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

[Webeevdrivers]

He said stalk not stock. He means she might have not hit reverse instead of forward if using a stalk instead of the center screen to choose gears.

I won't add an opinion to that but the last few posts going off on a tangent on your confusion of the word stalk seemed to need a clarification.

My bad. And my bad spelling. I understood it as stalk. I’d like to blame spell check…but…well…no.

 

[y_naught]

Sorry if this is the wrong place. But, so sad!

Angela Chao drowned after fatal mistake in her Tesla, called for help

Angela Chao, 50, a billionaire shipping industry CEO, tragically drowned in a pond at her Texas ranch after accidentally putting her Tesla in reverse.

www.dailymail.co.uk

Granted it was a series of unfortunate circumstances, but can’t help but wonder if the stalk should come back!

I read this article this morning. I found it overall very strange and could not figure out the overall point or why it needed to be written in the first place. Marginally interesting but that is all. Not really relevant to anything.

 

[2daMoon]

Yes. Unfortunately, most people don't know that.

Yes.

Most people won't take the time to learn. Most people don't have good situational awareness skills, nor are they likely to prepare in advance to handle an emergency in their car.

There is little that can be done for those situations where there are safety measures and the person didn't familiarize themselves with them beforehand. Well, other than full autonomy taking the responsibility for a person's safety away from them for their own good.

This has now gone full circle back to RTFM.

People, are a problem.

Sad things will continue to happen to them, often because they didn't feel compelled to prepare themselves with the knowledge crucial for them to handle such a situation. I will avoid using the adage of leading a horse to water...

 

[Linkmeup]

I read this article this morning. I fo7 d it overall very strange and could not figure out the overall point or why it needed to be written in the first place. Marginally interesting but that is all. Not really relevant to anything.

It was first reported by the Wall Street Journal yesterday...a month after it happened. I did some due diligence and found this:

https://twitter.com/x/status/1764410994665607616

Tbh, I don't feel comfortable talking about this topic much like many other similar scenarios that's transpired around Tesla over the last decade...whether its in regards to a Tesla employee or their family, and/or a Tesla customer and their family. So, this'll be my only post on this. Hope it's helpful.

 

[SmokyPeat]

It was first reported by the Wall Street Journal yesterday...a month after it happened. I did some due diligence and found this:

https://twitter.com/x/status/1764410994665607616

Tbh, I don't feel comfortable talking about this topic much like many other similar scenarios that's transpired around Tesla over the last decade...whether its in regards to a Tesla employee or their family, and/or a Tesla customer and their family. So, this'll be my only post on this. Hope it's helpful.

Conspiracy theorists will always have their unhinged takes on just about everything.

 

[AZRI11]

Sorry if this is the wrong place. But, so sad!

Angela Chao drowned after fatal mistake in her Tesla, called for help

Angela Chao, 50, a billionaire shipping industry CEO, tragically drowned in a pond at her Texas ranch after accidentally putting her Tesla in reverse.

www.dailymail.co.uk

Granted it was a series of unfortunate circumstances, but can’t help but wonder if the stalk should come back!

It was a 2020 Model X. Only manufactured with stalks.

 

[Thekiwi]

I read this article this morning. I found it overall very strange and could not figure out the overall point or why it needed to be written in the first place. Marginally interesting but that is all. Not really relevant to anything.

The victim was a billionaire with high level political connections in both USA & China, and died in a rather weird single car incident in one of the world’s safest cars. The details of her death are definitely newsworthy.

Not mentioned, but she did this after a day of celebrating with friends (food & drink) - so it’s entirely possible there was alcohol involved.

 

[hobbes]

Working three shifts on the weekend to repair power supply to Giga Berlin:

+++ Saturday, March 9, 18:55 Construction progress in Steinfurt - new high-voltage gantries installed +++
The construction of high-voltage technology is progressing in Steinfurt. Thanks to a 3-shift system, two impressive portals have now been completed. Both are load-bearing components for the connection between the underground cable system and the overhead line system braced to the pylon. They consist of massive foundations and elaborate steel lattice structures, which were assembled on site by hand by specialized technicians.
In addition to the extensive assembly work, the civil engineering work has now also been completed. Due to the damp ground conditions, however, water is penetrating the construction site. This is being counteracted by a permanent drainage system. The police are on site with team cars and emergency vehicles and regularly patrol the site.

