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

[SOULPEDL]

From what I can tell, the ones in a tizzy over it are the ones that want to get rich quick - especially in the media

Actually, Tesla is in a tizzy over it according to what I heard on the call - and for good reason. Interest rates are high relative to income. The two go together. Just look at the X post comments earlier about car sales around the country. People are not qualifying for the loans like they used to. This tightening is also bank risk related as they are still dry heaving from the commercial real estate crisis.

Meanwhile, we're probably 30K upside down on our Model YP. Imagine what my bank thinks on this fact. There's no security there, it's a negative asset.

When I back out new home prices (needing $100K income), the average family household can't afford a new car.

Spoiler: >60% Households Squeezed

This is household income, so lots of combined salaries mixed in. I use household income because that's who makes the house payment. For a 1/2M home you need about $120K income @ 7% interest to qualify... is what I figured yesterday.

Median US income is only like $34K. If you're single in this category, you likely can't even afford the car you currently own.

 

[Christine69420]

I saw the light today and turned pro advertising for Tesla.

I live in Norway where almost all new cars sold are electric. And had some friends with me in my Tesla for a trip today. These guys are comfy financially and drive an electric Ford Mustang Mach-e so they know the pros of driving electric.

But they were surprised over the range of my TMY. And shocked that it cost much less than their Mach-E. And that the big screen is so informative. They just loved the GPS system in my Tesla. And the TMY LR looked stylish and great - much better than their car. Before the trip was over they wanted to buy a TMY themselves.

I was surprised too - that they knew so little about Tesla. I know they have other friends with Teslas. And Tesla is the best selling car - not only EV - but the best selling car - here in Norway. So how come they did not know this already?

 

[Artful Dodger]

So how come they did not know this already?

How often do you see these friends? Did they talk to you, or ride in your Model Y, before chosing a Mach E? Be aware that they'll tell all their friends how they wish they'd have bought a Model Y. Tesla Market Share in Norway?

 

[Christine69420]

How often do you see these friends?

Not very often.

Did they talk to you, or ride in your Model Y, before chosing a Mach E?

No they had it already when I met them.

Tesla Market Share in Norway?

About 25% of total market.

 

[Cal1]

You’re right. Tesla is selling like crazy in spite of no advertising. I not a proponent of ads right now but your point is well taken. Who can blame your friends if they have to work so much to self educate. I do get it’s your responsibility to do your own homework and that Tesla doesn’t need to do for them. Just seems like they should probably be doing something.

 

[Words of HABIT]

I disagree because interest rates are not high. They are more or less back to what they were for over a decade before the 2008 financial crisis. For the last 15 years interest rates have been historically low. First due to the financial crisis, then they started creeping up again until COVID smacked them back down. They are obviously higher than what we have become used to the last dozen years or so, but I would not consider them to be high in a historical sense.

View attachment 984121

Agree. And for those hoping interest rates will fall, be careful what one wishes for. Interest rates will only fall when the world economies are in very serious trouble, and nobody should be hoping for that. We need to learn again to live with 5% interest rates for the long term and plan accordingly. 5% encourages savers to save, and spenders to spend as long as they don't take on too much debt. It is a good mid point. We have been spoiled the last 15 years with free money. Learn to live within one's means, there is nothing wrong with that.

 

[betstarship]

Actually, Tesla is in a tizzy over it according to what I heard on the call - and for good reason. Interest rates are high relative to income. The two go together. Just look at the X post comments earlier about car sales around the country. People are not qualifying for the loans like they used to. This tightening is also bank risk related as they are still dry heaving from the commercial real estate crisis.

Meanwhile, we're probably 30K upside down on our Model YP. Imagine what my bank thinks on this fact. There's no security there, it's a negative asset.

When I back out new home prices (needing $100K income), the average family household can't afford a new car.

Spoiler: >60% Households Squeezed

This is household income, so lots of combined salaries mixed in. I use household income because that's who makes the house payment. For a 1/2M home you need about $120K income @ 7% interest to qualify... is what I figured yesterday.

Median US income is only like $34K. If you're single in this category, you likely can't even afford the car you currently own.

View attachment 984146

Also -

https://www.twitter.com/saxena_puru/status/1714824012298432940

 

[Singuy]

Also -

https://www.twitter.com/saxena_puru/status/1714824012298432940

Is this inflation adjusted?

 

[betstarship]

Is this inflation adjusted?

Inflation is driving up consumer credit card debt by billions of dollars

Though inflation has fallen considerably from its 9.1% peak in June 2022, it's still higher than the Fed's 2% target, so you're spending more for less.

www.nbcnews.com

 

[Words of HABIT]

Meanwhile, we're probably 30K upside down on our Model YP. Imagine what my bank thinks on this fact. There's no security there, it's a negative asset.

Since when is any auto (used for daily driving) a positive asset? Autos, even EVs, even Teslas, are depreciating assets. Or are you thinking about the three year old 1969 Datsun Z240s which sold for more than their original purchase price, or one year old 2021 Tesla Model Ys and 3s which were selling for more than their original asking price. These cases are not the norm. Most autos depreciate 30% the day they are driven off the lot and depreciate further each year of ownership. Quality EVs, with less moving parts, should last 25% to 50% longer than comparable ICE vehicles and therefore should depreciate less rapidly, but certainly will still depreciate.

