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

[EVMeister]

Not hard to mount any kind of campaign when you do/say tons of really strange things. You’re right I am sure of what I see. But I do love the company. I wonder just how far he’s going to have to go to get those die hard ignor all evidence fan boys.

Geeze i thought Jobs was an arrogant idiot but I never suspected bigotry. I don’t believe everything I hear but I do have eyes. It’s what I’ve seen that concerns me. Fanboys can spin his bad actions, words as nothing but it doesn’t change what he says. Funny though, there was a time when folks would have called me a fanboy.

We’ve made good $ but I struggle with just letting what had been an otherwise great investment go… as we flounder around $250 for months.

It seems you have a possibly irrational hatred of somebody because of a biased picture that has been painted for you. That hatred has poisoned you against a company that has so much more to it than one poorly understood individual. An individual who is hated because of how disruptive he is. His ability to disrupt is also part of his brilliance and some will be riled up in the process. But try to take a more open-minded perspective and at least try to understand that there's so much more to Tesla than Elon - despite what the mainstream media might have you believe. Deciding you don't want to continue to invest in Tesla might feel good if you're a virtue-signaller, but in the longer term you'll regret it.

 

[UncaNed]

No construction started yet in Monterrey, MX:

Tesla Giga Mexico Flyover - 27 Dec 2023 | AdreanCG (1 hr ago)

At this rate they might get around to staking out the location of Tesla's driveway in 2026...

 

[cliff harris]

Zaddy's Year In Review

A year ago I joined I finally started contributing to this forum as long term bull who was realizing people were ignoring short term signals of lower earnings.

I earned many, many disagrees on posts like this pointing out how earnings would be much lower in 2023 than people were expecting.

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

Buffett owns a lot of car dealerships too. There's a reason he hasn't invested in Tesla. They're success degrades a lot of his businesses: Oil, insurance, car dealerships, utilities, even trains (autonomous Semis). Literally the opposite of Tesla. His last huge investment: occidental...

teslamotorsclub.com

Earnings for 2023 are going to end up around $3. Much lower than people were expecting a year ago.

The idea that COGs were going to reduce in line with price cuts was a joke a year ago and I hope people have finally accepted that reality.

ASPs have been cut further and for longer than even I was expecting.

I was also hoping Tesla Energy growth would be higher than it was - but still margins are looking promising.

Given all this, the stock performance has been outstanding.


What To Expect in 2024

Unfortunately, its still possible further price cuts are needed in 2024.

Reason #1: Used Tesla car prices have started declining again after flatlining in November

View attachment 1004315

Reason #2: Even with the Model 3 tax credit going away (allegedly), Tesla has been cutting inventory prices on both Model Y and 3. You would think the EV credit ending would stimulate demand for Model 3, but nope.

Reason #3. No tax credit for Model 3 in 2024. If true, this is a killer for Model 3 margins. People who were buying the cheaper Model 3s this year won't have anything to buy in their price target. Model Y's will certainly be preferred. If Tesla can produce more Model Y's that would be great, but model 3 production lines will loose economies of scale.

So for right now, I certainly expect automotive Q1 2024 earnings to be even worse than Q4 (which could be worse than Q3).

Automotive earnings declining again and again.... Not good.

(btw please don't lazily claim I'm a bear because I'm pointing out very relevant information, do better).

Model 3 highland refresh should boost demand a bit, but I don't think it overcomes a $7500 loss in credit for consumers. No proof COGs are dramatically reduced in highland.

Given Elon's comments about V12 performance in a somewhat obvious occurrence (heavy precipitation), it is nowhere near robotaxi level. Advanced L2 will be delivered in 2024 but that's not enough to boost margins signficantly.

Positives for 2nd half of 2024

I still think margins have to hit a minimum Q1 or Q2 in 2024. Interest rates steadying and lowering a bit should help some with this.

Energy revenue will double quarterly and profits may contribute $0.3 in a quarter.

Cybertruck at volume production in Q3 or Q4 could provide $0.25 in a quarter.

I think Bot will produce revenue (or reduced costs) for Tesla before robotaxis - further demonstration of it's useful capabilities in 2024 may allow institutions to model it in future growth.

I do expect in a year from now for quarterly earnings to be back over $1 thus high growth from what will come out of this pathetic 2023 Q4.

A forward PE ratio of 60 on 2025 earnings (say $5 - $6) could bring $300 to $350 before end of next year. But this will happen when the market realizes the positives I've laid out will happen. I'm not seeing that right now nor after Q4 earnings for sure. Maybe Q1 or more likely Q2 earnings.

So my stock predictions are:

On top of a macro correction in next 2 months pushing it down with everything else (after big boost from FOMC meetings), Tesla will correct down after Q1 earnings. Maybe get as low as $180 to $190 (just looking at 6 month support lines).

