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

[Mengy]

https://twitter.com/x/status/1750360180439859223

It will be interesting one year from now to see how 2024 looks on that graph by James. I expect 2024 revenues to still be larger than 2023, but by a smaller difference than the graph would seem to predict trend-wise.

Of course, by 2028 or so it will be off the hook!

 

[The Accountant]

I agree, I love the post, and yet this will likely delay my early retirement. I've been waiting for it to revisit $400+ and I guess I will have to keep waiting.

I think we have all been there and it stinks. We have faith in the long term but life events have us wanting the run to happen now.
I'm not giving up on 2024. If macros are on our side and the narrative changes for Tesla/EVs . . .we can see a move up.
Often when I expect the stock to go up it goes down . . when I expect it to go down, it goes up. Expectations are low - making it easier for Tesla to beat them.

 

[mongo]

The tax items is a negative going forward for EPS. I was waiting for this day.
Difficult topic to explain but I will try.
Tesla would book a low tax rate in the past because they would take losses from prior years and offset them against the income of the current quarter.
So the tax rate instead of 20%-25% would only be 10% or so.
For example, if they has $2m in profits, they would deduct $1.5m losses from prior years and only record tax expense on 0.5m.
Now that they took the entire benefit in Q4, they have to book tax expense on the $2m not the $0.5m (there are no more tax losses - they used them all up).
Income tax expense could be double going forward - reducing EPS. This does not impact cash.
Hope this helps.

Question: (how) was it the entire amount?
2022's 10-K called out $7.35 Billion in differed tax assets and $18 Billion of federal loss carry forwards.

As of December 31, 2022, we recorded a valuation allowance of $7.35 billion for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred taxes decreased by $1.73 billion in the year ended December 31, 2022, and increased by $6.14 billion and $974 million during the years ended December 31, 2021 and 2020, respectively. The changes in valuation allowance are primarily due to changes in U.S. deferred tax assets and liabilities incurred in the respective year. The decrease in the year ended December 31, 2022 included utilization of $13.57 billion net operating loss carry forwards to offset our 2022 U.S. taxable income. We have $532 million of deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-not to be realized given the expectation of future earnings in these jurisdictions.

As of December 31, 2022, we had $18.0 billion of federal and $14.0 billion of state net operating loss carry-forwards available to offset future taxable income, some of which, if not utilized, will begin to expire in 2023 for federal and state purposes. A portion of these losses were generated by our acquisition of SolarCity Corporation (“SolarCity”) and some of the other companies we acquired, and therefore are subject to change of control provisions, which limit the amount of acquired tax attributes that can be utilized in a given tax year. We do not expect the change of control limitations or expiration dates to significantly impact our ability to utilize these attributes. As of December 31, 2022, we had research and development tax credits of $969 million and $734 million for federal and state income tax purposes, respectively. If not utilized, the federal research and development tax credits will expire in various amounts beginning in 2024. However, the state of California research and development tax credits can be carried forward indefinitely. In addition, we have other general business tax credits of $197 million for federal income tax purposes, which will not begin to significantly expire until 2033.

 

[GhostSkater]

Tesla May Be Ready To Sell More 4680 Model Ys Soon | notateslaapp.com (5 hrs ago)

Doing the math, it's obvious that even 1 line of 4680 cell production is more than enough for the Cybertruck. Tesla has 2 lines running now, or soon-to-be-running. It's obvious from recent Giga Texas drone videos that Model Y production has stepped up the pace. Tesla will have 4 lines runnings soon, (4 more by year end are almost certainly for Gen 4).

As I said a few times, soon they will have more cells on hand than what we could imagine, literally, I have no idea where they will put 300+ GWh of just in house production in the near term, make 400, 500 or 600 GWh plus external suppliers if they add lines to Berlin, Shanghai and Mexico

They might hit the 1 TWhr anual cell consumption sooner than latter

If we split that between vehicles and storage, and assume that average pack size trends downs with NGV to 50 kWh, 500 GWh is enough for 10M vehicles

So now it starts to make sense why they are breaking ground on so many lines, needs at least 1 TWh for for vehicles alone for 20M by 2030

 

[Todd Burch]

The big wildcard in the shorter term is macros and interest rates.

