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

[scaesare]

It usually works

Well played sir... well played...

I saw my fat-finger after it was too late to edit...now I'm glad it stayed!

 

[Krugerrand]

Anyone have handy the percentage of Tesla sales adds within China (not export) to Tesla’s bottom line profits? If China’s economy falters and dumps through the rest of 2024 wouldn’t that add more pressure on TSLA and hinder any recovery for the SP anytime soon and even depress it more?

Yes, you’d have to adjust your options.

 

[mongo]

Ok, but we are looking for the critical points where you need the unique machines that can't be easily copied.
They must be something completely new or different in the design of this vehicle. I thought hybrid connectors had a disruptive potential, but maybe that's completely wrong.
What else could it be?

Ahhh...
Well, here is most of the relevant commentary:

Tesla (TSLA) Q4 2023 Earnings Call Transcript | The Motley Fool
Right. So, it's -- it's talking about like tooling lead time, manufacturing. Factory lead time. Yeah, factory lead time and executing those program.

Elon Musk -- Chief Executive Officer and Product Architect There's a lot of -- there's a lot of specialized machines that make the machine for our next-gen vehicle. So, these are not machines you can just order from anyone. They -- actually, you have to design a machine that has never existed to build a car in a way that has never existed.

Unknown speaker Yeah. So, you don't just have, like, a design validation phase, but you have an equipment design validation phase as well.

Elon Musk -- Chief Executive Officer and Product Architect Yeah. It does make it very hard to copy us because you have to copy the machine that makes the machine that makes the machine.

So Tesla is using
preexisting manufacturing infrastructure to create
new manufacturing infrastructure to create
new assembly line machinery to create
new vehicles

Anything purely mechanical can be copied, even tooling to make new mechanical things can be. However, software and, to a lesser extent, custom silicon are not so easily copied. Especially if you ever need to modify it.

The thing that seems to fit best in my mind is next generation robotic assembly equipment.
Machine Line 1: Custom HW (Dojo) and custom SW (data collection and training infrastructure) which creates
Machine 2: The custon software that runs on custom hardware (Optimus prime time) which creates:
Machine 3: The vehicles (and also more robots)

 

[Jim Holder]

Yes, you’d have to adjust your options.

Can you say more?

 

[jamaatta]

Wanna see Lucid of humanoid bots? M'kay, but I'll show it to you anyway. Talking about copying (at mechanical and presentation level, maybe not so much on AI level..?).

I guess Elon wants to keep speed on bot development, things gonna develop superfast. This is a true gold rush.

So here we go, Kepler Humanoid Robot.

 

[Krugerrand]

Can you say more?

I can always say more, but it’s not likely to be relevant.

 

[Drax7]

Look at Sandy Munro's tour of the Tesla CT production line at Giga Texas. Expect more of the same kinds of innovation. Just one example was the steel rolling mill, another was the brass-lined alumimun die press for stamping door 'inners'. You can expect more of the same. This isn't catalog engineering, you can't buy this tooling from existing 3-party suppliers.

Tesla Manufacturing: See how the Cybertruck HFS Panels are Blanked, Bent, and Built! | Munro Live (Dec 19, 2023)

The complexity of these factories boggles my mind

 

[Jim Holder]

I can always say more, but it’s not likely to be relevant.

Haha. I meant I did not understand your response.

 

[AudubonB]

Anticipatorialy reminding all that the following does not permit devolution into political discussion, I read today that Ohio’s leading contender to replace US Senator Sherrod Brown owned a car dealership. That clicked a memory that such a background appears along with lawyers to be one of the more common backgrounds of members of Congress and, I think, even more so at the state level.

I’m not certain of an efficient way to amass reliable data about this but any who know or wish to find out….the weekend remains upon us

 

[Krugerrand]

Haha. I meant I did not understand your response.

I was good naturedly poking you. I will be serious now and you’re probably not going to like it.

The answer to your question is unknowable because it poses a question of an unknowable future full of people and circumstances you have no control over.

I am aware you play TSLA options and as a result try and guess what’s going to happen before it does so you can monetarily profit. I’m not judging you for that as a whole, regardless of my personal feelings about such an action. I point out that in doing so you put yourself in a situation where you no longer live in the present and are always carrying the fear of tomorrow. That takes us down a whole other line of thought and topic that I will skip.

