bigger because Tesla chose to produce more of them. Granted, Tesla has the best insight into the demand for each model, and that undoubtedly drives their factory decisions...but Tesla only produces the Model 3 in Fremont and Shanghai...while the Y is produced at Fremont, Shanghai, Austin, and Berlin. So, even if Model 3 demand suddenly became higher, the Model Y would sill out-sell it (one way or another) simply because Tesla has the equipment in place to build more Y's. But, Elon did always focus on the Model Y having the higher demand, predicting that it (not the Model 3) would eventually be the highest selling auto in the world.

Of course...this is a Chicken/Egg type question. Is the Model Y selling more because more people want that design, or because Tesla thought more people would want that design and so pushed harder to make more...

There are more hatchback people than there are trunk people. Also CUVs are very popular right now.

 

[Chunky Jr.]

The Fed is saying the economy is strong and growth is above trend. Unemployment is under 4%. Interest rates are back to "normal" (where they were before the 2008 financial crisis). I don't get why Elon and others are saying macro is so challenging. Maybe it's a different story outside the US.

 

[CHGolferJim]

Polite disagree.

I agree that there might be an effect in the next few years (i.e. we don't ramp 50% volume every year) but since they are making progress on the design of the manufacturing line of the Gen3 vehicle (in Austin), the lessons will be learned in Austin as opposed to in the newly built factory.

Shanghai proved that copying a ramp which you have solved is doable. Tesla will just design the line in Austin, where the designers/engineers are currently, and try to incorporate those (cheaper) lessons in the design of Giga Mexico. This is actually a good thing since v1.0 of any new line/factory is not optimal. (Again, see Shanghai vs Fremont)

Not that I'm happy with the delay or saying "this is all 4D Chess by Elon", but I just want to point out that not as much time is lost as some think there will.

In other words: Tesla is assessing the situation/circumstances on a day to day basis and being flexible in its decision making. This is a good thing and one of the reasons why I have so much faith in the company. If they blindly started to build Mexico because the Powerpoint presentation from three quarters ago said so then this would be a recipe for disaster.

They are making the best out of a bad situation.

A few months ago I calculated that a 40% CAGR would reach 20 mil in 2030.

 

[Cosmacelf]

I'm looking at the earnings transcript and the confusion around the 50% CAGR is easily explained.

The questioner actually asked two questions in succession - 1) About the growth rate in 2024, and 2) When Tesla will return to 50% CAGR. The second question doesn't actually make sense because they have maintained the 50% CAGR since it was announced. If he wanted to know when the next single year of 50% growth would be he should have asked that.

The CFO first answered question 1 by saying Tesla won't give 2024 projections until the Q4 earnings call. This has been standard practice for as many years as I can remember.

Elon then sort of answered question 2 by cracking a joke about the world running out of atoms. He's cracked this same joke before so it doesn't mean anything.

The confusion was caused by the analyst asking two questions at once and not knowing what CAGR means. The Q3 slide deck clearly indicates that Tesla intends to maintain the long term 50% CAGR.

Thanks for explaining how Elon managed to completely screw up, but how and why he screwed up doesn’t negate that he did in fact screw up the messaging.

The vast majority of people will walk away thinking 50% average annual CAGR is dead and buried. That is the screw up. No more needs explaining.

”We dug our own grave with Cybertruck” … again, there’s nuance to that statement but no CEO should ever, ever utter words like that because they WILL be taken out of context. It’s messaging 101.

That’s why I said Elon was on drugs this conference call. Normally, he’s accurate to a fault, boring us with long winded explanations of S curves. On this call, he just spat out bombs and didn’t bother defusing them.

 

[dhanson865]

It's at 220 now but his attitude was right at 224.

 

[brkaus]

Thanks for explaining how Elon managed to completely screw up, but how and why he screwed up doesn’t negate that he did in fact screw up the messaging.

The vast majority of people will walk away thinking 50% average annual CAGR is dead and buried. That is the screw up. No more needs explaining.

”We dug our own grave with Cybertruck” … again, there’s nuance to that statement but no CEO should ever, ever utter words like that because they WILL be taken out of context. It’s messaging 101.