 

[betstarship]

I agree with everything written here. Not sure if its off-topic

https://x.com/pmarca/status/1713930459779129358

 

[elasalle]

https://twitter.com/x/status/1715832086261608900

 

[NicoV]

The Model 3 LR with 18” wheels is listed with a WLTP range of 678 km. That’s amazing. I don’t think any competition comes even close. It’s almost as large as the Model S 19” 723 km.

 

[joh01652]

Regarding additional vehicle manufacturing capacity within existing U.S. facilities, I found this in Tesla's 2018 10K, page 10.

"Gigafactory 1 is being built in phases. Tesla, Panasonic and other partners are currently manufacturing inside the finished sections. Our present plan is to continue expanding Gigafactory 1 over the next few years so that its capacity significantly exceeds the approximately 500,000 vehicle per year capacity that we announced when we first started developing it, and we have additionally added capacity for manufacturing our energy storage products. We have also announced that we will likely manufacture Model Y, which we intend to produce at high volumes by the end of 2020, at Gigafactory 1."

I don't ever remember Giga 1 being initially planned as such a large volume producer of vehicles. I just have always thought of it as a place where battery packs, drive units, low volume semis and energy products would be made, not passenger vehicles. Interesting to think that Tesla could use Giga Nevada for >500,000 vehicle production if they decided to go that direction.

 

[AMN]

The Model 3 LR with 18” wheels is listed with a WLTP range of 678 km. That’s amazing. I don’t think any competition comes even close. It’s almost as large as the Model S 19” 723 km.

What was the WLTP range for the old Model 3?

 

[Usain]

Tesla's Dramatic Decline in Recalls: From Millions to Thousands

Explore how Tesla's significant reduction in recalls showcases its commitment to quality and innovation, setting new standards in the electric vehicle industry.

www.notateslaapp.com

Yea, Tesla is so far ahead in EV engineering and safety.

Here is more bad news for Ford. Looks like the software "fix" didn't fix the problem. Gee, I wonder why monitoring the problem with software didn't fix it? This reminds me of what GM went through with the Bolt EV and their battery fires. "Monitoring" doesn't fix anything.

Ford Recalls 35,000 Mustang Mach-Es Citing Battery System Hazard

DC fast charging and repeated wide-open pedal events can cause the high-voltage battery main contactors in the Ford Mustang Mach-E to overheat.

insideevs.com

 

[cliff harris]

I can also remember higher interest rates, but then I'm 53. I think the problem is a lot of people in their mid twenties do NOT remember such rates, and those are the people who would need to take out a loan to buy a new Tesla.
Us older folk probably have higher salaries, and maybe even no mortgage, so although we are 'interest-rate-wary', we are less likely to be in the market segment elon worries about.

I do think there is some chance the earnings call talk was a bit of a negotiating tactic with mexico though. I agree with the hypothesis that a poor economy makes a model 2 rollout more urgent, not less. Regardless of this, we will get some model 2 (or whatever they call it) from texas first anyway. And cybertruck/semi before then!

 

[SOULPEDL]

Since when is any auto (used for daily driving) a positive asset? Autos, even EVs, even Teslas, are depreciating assets. Or are you thinking about the three year old 1969 Datsun Z240s which sold for more than their original purchase price, or one year old 2021 Tesla Model Ys and 3s which were selling for more than their original asking price. These cases are not the norm. Most autos depreciate 30% the day they are driven off the lot and depreciate further each year of ownership. Quality EVs, with less moving parts, should last 25% to 50% longer than comparable ICE vehicles and therefore should depreciate less rapidly, but certainly will still depreciate.

Ya sorry, that hasn't happened yet (massive depreciation I mean). I spoke a bit too early. There were a bunch of vehicles bought last year at ultra-peak prices, including mine, that are now seriously underwater, beyond what's normal. I'm not sure if it's these types or the one who just can't keep up with inflation and stopped paying, but there's a bubble there that could burst soon. And this feeds into the overall banking debacle. How much longer can un-affordable vehicles accumulate on Dealer lots before the prices break? I don't have inventory numbers handy, but it's been discussed here and on CarEdge what's really happening. It's the calm before the storm right now.

Edit: Although... Factories are closing which will support prices for a while more.

 

[MC3OZ]

You’re right. Tesla is selling like crazy in spite of no advertising. I not a proponent of ads right now but your point is well taken. Who can blame your friends if they have to work so much to self educate. I do get it’s your responsibility to do your own homework and that Tesla doesn’t need to do for them. Just seems like they should probably be doing something.

I would like to see some Tesla placements in shopping centres/malls just the refreshed Model 3/Y, some information boards/screens with price, range, supercharger network, etc. Price has to be prominent, and displayed in many locations, including leasing payments.

And a couple of staff members who can book test drives at nearby locations.

My rationale is the media/social media landscape is fragmented, and people tend to tune out of ads.

Many people visit shopping centres/malls, and if something grabs their attention and they decide to investigate, they pay a lot more attention.,

The same cars and staff could tour a few shopping centres, they only need to stay for a week or 2 in each location. One experienced staff member could train up a few local Uni Students to do this job.

The new Model 3 Highland is good enough to attract attention.

And repeat the exercise 3-6 months later with the Cybertruck in US locations.

I aware that they already do this, I suggest 3-4X the current program..

 

[insaneoctane]

I do get it’s your responsibility to do your own homework and that Tesla doesn’t need to do for them

Hmmm. One might argue if it results in increased sales volume and, potentially, higher margin, Tesla ought to do it for them...