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

[2daMoon]

View attachment 1028824

Upside-down just means that the car loan balance remaining is higher than the worth of equity in the car. (i.e.: Trade-in value)

This is a natural consequence of the car being recently purchased and not enough payments have been made to reach that point where the car is worth more than the remaining loan balance.

Add to this the tactic of many dealers to take an upside-down trade on a car purchase, then, add more to the new car loan to compensate. Thus increasing the payment size and/or duration of being upside-down on the latest sale.

Being upside-down is only an issue for someone trading in a car that they haven't owned very long. The initial depreciation of a new car is significant and it often takes a person paying nearly halfway through the loan period (or more) to overcome this.

This statistic reflects more negatively upon the stealerships arranging such loans and encouraging buyers to trade early than it does on the auto market as a whole.

Glad I've never participated in the entitlement game where folks think they have to have something new to feel better about themselves, regardless of it being a poor financial decision.

This is a nothing-burger. Would you like fries with that, CarDealershipGuy?

 

[SO16]

The Covid prices are skewing the situation. I suspect in a few years, things will hopefully normalize.

 

[Musskiah]

The new India proposal: capped at 8k EV units per year with a sale price of over $35k eligable for reduced 15% import tariffs. It gives Tesla several years to then ramp a Model 2 gigafactory.

In big win for Elon Musk’s Tesla, India to lower EV import tax if $500 million invested

The policy is a big win for Tesla as it's in line with what the company had been lobbying for in New Delhi. Sources said last July that the carmaker had offered to build a factory but, in the meantime, wanted a cut in import taxes that CEO Elon Musk said were among the highest in the world.

www.google.com

 

[Knightshade]

Being upside-down is only an issue for someone trading in a car that they haven't owned very long.

or one whose car is totaled and they didn't buy gap insurance (or some equivalent insurance product)

 

[Singuy]

Almost every FSD release I can remember has had mixed reviews. Is anyone not having a good experience with 12.3?

Chuck said he has a few folks on discord who felt V12 was a regression. This could just be them needing a reset of the MCU. There were times when after a new software update, the system goes crazy. I have experienced this myself where it would hard brake at every intersection and wheel jerk like a maniac. After two weeks I finally decided that maybe resetting the MCU would help and sure enough it brought it back to life.

As for additional reception, FSD V12.3 is very positive on FB FSD software group, which usually has folks trashing the software for the most part.

 

[CorneliusXX]

The Covid prices are skewing the situation. I suspect in a few years, things will hopefully normalize.

Bit of a perfect storm for people who bought their vehicles during Covid

• New vehicle price was high and has dropped considerably since = pushing down prices of used vehicles
• EV incentives = further reducing price differential of used vehicles compared to new
• Higher interest rates = less affordable purchase of used vehicles
• RVs set at time of purchase and don't move with prevailing prices

Agree it will wash through as the loans roll off, but there is a good chance the value of the Y I purchased in 2022 will not match the RV at the end of my 5 year loan unless interest rates fall dramatically, FSD arrives, or there are other supply constraints in the market.

 

[Tony73]

Very encouraging!

https://twitter.com/x/status/1769119083646030115

https://twitter.com/x/status/1769120817256825085

We may be approaching the moment when FSD becomes a sales driver.

 

[Singuy]

We may be approaching the moment when FSD becomes a sales driver.

The biggest sales driver other than price is making FSD transferable(even for just 1x time). Tesla is already doing this which should result in an uptick in sales if they keep the promotion going.

 

[NicoV]

I just noticed that my Model S uploaded 60GB of data this month, with 40GB just this week. Clips for EU training?

One week later, another 30GB uploaded.My Model 3 only uploaded 2GB in he last month.

 

[replicant]

Almost every FSD release I can remember has had mixed reviews. Is anyone not having a good experience with 12.3?

 

[heltok]

https://twitter.com/x/status/1769257128756380003

 

[Buckminster]

https://twitter.com/x/status/1769288904832905590

 

[replicant]

https://twitter.com/x/status/1769288904832905590

View attachment 1028868

I'm worried. Tesla cannot achieve its mission this way. And we're losing time, critical time.

Can't wait for the update, because we need many many more plants.

 

[unk45]

Upside-down just means that the car loan balance remaining is higher than the worth of equity in the car. (i.e.: Trade-in value)

This is a natural consequence of the car being recently purchased and not enough payments have been made to reach that point where the car is worth more than the remaining loan balance.

Add to this the tactic of many dealers to take an upside-down trade on a car purchase, then, add more to the new car loan to compensate. Thus increasing the payment size and/or duration of being upside-down on the latest sale.

Being upside-down is only an issue for someone trading in a car that they haven't owned very long. The initial depreciation of a new car is significant and it often takes a person paying nearly halfway through the loan period (or more) to overcome this.

This statistic reflects more negatively upon the stealerships arranging such loans and encouraging buyers to trade early than it does on the auto market as a whole.

Glad I've never participated in the entitlement game where folks think they have to have something new to feel better about themselves, regardless of it being a poor financial decision.

This is a nothing-burger. Would you like fries with that, CarDealershipGuy?

