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

[Musskiah]

... large commercial projects also almost always work on 'project financing terms' which almost always provide basic cash flow as project advances but the PROFIT MARGIN ALMOST ALWAYS HAPPENS ONLY AT THE END. Cash flow is usually decent, but the P&L is very lumpy.

@unk45 You obviously have experince that offers you enormous insight. When you say "profit margin almost always happens only at the end" and knowing that Tesla Energy has not unwound $4B and counting in unrealized revenues, and that margins were already north of 21% last Q...what type of TE margins do you anticipate in 2024? And in 2025? Do you think Larry Goldberg is dillusional to project 35% margins in the next 12 months and 40%+ margins thereafter. As you say, the only companies to offer a real solution to the 'peaker plant' problem are Tesla and BYD; and as Elon says the next constraint on AI beyond compute is energy, probably beginning next year. This ought to prop up margins for awhile, no? Thank you in advance. @Paracelsus perhaps you could chime in as well

 

[Linkmeup]

Worth a watch - talks about Tesla in China.

https://twitter.com/x/status/1771858094030565756

 

[2daMoon]

Looking forward to a reply from @unk45 on the question of TE margin.

With a declining Lithium price leading to lower materials cost coupled with the economies of scale from an increasing production of the batteries themselves, and for the Megapacks, particularly the economy derived from the coming China Megapactory, 35% doesn't seem so far-fetched.

Considering how at one point there were quite high margins on a much more complex Tesla product line, it makes a kind of sense to think it could be within the realm of perhapsability.

 

[Usain]

Looking forward to a reply from @unk45 on the question of TE margin.

With a declining Lithium price leading to lower materials cost coupled with the economies of scale from an increasing production of the batteries themselves, and for the Megapacks, particularly the economy derived from the coming China Megapactory, 35% doesn't seem so far-fetched.

Considering how at one point there were quite high margins on a much more complex Tesla product line, it makes a kind of sense to think it could be within the realm of perhapsability.

I think the demand for Megapacks is, as Elon said, quasi-infinite.

The thing I wonder is, what is the limiting factor for increasing Megapack production?

Is it just cells? If so, that should be alleviated soon.

 

[2daMoon]

I think the demand for Megapacks is, as Elon said, quasi-infinite.

The thing I wonder is, what is the limiting factor for increasing Megapack production?

Is it just cells? If so, that should be alleviated soon.

Considering how quickly they can bring a Megapactory online, it leaves me thinking they are biding their time to build new ones over a supply issue.

This makes sense if they are waiting for the battery supply to exceed production capacity to the point that it would be justified to open the next one. Imagine how big a Megapactory they could put at GigaTexas, a stone's throw from the cathode and battery factories. (were they to put out product suitable for Megapacks)

Then, it is just a short run to the rail yard, or, truck them straight to a final destination in North America.

Edit: Berlin would have some elbow room too, or Tesla could move into existing commercial space elsewhere in the EU, like they did at Lathrop.

 

[Buckminster]

Now I am nervous! On Facebook it is quite difficult to target well enough to get payback. I hope they'll manage this well.

I dunno, seems like a target rich environment. When you take into account $25k used vehicles and the fact that parents buy on their kids recommendation, who isn't a target?

 

[Usain]

This might be my favorite Dirty Tesla video ever.

Incredible enthusiasm for Cybertruck. Yes, that dude really was so excited he did a back flip.

The other interesting thing is how many people asked what it was and had never even heard of a Cybertruck.

 

[LuckyManX]

That anti-Tesla Super Bowl ad just got the wrong kind of attention from the NTSB | TechCrunch

The National Transportation Safety Board ordered a group to stop using its seal after it appeared in a Super Bowl ad touting a Tesla boycott.

techcrunch.com

I have to wonder if ol' dannyboy will pay a penalty for their unauthorized use of the Official NTSB Seal?

 

[Mengy]

I think the demand for Megapacks is, as Elon said, quasi-infinite.

The thing I wonder is, what is the limiting factor for increasing Megapack production?

Is it just cells? If so, that should be alleviated soon.

Makes me wonder if Tesla is prioritizing Megapack production for 2024 over auto growth. Maybe the "lower than usual" car production growth for 2024 is to allow battery supply to be diverted to the higher margin Megapacks? Boosting a higher margin product's growth over a lower margin product (due to the price cuts) could make the fundamentals look better than most are expecting for 2024.

 

[2daMoon]

I don't know about the rest of y'all,

Tesla diner, drive-in and Supercharger preparing work on interiors

Tesla continues to make progress on its upcoming diner, drive-in theater and Supercharger in Los Angeles, with recent drone footage...

www.teslarati.com

...but I look forward to someday taking a Robotaxi from the airport to this place and grabbing a burger. Just for kicks.

 

[Webeevdrivers]

Any scuttlebutt out there on releasing 12.3 to us poor canucks? Inquiring minds want to know.