Translated with DeepL.com (free version)

Tesla in Grünheide: Nach Anschlag - alle aktuellen Entwicklungen im Newsblog

Nach dem Anschlag auf die Stromversorgung der Tesla Gigafactory in Grünheide stand die Produktion für Tage still. Jetzt gibt es wieder Strom. Alle Entwicklungen zum Nachlesen gibt es hier.

www.moz.de

 

[hobbes]

Rohan woke up on the weekend and chose violence

https://twitter.com/x/status/1766455112543731786

https://twitter.com/x/status/1766457529226121248

Violence???

 

[Puma2020]

FSD is the same for all vehicles- it's the same software/hardware stack - how can it be different?

FSD is NOT the same for all vehicles. Tesla has said that the CT, for example, has a different stack due to the different camera positions.

 

[Ridgeline]

Sorry if this is the wrong place. But, so sad!

Angela Chao drowned after fatal mistake in her Tesla, called for help

Angela Chao, 50, a billionaire shipping industry CEO, tragically drowned in a pond at her Texas ranch after accidentally putting her Tesla in reverse.

www.dailymail.co.uk

Granted it was a series of unfortunate circumstances, but can’t help but wonder if the stalk should come back!

I and most of my social circle have multiple graduate degrees and work as scientists in the biological sciences. I've owned the stock for 6+ years and will hold most of it for the longterm, despite Elon, because the mission related to climate change is paramount. Two of my friends that I convinced to buy model Y's enjoy the car but have removed all tesla badging from it & the only time Elon comes up in discussions now is as the butt of jokes. None of the other people I've talked to & hoped to convince regarding purchasing a tesla the last several years will even consider it because they don't want to be associated with the brand. It's sad to see on multiple fronts

 

[Ridgeline]

ClimateOptimist, I dont consider my self as climate activist but I will say that the shipping and processing of crude oil into gasoline is dangerous and unhealthy. Consider all the crude oil drilling, transportation accidents and the refinery accidents that have killed people and harmed people's health.

 

[Snerruc]

FSD is the same for all vehicles- it's the same software/hardware stack - how can it be different?. The difference is how the driver over time learns to live with it .. cheers!!

Sorry to disagree with unk, but I have had versions that were totally unusable. Tesla tried to fix and failed. On the micro level, cars are different, and that appears to be important. Check the FSD threads. My best guess is that mine may be windshield related, but just a doofus guess.

 

[unk45]

Sorry to disagree with unk, but I have had versions that were totally unusable. Tesla tried to fix and failed. On the micro level, cars are different, and that appears to be important. Check the FSD threads. My best guess is that mine may be windshield related, but just a doofus guess.

What did you disagree with that I said. From time to time over the years I have posted regarding my own experiences, some positive, some not so. In my most recent post I was postulating ( without direct knowledge) that stacks might vary depending on camera type and position, FSD chip version and other factors.

I made no comment at all about version effectiveness. If I had I could not directly comment on FSD 12 versions since I have my most recent experience with versions of FSD 11, which have quite distinct flaws for both Model S Plaid and Model Y LR the only two I have recently driven.

So, what did I say incorrectly? I’m asking only for clarification, not disputing that I might have been in error. After all, I admit to imperfection…not least a tremendous facility for typo insertion!

 

[Zaddy Daddy]

Wouldn't "demand" be as much a function of how many of the used EVs have sold as it would be based on this change in price?

Over the same period, does the amount of time a Tesla sits on the lot waiting for a buyer grow, decline, or remain constant as the prices are reduced?

If the sales of used Tesla vehicles were static or increasing how would this affect a demand problem theory?

How does Tesla used car sales compare to other ICE and EV used car sales over the same period?

Is the percentage of Tesla used sales increasing or decreasing compared to others?

Could there be macro factors unaccounted for that have influenced this quick assertion of there being a demand issue for Tesla?

Was this tool used in formulating your assessment?

Cup half full....or half empty.
People see what they want.

Some are consistent in "finding" evidence to support their viewpoint.

I’m not sure there is a drop in demand. It’s just that the initial market has been filled. It’s conquest sales now- a different market from the early adopter market. The demand for cars is there, however Tesla has to compete for customers with different priorities. Tesla has some weakness in that market, including number of fueling stations in some areas, distrust of new technologies, resistance to brand change, etc. Reducing price is the easiest way to overcome some of these, but it is harder slogging from now on.

It is relevant to understand that there are many factors other than nominal purchase prive that influenvleo buying behavior and new vs used. There is a notion commonly held that price is the primary factor in elasticity of demand. That assumption is false. Affordability is, absolutely, a key definition for Total Addressable Market (TAM).Within TAM there is a vast array of factors, some related to initial price, some related to expectation of operating economy, so having nothing to do with any definition of cost.