You have no idea what happens to the Chinese economy this year and no way of knowing anymore than you knew exactly how Tesla would navigate the pandemic and come out the other end smelling like the most epically smelling roses. And neither do I nor anyone on this forum.

Obviously, Jim, if the bottom falls out of the Chinese economy this year, it will have an effect on other things. What other things? Everything and nothing.

Why are you asking about the unknowable and expecting an answer you can take to the bank? (That’s a question you answer for yourself, not me or anyone else.)

 

[unk45]

Anticipatorialy reminding all that the following does not permit devolution into political discussion, I read today that Ohio’s leading contender to replace US Senator Sherrod Brown owned a car dealership. That clicked a memory that such a background appears along with lawyers to be one of the more common backgrounds of members of Congress and, I think, even more so at the state level.

I’m not certain of an efficient way to amass reliable data about this but any who know or wish to find out….the weekend remains upon us

This might be even more telling:

https://www.opensecrets.org/industries/contrib?cycle=2024&ind=T2300

Despite the pure political party tilt, perhaps the most important things are the NADA positions and their membership views on issues:
-fuel economy standards: oppose
-BEV specific policies: every one I find they oppose
- auto dealer far lending restrictions: oppose
-State laws prohibiting OEM direct sales: support!
-State laws prohibiting OEM direct customer service: support!
-State laws prohibiting OEM warranty and/or service: support!

It is transparently evident that auto dealers are opposed to anything TSLA, for the vast majority.

 

[scaesare]

Perhaps we should also be thinking of Dojo as the entire compute side of solving autonomy and AI, rather than as only a specific subset of hardware within that greater scope. Though his comment about a "long shot" was likely directed at the Tesla Dojo processor, specifically.

Maybe Tesla's Dojo processor, along with Nvidia, and AMD processors are being used to make up the Dojo Project much the same way the Booster and the second stage, which is named Starship, together make up the whole "Starship" for SpaceX.

Elon has always been ready to shift to any alternative that does the job more efficiently, or, to source similar but different resources for the same end result (i.e.: a variety of batteries). It seems more and more like the semantics might have shifted to encompass the entire project as Dojo.

Anyone else get that vibe?

Agree. Also think that the continual improvement we see for cars, robots, and rockets will apply here as well... given Moore's law and the pace of semiconductor advancement, I'd imagine that Dojo capability will have advanced a couple of times by the time it sees large-scale implementation.

 

[scaesare]

Considering how bad Tesla kept the truth from me (and all of you), and then ignored their across the board failure I think I am better than I should be. I could have just ignored the truth and been a happy lil fanboy.

"Kept the truth from you"?

How so?

 

[scaesare]

Look at Sandy Munro's tour of the Tesla CT production line at Giga Texas. Expect more of the same kinds of innovation. Just one example was the steel rolling mill, another was the brass-lined alumimun die press for stamping door 'inners'. You can expect more of the same. This isn't catalog engineering, you can't buy this tooling from existing 3-party suppliers.

Tesla Manufacturing: See how the Cybertruck HFS Panels are Blanked, Bent, and Built! | Munro Live (Dec 19, 2023)

Agreed. The air-cushioned bending brake to avoid marring the steel surface was pretty significant innovation as well.

Elon has stated that moats are lame (in terms of patents), and that its relentless innovation that ensures a company's survival. We are seeing it both in product and production.

 

[SOULPEDL]

Wanna see Lucid of humanoid bots? M'kay, but I'll show it to you anyway. Talking about copying (at mechanical and presentation level, maybe not so much on AI level..?).

I guess Elon wants to keep speed on bot development, things gonna develop superfast. This is a true gold rush.

So here we go, Kepler Humanoid Robot.

It's pretty hard to tell, but I think a lot of this video is CAD sourced/generated.

When you look at the actual product (prototype) at CES, it's hanging and looking like something off a movie set.
Their copying Tesla on so many levels makes this even more suspect. How could they possibly be exactly at the same level of robotics, nothing more... nothing less? I'm calling BS here.

 

[Jim Holder]

I was good naturedly poking you. I will be serious now and you’re probably not going to like it.