It will then go back up to mid $200s (like $240), and oscillate around there until market finally realizes changes in future earnings and it moves out of the channel upwards.

I predict it will break $300 in the summer of 2024.

I appreciate this well thought out analysis regarding the stock in 2024.
However, I think it is a bit pessimistic, because it extrapolates merely from what is known. This is very sensible for most companies, and certainly most auto companies, but I think it misses the mark when it comes to Tesla.
Tesla has 4 wildcards that could MASSIVELY shift the stock higher:

1) FSD is actually achieved, or looks imminent, at some point in 2024
2) Optimus accelerates and starts to reduce factory headcount
3) Model 2 is announced
4) Something Special.

You are noting that 3) is likely, but there is no weighting for 4). Over the 7.5 years I've held the stock, there have been relatively slow periods and then sudden shocks. Cybertruck was a MASSIVE shock. Optimus is also a shock. Do we know what will happen in 2024? certainly not, but if there is any company prone to suddenly announcing random shocks, its Tesla.

I don't think 2024 will bring us FSD, human-capable (limited domain) bots, model 2 and another big shock. But I *do* think that one of the 4 is likely. Tesla has put phenomenal effort into bot, fsd and nextgen manufacturing. The chances of NONE of this impacting the stock in 2024 seems extremely low to me.

FWIW my bet used to be on FSD, but has shifted to bot. That last video shocked me. There has obviously been progress since then. The next 6 months will be extremely interesting. Tesla is a stock that can be both boring and terrifying to HOLD. I Hold specifically because I know that one day, some totally un-foreseen tweet from elon is going to shock every one of us. I don't want to be buying in a frenzy the day AFTER this happens, and I will happily wait another year to see what unfolds.

 

[mongo]

Just saw this on a FB group I follow. Logic for claiming the 30% tax credit for the cybertruck as an energy storage system for your home.

I think this guys line of thought might be correct. If it is, this is huge! Looking for what others think of this.

View attachment 1004347

That's a big negatory on getting the credit for any vehicle (let alone a V2H only one)

The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity)

Cost recovery for qualified clean energy facilities, property and technology | Internal Revenue ServiceEnergy storage technology as defined in 26 U.S. Code Section 48E(c)(2)

26 U.S. Code § 48E - Clean electricity investment credit(2) Energy storage technology For purposes of this section, the term “energy storage technology” has the meaning given such term in section 48(c)(6) (except that subparagraph (D) of such section shall not apply).

26 U.S. Code § 48 - Energy credit(6) Energy storage technology (A) In general The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity) which receives, stores, and delivers energy for conversion to electricity (or, in the case of hydrogen, which stores energy), and has a nameplate capacity of not less than 5 kilowatt hours, and

 

[ninpb]

That's a big negatory on getting the credit for any vehicle (let alone a V2H only one)

The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity)

Didn't the Lightning have this capability and option for a special home charger that does vehicle to home? We should see if any of them will claim it soon since they got to market first.

 

[Artful Dodger]

(and reportedly expanding to 80GWh capacity sometime thereafter)

Hi, that's unlikely I think. The "report" was based on Bradford Ferguson camped out at Lathrop and seeing Tesla building a 2nd loading ramp...

That's fine, but the original plan was for 2 modules of 5K/yr Megapack production, for a total of 10K when complete. At 4MWh/megapack that's your 40MWh/yr.

What Bradford saw is almost certainly construction of the 2nd module, not 2nd plant.

 

[Artful Dodger]

That's a big negatory on getting the credit for any vehicle (let alone a V2H only one)

The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity)

So if the Range Extender is used at home in stationary storage 50-odd weeks per year, and only mounted in the Cybertruck for vacation, then it's not primarily used in transportation and thus may qualify for the grant? Usage Logs should settle it.

Cheers to the Guardhouse Lawyers!

 

[durkie]

It seems you have a possibly irrational hatred of somebody because of a biased picture that has been painted for you. That hatred has poisoned you against a company that has so much more to it than one poorly understood individual. An individual who is hated because of how disruptive he is. His ability to disrupt is also part of his brilliance and some will be riled up in the process. But try to take a more open-minded perspective and at least try to understand that there's so much more to Tesla than Elon - despite what the mainstream media might have you believe. Deciding you don't want to continue to invest in Tesla might feel good if you're a virtue-signaller, but in the longer term you'll regret it.

Haha so much for "open-minded perspective", huh? This comes across as incredibly patronizing. "Have you considered that maybe you're an irrational virtue-signaller that's poisoned against Tesla and you believe whatever is fed to you? Just a thought."

 

[Musskiah]

Hi, that's unlikely I think. The "report" was based on Bradford Ferguson camped out at Lathrop and seeing Tesla building a 2nd loading ramp...

That's fine, but the original plan was for 2 modules of 5K/yr Megapack production, for a total of 10K when complete. At 4MWh/megapack that's your 40MWh/yr.