Oversimplifying these factors drives otherwise intelligent people into price competition. That drives once-premium brands such as, say, Ralph Lauren to lose the luxury market.

A brand can have multiple price and position differences for essentially identical core products. Chevrolet Suburban/Cadillac Escalade is prototypical. Tesla can and should continue category diversification.The new French Model Y delivery van vs Model Y Performance is beginning to explore wider choices. These are entirely different than range choices.

As Tesla expand such options wider choices that preserve high margins but deliver significant buyer value will become more prevalent. The China-only Long Wheelbase Model 3 is another example of a market segment Mercedes Benz once owned in Lebanon/Syria/Egypt etc. as well as China, for chauffeur-driven and intercity taxi markets. Proliferation of such segment-specific variants can enable Tesla to rapidly expand specific segments, replicating global appeal of, for example, Toyota Corolla, luxury to econobox to pocket rocket all on the same platform.

Such approaches enable higher margins and Word of Mouth to expand markets without wasting promotional reserves. Tesla has been moving in this direction, almost invisible outside the target markets.

Really the future is not so bleak as many suggest, nearly always by people who are unaware of automotive markets, energy utility markets, stationary storage commercially, much less manufacturing and logistics, essentially zero about implications of direct vs dealer sales.

When reviewing the entire Tesla business model vsnthatnif any given competitor almost any competent financial analyst can understand what approach yields superior free cash flow. By definition, such an analyst can look far beyond a GAAP P&L.

No question that this sort of work is irrelevant to speculators who flitter about generating outsized profits for market intermediaries, and reduced carrying costs for investors ready to lend shares to those speculators.

I know people are triggered by any comment on "demand issues" as it brings up memories of historically inaccurate claims, so fine let's ignore that wording. It's not really needed anyway in valuation.

Valuation is about how much money I expect the auto business to generate in the coming years. The graph I presented is an indicator that there will continue to be compressed margins in the near future. Some of the arguments why actually support that perhaps margins will not rebound as strongly as some would hope in the coming years.

Currently Tesla's operating margin is 8%. If there isn't actully any "demand issues" that could then rebound the other way, really the only boost to automotive operating margin is likely interest rate induced, which could add another % or 2% at most. Let's say Tesla can return to achieve 10% operating margin on auto.

On 5 million cars annually at ASP of $32,500, Tesla will generate 16.25 billion in net income. At a PE ratio of 50 (very generous) that would value the company at 825 billion at that time (not discounting back to present day). Likely PE ratio applied to automotive at that time will be less because the growth phase will be slowing down. At a PE ratio of 40, that would value the company at 660 billion.

Current market cap is 550 billion. So the market is valuing a lot of future automotive profit growth already into the valuation of the company.

So, I don't see the market revaluing the company much higher on automotive unless something fundamentally changes about future expectations of operating margin. If there isn't any demand issue, then that leaves less room for there to be any improvement due to demand improvement.

The next-gen vehicle will certainly lower COGs along with ASPs, but do we expect it to really have the highest margins out of the lineup? Unlikely.

So again, my read is the automotive growth is already mostly built into the company valuation.

The only things that can remodel the company signficantly higher are robotaxis and optimus. Those revaluations aren't coming for years.

All the little things, insurance, charging revenue, etc...those are nice but are peanuts. The largest of the them (Energy), could add 100 billion to value at most, the rest are even smaller. These are nice things that will help Tesla sustain a valuation much higher than other auto companies, but they are only adding 10-20% upside from here.

Expect the stock to oscillate until some of its AI becomes a real product.

 

[2daMoon]

I know people are triggered by any comment on "demand issues" as it brings up memories of historically inaccurate claims, so fine let's ignore that wording. It's not really needed anyway in valuation.

Valuation is about how much money I expect the auto business to generate in the coming years. The graph I presented is an indicator that there will continue to be compressed margins in the near future. Some of the arguments why actually support that perhaps margins will not rebound as strongly as some would hope in the coming years.

So, your pretzel logic comes back around to confirm what was laid out in the Master Plan so very many years ago.

TESLA WILL CONTINUE TO REDUCE PRICES AS IT INCREASES PRODUCTION​

Why do you think this is a bad thing?

Is it because you are so accustomed to evaluating the other OEMs (or stocks in general) using a metric that does not apply to a company whose goal is to drive prices down in order to accelerate the transition to sustainable energy, rather than to increase profit margins?