The answer to your question is unknowable because it poses a question of an unknowable future full of people and circumstances you have no control over.

I am aware you play TSLA options and as a result try and guess what’s going to happen before it does so you can monetarily profit. I’m not judging you for that as a whole, regardless of my personal feelings about such an action. I point out that in doing so you put yourself in a situation where you no longer live in the present and are always carrying the fear of tomorrow. That takes us down a whole other line of thought and topic that I will skip.

You have no idea what happens to the Chinese economy this year and no way of knowing anymore than you knew exactly how Tesla would navigate the pandemic and come out the other end smelling like the most epically smelling roses. And neither do I nor anyone on this forum.

Obviously, Jim, if the bottom falls out of the Chinese economy this year, it will have an effect on other things. What other things? Everything and nothing.

Why are you asking about the unknowable and expecting an answer you can take to the bank? (That’s a question you answer for yourself, not me or anyone else.)

Fair point!

I was just looking for numbers of what local China sales adds to EPS so I can model various scenarios and was curious if anyone else already did that.

 

[Discoducky]

The IRA credits are buried in Cost of Goods Sold (a reduction in costs).
Here is an excerpt from the Q3 10Q:
View attachment 1011911

Gotcha, with the POS discount in Q1, we should see a COGS go down by $7500 for every contributing sale and if this is a high % could push COGS below $30k

 

[scaesare]

This may be the single most relevant post from @Krugerrand is a long time!
By now all of us should be familiar with Elon's absolute candor. "high risk, high reward" has been his mantra since before either Tesla or SpaceX existed. Back before zip2 became that Elon had an acute sensitivity to cash flow "Don’t spend more than you are sure you have.” (that quotation was in several contemporaneous sources in the mid-1990's).
Seriously, look at the beginning;

This is What Elon Musk's First Website (Zip2) Looked Like

A timeline showing Elon Musk's first website (Zip2) and its evolutions over the years, starting from 1996 and ending in 2004.

loopinput.com

While that was happening I was working in the LA area as a consultant to a large auto company, in late 1996 the zip2 "Auto Guide" appeared. In a semi-unbelievable coincidence Anderson Chevrolet in Meno Park was one of the first users. After it closed in around 2005 the site became the first Tesla factory. (OK, wildly offf topic, perhaps, but the very early Musk frugality and ingenuity did use physical calls to local businesses to upsell from simple Yellow Pages to something that actually sent customers.

Obviously that was a tiny effort, but it did end out funding later efforts. Always Elon has favored high reward ides and have been willing to accept high risk if hard work, determination, better engineering could overcome impossible odds.

The very things that have made many of us much more financially successful are the ones that many of us now denigrate, because they do not happen as quickly as we expect.

Elon really has not changed so very much. Retail and institutional investors have changed. Now, with SpaceX and Tesla as giant successes with repeated technological breakthroughs, we forget how we arrived in this excellent place.

When we remember how all this happened we might also remember that the magic is still continuing, albeit with giant spotlights in idiosyncratic behavior. It's not really the behavior that has changed but our perception of just how exceptional our investments really are.

Pay attention to @Krugerrand when he simply reminds us of what we all should already know.

Yup. Elon often uses the phrase that "success is in the set of possible outcomes" but will many times caveat with (low) chances of success. And because it's possible they will succeed, even if unlikely, some things are worth attempting...

 

[2daMoon]

Yup. Elon often uses the phrase that "success is in the set of possible outcomes" but will many times caveat with (low) chances of success. And because it's possible they will succeed, even if unlikely, some things are worth attempting...

Elon's logical, brutal honesty is often misread by those who live in a world where everybody blows sunshine up their backside while not delivering on the promises.

History has shown Elon doesn't take on a challenge he doesn't think he can win, and will tilt straight toward a goal despite a low chance of success being one possibility in the cards.

Elon talks about the chance of failure openly, and simultaneously takes action to achieve a goal despite that. He doesn't waste words trying to talk everybody into also believing in his plan before moving toward accomplishing it.

Going on about the odds of success is just doing more talking while action is required to get there.

Letting everyone know you do realize it is a long shot, and that you plan to try anyway, is inspirational.

 

[SAPharmD]

"Kept the truth from you"?

How so?

Maybe he played "options", and it didn't end well...