What Bradford saw is almost certainly construction of the 2nd module, not 2nd plant.

Hi! Yes, Bradford's "report" does deserve a healthy slice of skepticism. Thanks for your thoughts. Looks like the "Edit" window has passed for my original post.

 

[Artful Dodger]

Hi! Yes, Bradford's "report" does deserve a healthy slice of skepticism. I will edit my post accordingly. Thanks for your thoughts.

Yeah, a cross-check definately helps: The energy density of CATL's LFP battery is currently 125 Wh/Kg, or 8 Kg/KWh. Doing the math, an extra 40GWh/yr is 8 * 40M = 320M kg per year, or 320 thousand tons!

Most cargo container ships carry about 24 thousand tons, so that's 13 extra ship's FULL of LFP batteries (thankfully, the fire-resistant lithium chemistry), or about 1 extra ship every 4 wks.

Somebody has to build all those extra batts (and source the raw materials). You can't change a order by that amount on a whim, or quickly. Bradford has never worked in logistics.

Cheers!

 

[MC3OZ]

I do think that the point of sale tax credit on Model Y will more than make up for the loss of the credit on Model 3. Austin has a lot of extra capacity for producing Model Y. I expect a huge increase in US sales of Model Y.

IMO the biggest potential impact on 2024 is 4680 production.

I am expecting a substantial increase in 4680 production at Austin by Q2 2024 at the latest,

if Austin can make higher volumes of Model Y's with 4680s then that will free up some 2170s for Model 3 and the Semi.

It is important to note that 2170s are needed for Model 3's made in the US to qualify for the credit. If some Model 3's made at Fremont have LFP packs then these could be exported to Canada and the Asia Pacific...

If it is possible to move Model Y at Fremont to 4680s in 2024/2025, that will mean more 2170s are available,

Model Y at Fremont could also be made with LFP packs for export.

Finally Panasonic could increase 2170 production at Sparks or elsewhere.

How the "cell supply" domino falls, determines how most of the other dominos fall.

 

[EQC_]

That's a big negatory on getting the credit for any vehicle (let alone a V2H only one)

The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity)

I agree there's limited to zero chance that an EV should get the tax credit as a home energy storage device...and I also have exactly zero experience in things legal or tax code related...

But that word "primarily" seems like a loophole waiting for somebody to test it. The typical personally-owned vehicle probably spends 1-2 hours per day in the actual transport of goods or individuals. 8.5-9.5 hours per weekday at a work location. And probably 12 hours per weekday at home, and more than 12 hours per day at home on Saturday and SUnday. Seems like over 50% time potentially sitting at home, in the garage, and plugged in...could that qualify as its "primary" use?

Extra tricky for the IRS to deal with since I don't think receipts or product ID's are generally included in a normal tax filing...just a form or section asking if you made a qualifying purchase, what it's cost was, and a calculation of the resulting credit. It feels like somebody might test it...and even if they get audited, they've got at least a reasonable first argument to suppor themselves in claiming a Powershare-capable EV's primary use is home energy storage.

Obviously: I am not a lawer or tax advisor and this is not advice...

 

[heltok]

Good video

 

[mongo]

Yeah, a cross-check definately helps: The energy density of CATL's LFP battery is currently 125 Wh/Kg, or 8 Kg/KWh. Doing the math, an extra 40GWh/yr is 8 * 40M = 320M kg per year, or 320 thousand tons!

Most cargo container ships carry about 24 thousand tons, so that's 13 extra ship's FULL of LFP batteries (thankfully, the fire-resistant lithium chemistry), or about 1 extra ship every 4 wks.

Somebody has to build all those extra batts (and source the raw materials). You can't change a order by that amount on a whim, or quickly. Bradford has never worked in logistics.

Cheers!

320 thousand *metric* tons
The largest container ship holds 24,000 *TEU*. Where each TEU (twenty foot equivilent unit) can be 21.6 metric tons net for 518k metric tons of capacity.
So one container ship is sufficient to haul 80GWh.

Back checking:
320M kg = 704 M lbs / 40k pound in a 20 foot container = 17.6k containers = less than one ship full.

 

[wipster]

nominate for post of the year

Would be easy if Lodger had posted this Monday...

 

[phantasms]

God's not here, we have to make up our own minds. Antics? As told by the bought-and-paid-for-in-full Media? You really haven't noticed the massive PR campaign conducted against Musk companies? Fish & Wildlife much? Rural Starlink? IRA bait'n'switch? Killer bloody ROBOTS?!

And you still haven't decided who's right and who's lying about blunt-smoking, pedo-guy, misogynist, anti-semite tax-evader alien Musk? You clearly aren't groking the gravity of the Mission, and why Elon is on his horse.

It doesn't sound like you even believe there is a curtain, never mind looking for who's behind it.