That’s why I said Elon was on drugs this conference call. Normally, he’s accurate to a fault, boring us with long winded explanations of S curves. On this call, he just spat out bombs and didn’t bother defusing them.

Had to hurry back to his tweeting?

 

[dhanson865]

Thanks for explaining how Elon managed to completely screw up, but how and why he screwed up doesn’t negate that he did in fact screw up the messaging.

The vast majority of people will walk away thinking 50% average annual CAGR is dead and buried. That is the screw up. No more needs explaining.

”We dug our own grave with Cybertruck” … again, there’s nuance to that statement but no CEO should ever, ever utter words like that because they WILL be taken out of context. It’s messaging 101.

That’s why I said Elon was on drugs this conference call. Normally, he’s accurate to a fault, boring us with long winded explanations of S curves. On this call, he just spat out bombs and didn’t bother defusing them.

It's literally in the Q3 2023 slide deck

"We are planning to grow production as quickly as possible in alignment with the 50% CAGR target we began guiding to in early 2021. In some years we may grow faster and some we may grow slower, depending on a number of factors. For 2023, we expect to remain ahead of the long-term 50% CAGR with around 1.8 million vehicles for the year."

Here's the math simple as can be that they are still above the 50% CAGR even if you assume 0 deliveries in Q4 2023.

"Since 2020, Tesla has achieved >50% average annual growth in vehicle deliveries (see chart). In fact, they're ahead of that pace in 2023, with a full quarter left to go!"

the actual guidance $TSLA provided at the end of 2020:

“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”

Note: the y-axis on this chart is logarithmic, so exponential growth (compounding at 50% per year) appears as a straight line.

https://twitter.com/x/status/1712074069590335747

 

[Cosmacelf]

Here's the math simple as can be that they are still above the 50% CAGR even if you assume 0 deliveries in Q4 2023.

"Since 2020, Tesla has achieved >50% average annual growth in vehicle deliveries (see chart). In fact, they're ahead of that pace in 2023, with a full quarter left to go!"

the actual guidance $TSLA provided at the end of 2020:

“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”

Note: the y-axis on this chart is logarithmic, so exponential growth (compounding at 50% per year) appears as a straight line.

View attachment 983693

https://twitter.com/x/status/1712074069590335747

Yes I understand your point, did you understand mine?

 

[dhanson865]

Yes I understand your point, did you understand mine?

Yes, Elon didn't explain (the thing he's been explaining since the end of 2020) to anyone's satisfaction during yesterdays call. You get a cookie.

 

[Mengy]

Yes, Elon didn't explain the thing he's been explaining since the end 2020 to anyone's satisfaction during yesterdays call. You get a cookie.

I think the problem with perceived CAGR will arrive at end of year 2024. In order to continue the trend set in 2020 Tesla would need to hit a deliveries of 2,529,463 next year, and I don't believe that is possible now given current line capacities as stated last night, even with potential line upgrades occurring next year. Now of course down years can be expected and Tesla might very well have subsequent years which boost P&D back above the 50% CAGR line, but I do think for NEXT year we will see analysts and investors make a big deal about Tesla "missing" their growth targets if they come in under that 2,529,463 number (which I think is very likely).

I could be very wrong of course, but currently I'm expecting to see this play out EoY 2024 and become new FUD against Tesla.

 

[dhanson865]

I think the problem with perceived CAGR will arrive at end of year 2024. In order to continue the trend set in 2020 Tesla would need to hit a deliveries of 2,529,463 next year, and I don't believe that is possible now given current line capacities as stated last night, even with potential line upgrades occurring next year. Now of course down years can be expected and Tesla might very well have subsequent years which boost P&D back above the 50% CAGR line, but I do think for NEXT year we will see analysts and investors make a big deal about Tesla "missing" their growth targets if they come in under that 2,529,463 number (which I think is very likely).

I could be very wrong of course, but currently I'm expecting to see this play out EoY 2024 and become new FUD against Tesla.

Maybe they should just have Martin Viecha read this blurb at the begging of each quarterly call and then skip questions about CAGR


“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”