Tesla has explained this in print over a decade ago, has steadfastly followed that path, and will continue to do so while growing the business.

Prices going down in both the New and Used sectors will get more EVs into the hands of ICE owners. That is the goal.

This goal may not fit well with investors wanting to make a quick buck over shorter time periods. Those who don't mind waiting, and who are enthusiastic about the mission, have been and will continue to be rewarded.

 

[Drax7]

The victim was a billionaire with high level political connections in both USA & China, and died in a rather weird single car incident in one of the world’s safest cars. The details of her death are definitely newsworthy.

Not mentioned, but she did this after a day of celebrating with friends (food & drink) - so it’s entirely possible there was alcohol involved.

She died in a car accident, why mention Tesla. If it were a Bronco ,
The car make would not have been mentioned.

 

[Zaddy Daddy]

So, your pretzel logic comes back around to confirm what was laid out in the Master Plan so very many years ago.

TESLA WILL CONTINUE TO REDUCE PRICES AS IT INCREASES PRODUCTION​

Why do you think this is a bad thing?

Is it because you are so accustomed to evaluating the other OEMs (or stocks in general) using a metric that does not apply to a company whose goal is to drive prices down in order to accelerate the transition to sustainable energy, rather than to increase profit margins?

Tesla has explained this in print over a decade ago, has steadfastly followed that path, and will continue to do so while growing the business.

Prices going down in both the New and Used sectors will get more EVs into the hands of ICE owners. That is the goal.

This goal may not fit well with investors wanting to make a quick buck over shorter time periods. Those who don't mind waiting, and who are enthusiastic about the mission, will be rewarded.

I'm not emotionally tied to it one way or another. I'm looking at whether it makes to invest at this current valuation.

Just because it's their plan, doesn't mean its going to make the market cap go higher.

I don't know why you mention other OEMs, if we were evaluating Tesla's automotive financials in a similar light to other OEMs, the share price would be like $50. Do you think other OEMs have PE ratios of 60? No, they're like 10.

Yes, Tesla's strategy will bring them a large market share in the future. No one is arguing against that?

I'm addressing what the future valuation could look like. You are not talking about that at all.

 

[cliff harris]

The only things that can remodel the company signficantly higher are robotaxis and optimus. Those revaluations aren't coming for years.

All the little things, insurance, charging revenue, etc...those are nice but are peanuts.

I think this is a bit pessimistic. Before I joined the Tesla club, I drove a lexus. Lexus got some small annual sum from me for servicing the car, but basically after they sold me it, we parted ways.
With a Tesla, I pay monthly for 'premium connectivity', and also pay to use Tesla's supercharger network. What's the profit margin on those? I don't know, but I do know that its laughably lower than petrol/diesel, and I'd still keep the car even if the supercharger cost trebled. I think its good for the brand that Tesla keeps charging profits low, but there is massive scope to increase them.
Do I use more than the cost of my 'premium connectivity' in bandwidth? I sincerely doubt it. I think Tesla's margin on that is pretty high, and will continue for years, month in, month out.

These were good enough, but now there are FSD subscriptions. No more cash from me as I bought it outright, but others will subscribe. Not only that but staggeringly, supercharger revenue is coming now from people who do not even own a Tesla (yet).

Tesla do not AFAIK offer insurance here, but I will definitely get a quote when they do. If I didn't already have solar+battery I'd be looking to Tesla to supply that too. Why not? keep it all in one bill, one company to deal with.

Forget robotaxis for now. The nanosecond that its legal to use FSD while drunk here, trust me that sales and subscriptions will go nuts. And even forgetting that, the amount of sales to people who drive long distance for work will be massive.

And to add to that... The competition (rivian/ford/gm/lucid/vw/toyota) are all floundering. The more they flounder, the more scope for Tesla to keep margins high, or even higher. Lower interest rates will kick it higher still. Oh and the UK certainly doesn't have an 'inflation reduction act' yet. As soon as serious climate catastrophe kicks in and governments go nuts trying to force EV adoption, things will get wild. We will swap this year from a pro-fossil fuels govt to a pro-renewables one.

TL;DR: Tesla's SP has plenty of scope to nudge much higher way before a single optimus or robotaxi is sold.

 

[cliff harris]

Do you think other OEMs have PE ratios of 60? No, they're like 10.

Because those companies are doomed and the bean counters can see it. 10 is not a normal PE ratio. Its the PE ratio of a company heading to the graveyard.