Rates start easing, as expected this year? Margins start climbing.

 

[Chunky Jr.]

This is a nice research note

“It’s time to be patient. The next-generation vehicle, FSD upgrades, margin improvement, and Optimus will likely bring an acceleration in revenue growth. But not this year — 2024 will be subdued; probably a trough, but still relatively slow (we model ~18% y\y revenue growth). Growth curves are seldom smooth, and Tesla is no different.

As we wrote in a recent note, technology adoption curves aren't generally smooth. Not only does growth accelerate and slow, but for some technologies —like autos and washing machines — we have gone through periods of reductions in adoption, likely due to macroeconomic/geopolitical factors.

And, we are firmly NOT in the camp that Tesla is just a typical auto company or that Tesla growth will slow forever. Is Google just another advertising company? Apple just another telecom equipment company? Netflix just another media company? Amazon just another retailer? Those companies changed their respective industry paradigms through the implementation of technology tools/Silicon Valley thinking. As has Tesla. And Tesla also has multiple levers to re-accelerate growth and improve margins. We will just have to wait for them to kick in for now.

We think the first catalyst to reignite investor excitement could be margin improvement. We appear to have bottomed for now, but investors are likely waiting for step change progress. That may come this year — particularly as we think the days of big price reductions are likely behind us. We will see. So, it’s time to bide time. Wait for the next leg up in the stock. We are still quite bullish on Tesla's long-term growth prospects. We think EVs will replace ICE vehicles despite recent countervailing narratives. We see vehicle autonomy as one of the highest value-creating technologies to be deployed. Ever. And Tesla, with its razor/ razorblade approach, is a leader in this real-world AI. We think Tesla is Apple on steroids as it focuses on manufacturing and a higher level of vertical integration. Tesla is THE sustainability behemoth, in our opinion.”

Source:

https://twitter.com/x/status/1750372626805993841

 

[Artful Dodger]

If we split that between vehicles and storage, and assume that average pack size trends downs with NGV to 50 kWh, 500 GWh is enough for 10M vehicles

I did some pack-size estimates based on the 123 KWh CT pack and some composite factorization for number of cells used. TL;dr is I think the LR Model Y will have a 82 KWh pack and the Gen 3 car will have a 41 KWh pack, all of which are capable of charging on 800v DCFCs like Supercharger v4.

Cheers!

 

[Quesder]

This is a nice research note

“It’s time to be patient. The next-generation vehicle, FSD upgrades, margin improvement, and Optimus will likely bring an acceleration in revenue growth. But not this year — 2024 will be subdued; probably a trough, but still relatively slow (we model ~18% y\y revenue growth). Growth curves are seldom smooth, and Tesla is no different.

As we wrote in a recent note, technology adoption curves aren't generally smooth. Not only does growth accelerate and slow, but for some technologies —like autos and washing machines — we have gone through periods of reductions in adoption, likely due to macroeconomic/geopolitical factors.

And, we are firmly NOT in the camp that Tesla is just a typical auto company or that Tesla growth will slow forever. Is Google just another advertising company? Apple just another telecom equipment company? Netflix just another media company? Amazon just another retailer? Those companies changed their respective industry paradigms through the implementation of technology tools/Silicon Valley thinking. As has Tesla. And Tesla also has multiple levers to re-accelerate growth and improve margins. We will just have to wait for them to kick in for now.

We think the first catalyst to reignite investor excitement could be margin improvement. We appear to have bottomed for now, but investors are likely waiting for step change progress. That may come this year — particularly as we think the days of big price reductions are likely behind us. We will see. So, it’s time to bide time. Wait for the next leg up in the stock. We are still quite bullish on Tesla's long-term growth prospects. We think EVs will replace ICE vehicles despite recent countervailing narratives. We see vehicle autonomy as one of the highest value-creating technologies to be deployed. Ever. And Tesla, with its razor/ razorblade approach, is a leader in this real-world AI. We think Tesla is Apple on steroids as it focuses on manufacturing and a higher level of vertical integration. Tesla is THE sustainability behemoth, in our opinion.”

Source:

https://twitter.com/x/status/1750372626805993841

When they cut the price target from $267 to $234, the boosting note reads so hypocritical.