 

[unk45]

@unk45 You obviously have experince that offers you enormous insight. When you say "profit margin almost always happens only at the end" and knowing that Tesla Energy has not unwound $4B and counting in unrealized revenues, and that margins were already north of 21% last Q...what type of TE margins do you anticipate in 2024? And in 2025? Do you think Larry Goldberg is dillusional to project 35% margins in the next 12 months and 40%+ margins thereafter. As you say, the only companies to offer a real solution to the 'peaker plant' problem are Tesla and BYD; and as Elon says the next constraint on AI beyond compute is energy, probably beginning next year. This ought to prop up margins for awhile, no? Thank you in advance. @Paracelsus perhaps you could chime in as well

The vastly increasing interest in this subject will bring much, much more supply with innovations constantly from multiple sources. Margins should maintain present levels for some time, but I strongly doubt there will be 40% margins. The impact of reducing materials costs coupled with innovations in battery technology will increase supply, still with huge growth in demand.

Tesla probably could raise margins, but Tesla never has had aspirations for Apple-style margins.

 

[MP3Mike]

Any scuttlebutt out there on releasing 12.3 to us poor canucks? Inquiring minds want to know.

Rumor is that you won't get it. 12.3.1 is starting to roll out. (But not to Canada.)

 

[Knightshade]

Makes me wonder if Tesla is prioritizing Megapack production for 2024 over auto growth. Maybe the "lower than usual" car production growth for 2024 is to allow battery supply to be diverted to the higher margin Megapacks? Boosting a higher margin product's growth over a lower margin product (due to the price cuts) could make the fundamentals look better than most are expecting for 2024.

Lower than usual growth for 2024 is Tesla has largely plateaued on # of buyers for existing models at/near existing prices. Simple as that. Massive auto growth will return when new models that can sell to new bands of buyers appear.

Also aren't the newer megapacks using LFPs different from those used in cars anyway?

 

[ggr]

Any scuttlebutt out there on releasing 12.3 to us poor canucks? Inquiring minds want to know.

Both our FSD cars got the 12.3 update this morning. It seems much better than the 11.xx I had yesterday.
Edit: Oops, missed your mention of "canucks".

 

[Musskiah]

Lower than usual growth for 2024 is Tesla has largely plateaued on # of buyers for existing models at/near existing prices. Simple as that. Massive auto growth will return when new models that can sell to new bands of buyers appear.

Also aren't the newer megapacks using LFPs different from those used in cars anyway?

Megapack 2.0 has been using CATL LFPs since at least 2022, yes. I don't know if they are different

 

[Musskiah]

As others have reported, the wheel nag on 12.3 is incredibly improved, and nearly nonexistent on the highway. It's glorious! The cabin camera does seem to watch your eyes like a hawk though! So you just wear

 

[jschwefel]

Both our FSD cars got the 12.3 update this morning. It seems much better than the 11.xx I had yesterday.
Edit: Oops, missed your mention of "canucks".

Just curious…how long did the download take? Mine has been downloading all day. Says it’s 100%, but the “wheel” keeps spinning. BTW, the car is driveable.

 

[elasalle]

Moderator STERNEST Warning:

Henceforth, I am going to be deleting with absolutely no warning, explanation or PM to posters any entries I find that provide a bare link with zero discussion as to why readers should click on it.

This has been a rule since the very first iteration of this DISCUSSION thread, many millions of views and almost one million posts ago, and violators of it not only are being rude to others, they are being lazy. I cannot abide laziness, and I will not tolerate rudeness.

Sir,
what about links from twitter that are supposed to auto expand?

twitter links used to embed and show content correctly (as long as we use twitter.com and not x.com)... but today it seems it is not working

e.g.

https://twitter.com/x/status/1772043569416847441

 

[MC3OZ]

Makes me wonder if Tesla is prioritizing Megapack production for 2024 over auto growth. Maybe the "lower than usual" car production growth for 2024 is to allow battery supply to be diverted to the higher margin Megapacks? Boosting a higher margin product's growth over a lower margin product (due to the price cuts) could make the fundamentals look better than most are expecting for 2024.

Megapacks are using different cells.

Just thinking about the Cybertruck ramp at Austin there are multiple factors:-

1. Existing Cybertruck line.
2. New CT line to be added in Q3?
3. Currently running 4680 lines.
4. Starting of additional installed lines.
5. New 4680 lines being installed.
6. Battery raw materials, including the Texas lithium refinery.

It is most unlikely that the Texas lithium refinery will produce any lithium in 2024, but Lithium prices are currently low, and sourcing additional supply should not be difficult.

Likewise the Austin Model Y ramp may be constrained by a lack of 2170 cells.

IMO if there were no battery raw materials or cell constraints Tesla would ramp production at Austin ASAP. If that happens in 2025 rather than 2024, it is not a big deal.

What would be good is to fully ramp and optimise all existing production facilities before starting on the Gen3 ramp.

Any delays on Megapack ramps or new factories may also be due to battery raw materials and cells, and sometimes things just take time.