It’s more about high Loan to Value than dealers. The typical US new cars has 10% or so in taxes and licensing. Both vary tremendously by jurisdiction.Other fees from order, delivery, preparation add 5% or more. Dealer margin adds 5-10% depending on model. Then options from wheels, color and interior add close to nothing to asset value but make loans larger. Add all these, even for Tesla, then add dealer promotions and ‘spiffs’.

All this makes nearly all cars lose ~20% simply by registering a title change.

That is reality. The ONLY exception happens when demand is so high that used cars sell:more than new ones. That does happen, but very rare. For Tesla it did so briefly and rarely but happened.

 

[DragonWatch]

Forward Observing

I believe God insisted playing a joke on life in general when he hatched me. I/we (my wife, partner, friend, counter weight, etc) are now older than dirt ~ soon (time is relative) to be dirt. I have always been at the end of the line ~ first letter of my last name, height challenged, back of the class and so on. Dragons Flight is not even a week old and we still do not have v12 yet. Xena II had V11.1 and since we saved 12K by transferring our FSD ~ pay back is a mother; we still have the old FSD

Xena II (MX) was five years old and had lidar, new at the time. Dragons Flight is being tested. I constantly am being tested. While my non~X gives me lectures on speed and Dragons Flight achieves it effortlessly ~ I am confused. No matter how fast we travel; it is as if we are driving in slow motion ~ the weirdest sensation; other than my girl giving me lectures. Having all cameras and V11.1 the FSD experience is significantly better ~ so my point is that the hardware is just as important as the software and people who haven’t driven a Tesla will never understand.

Cheers,
Dragons Flight

 

[jerry33]

The new India proposal: capped at 8k EV units per year with a sale price of over $35k eligable for reduced 15% import tariffs. It gives Tesla several years to then ramp a Model 2 gigafactory.

In big win for Elon Musk’s Tesla, India to lower EV import tax if $500 million invested

The policy is a big win for Tesla as it's in line with what the company had been lobbying for in New Delhi. Sources said last July that the carmaker had offered to build a factory but, in the meantime, wanted a cut in import taxes that CEO Elon Musk said were among the highest in the world.

www.google.com

Not exactly. As I read it, in three years 25% must be Indian content, and only 8,000 low priced cars per year allowed at low duty. This means that when the ramp just starts 25% must be Indian content, and virtually no income from imports. Hard to do with no BEV supply chain in India and very low car volume. I'm not saying Tesla can't pull it off, but it's going to be very hard. This was clearly written to discourage foreign investors.

 

[DarkandStormy]

Sorry I missed a word in my previous post. That is, “down”. If price is the same, I.e, $163, and forward PE is up from 34 to 50, does that mean analysts are expecting Tesla earnings are going down, despite of growing revenue?

Revenue is not earnings.

2023 earnings were less than 2022 if you back out the $5.9bn one-time tax adjustment. Most forecasts call for flat to even declining earnings from 2023.

The average FY2024 earnings estimate is ~$3/share.

 

[Musskiah]

Not exactly. As I read it, in three years 25% must be Indian content, and only 8,000 low priced cars per year allowed at low duty. This means that when the ramp just starts 25% must be Indian content, and virtually no income from imports. Hard to do with no BEV supply chain in India and very low car volume. I'm not saying Tesla can't pull it off, but it's going to be very hard. This was clearly written to discourage foreign investors.

Further elaboration from Electrek...

The “scheme” allow EV manufacturers access lower 15% import duties on EVs valued “$35,000 USD or above for a total period of 5 years”, but they are 3 main requirements for companies to take advantage of deal

-They need to make a minimum investment of Rs 4150 Cr (~$500 million USD)
-Set up an EV manufacturing facility in India within 3 years with a localization level of 25% by the 3rd year and 50% by the 5th year
-Automakers taking advantage of this deal are limited to 40,000 total imported EVs at lower tarifs and no more than 8,000 units per years

SOURCE: India opens the doors to Tesla with new scheme to wave EV import duties

 

[Cattledog]

Not exactly. As I read it, in three years 25% must be Indian content, and only 8,000 low priced cars per year allowed at low duty. This means that when the ramp just starts 25% must be Indian content, and virtually no income from imports. Hard to do with no BEV supply chain in India and very low car volume. I'm not saying Tesla can't pull it off, but it's going to be very hard. This was clearly written to discourage foreign investors.

25% by $ or #? Maybe they start producing batteries and megapacks together with car packs as the first part of the factory. If it's what Tesla has been lobbying for then they likely have:
1. A roadmap to get there
2. Expect other manufacturers do not

 

[mongo]

Further elaboration from Electrek...

The “scheme” allow EV manufacturers access lower 15% import duties on EVs valued “$35,000 USD or above for a total period of 5 years”, but they are 3 main requirements for companies to take advantage of deal

-They need to make a minimum investment of Rs 4150 Cr (~$500 million USD)
-Set up an EV manufacturing facility in India within 3 years with a localization level of 25% by the 3rd year and 50% by the 5th year
-Automakers taking advantage of this deal are limited to 40,000 total imported EVs at lower tarifs and no more than 8,000 units per years

SOURCE: India opens the doors to Tesla with new scheme to wave EV import duties

FWIW, the word "scheme" as used across the pond does not carry the negative connotations associated with it in the US. It's more synonymous with "plan" or "system".