 

[Hiline]

I think we have all been there and it stinks. We have faith in the long term but life events have us wanting the run to happen now.
I'm not giving up on 2024. If macros are on our side and the narrative changes for Tesla/EVs . . .we can see a move up.
Often when I expect the stock to go up it goes down . . when I expect it to go down, it goes up. Expectations are low - making it easier for Tesla to beat them.

I do think Tesla has some potential windfalls on the automotive side:

1. Improved demand for Tesla products:
- Appropriate educational advertising that generates demand
- Tesla cars in general proving their quality and longevity at scale
- FSD achieves breakthroughs (and again, v12 in its current state is not it)
2. Improved public perception of Tesla:
- US consumers realizing Chinese EV makers pose a serious threat to US auto manufacturing
- Elon Musk ceasing to say things that make potential buyers hate him and the company
- Other Elon Musk companies achieving breakthroughs, creating a halo effect
3. Accelerated EV adoption:
- Public sentiment on EV, especially in the US, turns more positive
- Cheaper battery technologies making it cheaper to produce EVs
- More EV awareness generated by proliferation of Chinese EVs

Each one of these has a low likelihood of striking in 2024, but we need just one or two of them to happen for the tide to turn.

I don't know enough about the other divisions to comment on their 2024 potential, but given how new and small they are, the likelihood of any of them making a dent in Tesla profitability this year is tiny.

 

[SOULPEDL]

OK, that's it. I'm done buying TSLA for the week, max pain has been achieved.

I'd love to say that I think it's still possible FSD is going to get real with V12 dot something, but I'd only further disappoint many here.

However, in all honesty, I can't even begin to guess when "the numbers get real crazy". Do you?

This down-played part of Tesla has absolutely nothing to do with building cars (where everyone is looking with excessive focus). And then there's all that other stuff none of us have even considered that could come along... out of the blue.

So I'll HODL mostly as usual to make sure other parts of Tesla are not forgotten. Again, I'd like to believe FSD/AI is right under our noses. I need to use it and hope to know sooner than later.

I may still consider a sale as I may have bought too much and then spent a bunch over the holidays (well worth it and would do it again).

Everyone's got their own story, hope it all works out for ya. Hate to see anyone exit early but I would understand.

Cheers!

 

[Stormy24]

"They don't have a crystal ball."

This is key!

didn’t think we would see 190’s again but it’s going that way , time to purchase again. Happy days.

Before I buy more... where's the 190 come from?

I do

a crystal ball I purchased.

 

[Ellec]

Imagine just ignoring everything Tesla except the Q4 results/call each year. Cut out all the noise and check back each January and if things are improving from the prev year you just hold. Two years in a row where things are stagnant or going down then think about selling. This is the mindset you need to have with Tesla it's definitely a long term play which if successful will pay off huge.

 

[unk45]

As I said a few times, soon they will have more cells on hand than what we could imagine, literally, I have no idea where they will put 300+ GWh of just in house production in the near term, make 400, 500 or 600 GWh plus external suppliers if they add lines to Berlin, Shanghai and Mexico

They might hit the 1 TWhr anual cell consumption sooner than latter

If we split that between vehicles and storage, and assume that average pack size trends downs with NGV to 50 kWh, 500 GWh is enough for 10M vehicles

So now it starts to make sense why they are breaking ground on so many lines, needs at least 1 TWh for for vehicles alone for 20M by 2030

Probably we might understate the growth of utility-level and industrial storage.

 

[Buckminster]

 

[mad474]

Good morning dear forum! After 5 hours of restful sleep, I can report that I found yesterday's quarterly report, the outlook - even if (or because?) no firm forecasts were given - and the conference tenor to be very good and encouraging. I was actually expecting a jump in the share price after this month's decline, but ... oh well.

Starting point:
I am a long-term investor. My entire portfolio consists only of TSLA. I started with 150 shares in 2017 and have bought more almost every quarter since then. (Only once, in spring 2022, did I sell a small stock position to pay for a Model 3 LR). Split-adjusted, my lowest purchase price was 15 EUR/share (~17 USD), my highest 280 EUR (~305 USD), my average is around 140 EUR (~153 USD). In the last three weeks I have already bought 130 shares in four tranches, much more than my usual quarterly investment.