I have tremendous respect for you. The reason I disagreed with this is that there’s a third option. Some people think everything Musk is bad. Some people, especially here, think everything Musk is good, genius, 4D chess, etc etc. it’s exhausting. The reality is Musk is absolutely a net benefit to the planet and our wallets. However, it’s disappointing that many think he can do no wrong. Musk messes up. Musk makes mistakes. Musk says horrible stupid things. I don’t need to read an article about Musk I can see in writing the sometimes inappropriate and sometimes terrible things he says, and does. There’s a middle ground. Let’s all be a little more open to the idea this genius isn’t perfect in 2024 while continuing to support his companies and his mostly great actions.

 

[Usain]

I thought I would check back in on the view count for Marques Brownlee's Cybertruck video. It has now been viewed 18 million times!

This is now fourth on his all-time list. The three videos ahead of Cybertruck have been out there four years or more. His CT video has been out four weeks.

Yesterday, I spoke with a sales rep at the Tesla store in Fayetteville, GA. He said that he was there when the first Atlanta-area Cybertruck came to town. It was being prepped for display at the Avalon store. Someone saw it on the carrier and followed the CT into a restricted area to take pictures and ask questions. He was asked to leave.

A couple of days before Christmas, the CT was put on display. There was a 15 minute wait to just to see the outside of it. They aren't letting people sit inside yet.

I don't think Tesla will sell many Cybertrucks. There just isn't enough interest.

 

[wipster]

A little digging reveals that the cathodes of these batteries contain significant amounts of oxygen and the electrolyte itself is flammable. What this means: No external atmospheric oxygen is required for the fire to start and keep on running. When one thinks about that a bit, that's a lot why gunpowder works. Or dynamite: Both the oxidizer and the fuel are in one convenient package.

My old Navy training says fires involve fuel, oxidizer, and heat. Get rid of any of the three and the fire stops. But this is why airlines keep buckets of sand handy on airplanes for the occasional cell phone fire: One can put the phone in the sand and bury it. That doesn't actually stop the fire, of course: It just means that heating up a bunch of sand that can't catch on fire is a lot less damaging than setting fire to flammable stuff inside the airplane, not to mention containing the fumes that would otherwise poison people.

I imagine that dumping loads of water on a Lithium battery might cool it down to the point where it's not burning.. but if the electrolyte/cathode are still in contact, this might not work all that well.

CO2 works very well when one is attempting to exclude the oxygen in the air from the fuel. And, yeah, if there is O2-laden air present, it's going to make the flammable gases ejected under heat combust, too. So, filling up a hold with CO2 is probably going to help, but it's not going to cure things.

Finally: There's warnings that putting water on these kinds of fires doesn't necessarily help. Lithium, in general, is reactive enough so that when exposed to water it's perfectly happy ripping oxygen atoms off of water and continuing to burn. Think: Videos of magnesium burning under water. Or what happens when pure metallic sodium is exposed to water.

Everything above is a tyro's approach from first principles, not from a person involved in fighting real fires. I'd say the Coast Guard (which is full of those kinds of people with serious expertise on ships) and the crew have a nasty problem to solve.

I dunno.. flooding the hold to the brim?

How about sinking it?

 

[dhanson865]

I thought I would check back in on the view count for Marques Brownlee's Cybertruck video. It has now been viewed 18 million times!

This is now fourth on his all-time list. The three videos ahead of Cybertruck have been out there four years or more. His CT video has been out four weeks.

Yesterday, I spoke with a sales rep at the Tesla store in Fayetteville, GA. He said that he was there when the first Atlanta-area Cybertruck came to town. It was being prepped for display at the Avalon store. Someone saw it on the carrier and followed the CT into a restricted area to take pictures and ask questions. He was asked to leave.

A couple of days before Christmas, the CT was put on display. There was a 15 minute wait to just to see the outside of it. They aren't letting people sit inside yet.

I don't think Tesla will sell many Cybertrucks. There just isn't enough interest.

To archive this visually, MKBHD's top 4 videos are now:

and remember he will do a proper review with a delivered truck and follow up videos so you can expect other CT videos to creep up his most popular video list.

 

[Artful Dodger]

If some Model 3's made at Fremont have LFP packs then these could be exported to Canada and the Asia Pacific...

@mongo has explained to us (h/t also for the correction on 24K TEU cargo ships) that Tesla cars with CATL LFP packs could also qualify for IRA benefits if leased rather than sold (Tesla has recently made a big leasing bond deal with certain Investment Banks)

Tesla readies record-sized pool of EV leases for bond deal, a sign of resilience in luxury | Morningstar (Sep 14, 2023)

Another example is the fleet sales to Uber. These are the ideal cars for ride-hailing services, which will also get IRA benefits for LFP.

TL;dr I don't think the new IRA rules will be as impactful as TSLAQ hopes.