Plans:
I currently still have a 3.5% interest-bearing overnight deposit in the bank, which I can use to reach a very nice round total number - my long-planned target amount - of Tesla shares.

Need for decision support:
My finger was already hovering over the buy button more than once this morning. Coming from Swabia, known for its extremely frugal, if not stingy, natives (I'm not one, but I've been conditioned that way), I'd honestly like a little more encouragement.

Many thanks in advance!

 

[cliff harris]

Morning-after thoughts:

• I was glad (as always) to hear people other than elon extensively on the call. Means they aren't afraid to speak up, and that they work as a team.
• Also glad (as an investor) to hear they will be keeping more of their tech secrets under wraps for longer (less AI day stuff).
• 4680 progress sounded very good to me.
• They KEEP emphasizing what a major change the manufacturing process for Gen3 is. This is underappreciated. 'unboxed' is likely just a small part of it. There is something special there they are not talking about.
• They might not be keen, but they still are advertising. Elon has not declared the experiments a failure
• Mention of finally realizing they need to pay attention to markets like Japan.

I do find it weird just how much cash Tesla stockpile, but I suddenly realized one explanation:
If the Gen 3 manufacturing process requires a big upfront bunch of capital, then it all makes sense. Tesla NEEDS a stockpile, and also by starting a price war, they have destroyed the profitability of almost all their competitors, meaning none of them can copy Gen3 if they wanted to.

There is always the possibility of a random stock buyback in the next few months of course. There is also the possibility of some major investment they did not mention. Maybe their plans for V4 superchargers are extreme?

Also:
No mention of bitcoin. Was it sold?
No mention of the lithium refinery.

 

[Atomsla]

I do find it weird just how much cash Tesla stockpile, but I suddenly realized one explanation:
If the Gen 3 manufacturing process requires a big upfront bunch of capital, then it all makes sense. Tesla NEEDS a stockpile, and also by starting a price war, they have destroyed the profitability of almost all their competitors, meaning none of them can copy Gen3 if they wanted to.

It doesnt sound likely to me that they plan to expend more money than they have flowing in in the near future (years). I think they prefer to sit on a large pile of cash just in case *sugar* goes sideways somewhere somehow. War, poor economy, supply challenges, some project not working out as planned, whatever. It is a safe position to be in and one preferred over raising money when the need arises (if you ask me).

 

[FEERSUMENDJIN]

Yeah, probably need L5, or people having the ability to sleep in the car, to create that must have demand. Not many normal people are willing to pay 5 figures on a software they have to babysit. Tesla finds that their adoption rate is in the teens percentage.
The thing is there are very few people who has the software out there telling everyone it's the best purchasing decision they have ever made. The word of mouth on FSD from actual owners are neutral to negative.

Level 3 would greatly accelerate uptake and boost margins, it does not look that far from that.

 

[Cult Member]

I did some pack-size estimates based on the 123 KWh CT pack and some composite factorization for number of cells used. TL;dr is I think the LR Model Y will have a 82 KWh pack and the Gen 3 car will have a 41 KWh pack, all of which are capable of charging on 800v DCFCs like Supercharger v4.

Cheers!

My guess is half of the LFP Model Y RWD pack = 31 kWh
Progress in efficiency, much lower weight, maximum speed 75 mph should result in 200 mi range. Maybe not for an SUV design, but I'm still hoping for something closer to Model 3.

Or is this just me after a late ER night?

Good morning

 

[FEERSUMENDJIN]

No I think they will just get the entire package. Tesla's FSD computer and camera integration. This package with the software is not cheap and hard for legacy to find a way to pass it down to the customers when it potentially can cost 30% of the cost of the car. Then you add on the liabilities these legacy has to deal with as people do have high expectations if they drop 10k on an addon option, it's a hard sell until everyone is talking about how sleeping in their Teslas have changed their life.

My guess is half of the LFP Model Y RWD pack = 31 kWh
Progress in efficiency, much lower weight, maximum speed 75 mph should result in 200 mi range. Maybe not for an SUV design, but I'm still hoping for something closer to Model 3.

Or is this just me after a late ER night?

Good morning

They have pencilled the Gen3 in at 50kw/h in Investor Day presentation. Seem about right to me. Should be smaller, lighter and cheaper than the current SR packs.