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

[Usain]

What constitutes volume production?

According to Elon, volume production is 5,000 per week.

 

[Discoducky]

Could you expand on this? Are you saying Dojo will push Tesla to try to influence how TSMC designs and builds their next fabrication plant?

Yes, when you have a highly custom chip that has high run rates with a multi-year contract, there is a high likelihood you'll find efficiencies that require changes to fab line machines and processes for future chips. Usually that involves new IP and usually that IP stays with the 1st party (think nVidia holding IP vs TSMC) for an exclusive period of time then the fab can implement/license that IP or just buy it outright.

 

[scaesare]

When general advertising happens, if it does, it is a signal that the deep dedication to cost effectiveness, efficiency and waste avoidance has ended.

I''ve stayed out of th advertising discussion thus far, but I'm not sure I see these as mutually exclusive.

 

[Mengy]

Some googling suggest Tesla sold 650k cars in the US in 2023. Some people guess FSD take rate is 19%. I am assuming that even given no more progress, FSD V12 doubles that over time.
so 123,500 extra FSD purchases per year, for revenue (its $12k now right?) of $1.48 billion a year. The marginal cost of sales here is virtually zero.
Thats almost exactly 10% of profit for 2023. That assumes FSD is never improved outside the US.
Given demand for FSD in Europe, China etc, I think 2025 is going to be the year we really see FSD hit the financials in a notable way. Luckily between now and then we have growth in profits from energy, and also the cybertruck and semi ramp.

Of course if FSD 13 comes along and is genuinely end-to-end no intervention for 99.999% of drives, then all bets are off and its robotaxi time, but WAY before that I expect FSD to become a huge driver of sales for people cross-shopping between EV brands.

This is why I think Elon is willing to cut margins on the cars to scary low levels. While everyone is worried about Tesla's car margins this year hurting profitability (and it will), Elon just wants to sell as many cars as possible because each car on the road is a potential sale of FSD once it proves out. He's creating a massive market for software margins of 90%+ by lowering the auto margins.

Short term it looks bad on the fundamentals, but long term it will likely prove out to be a brilliant forward looking decision. Given how good FSD v12 is and how fast it seems to be improving now, we may be close to the FSD turning point. I'd say within the next year or two is extremely likely.

I also find it interesting how Ford is currently designing a car with robotaxi potential, yet Ford is not working on autonomy. Given how Elon has stated at least one major OEM is working with Tesla to get FSD, it makes me very curious if FSD sales & revenues will not only be from Tesla owners but possibly other OEMS like Ford as well. The market for FSD sales might be larger than most people are thinking right now.

 

[Usain]

Rinse and repeat lesson for OEMs right there. I remember the GM headlines about beating Tesla to market with the $35k vehicle. By a WHOLE year! How did that turn out?

I bought that GM vehicle back in 2017. I needed a new car (old one died). And I wanted to go electric. Model 3 was just starting to ramp so I didn't think I could get my hands on one.

It turned out fine for me overall. The Bolt performed well and it was fun to drive. But it wasn't long before I was complaining on the Bolt forums that the Bolt had no future if they didn't at least try to compete with Tesla on range and other features. Of course, I was told how wrong I was. They even tried to tell me how much better it was to go to a dealership to get a software update.

It was clear that Tesla was moving fast and GM wasn't moving at all. Since then I've bought 3 Teslas and never looked back.

 

[Usain]

Of course if FSD 13 comes along and is genuinely end-to-end no intervention for 99.999% of drives, then all bets are off and its robotaxi time, but WAY before that I expect FSD to become a huge driver of sales for people cross-shopping between EV brands.

I don't think there will be an FSD 13. Can't tempt fate. Better they skip to FSD 14.

 

[Usain]

Of course if FSD 13 comes along and is genuinely end-to-end no intervention for 99.999% of drives, then all bets are off and its robotaxi time, but WAY before that I expect FSD to become a huge driver of sales for people cross-shopping between EV brands.

There are some here (including me) who have argued there will be no noticeable increase in the take rate until either the price comes down or FSD is so good you can take a nap.

But you do make an interesting counter-argument. Even if you don't have the money to buy FSD or you just don't think it's worth the price, you might still buy the Tesla over another brand because of FSD.

If I'm shopping for a car, I might want the one that is at least FSD-capable.

 

[NicoV]

No, I do not want to see Telsa paying any protection money. You don't give the bully your lunch money. You punch the bully until they learn to leave you alone.

It’s not about giving in to the bullies, it’s about letting the bullies eat each other alive.

 

[Unpilot]

I have HODLing for a decade. The General Advertising is a trigger in spite of all the product, finance and manufacturing prowess TSLA has. Why, you ask. That is an excellent question.
When general advertising happens, if it does, it is a signal that the deep dedication to cost effectiveness, efficiency and waste avoidance has ended. Other disasters then happen.

With other things such as FSD, Gigapress, Octovalve, etc have happened they all happened because the opportunity to do something unprecedented and make a major advance justified the risk and uncertain timing of results. I approve of that.

With general advertising there is no probability of payback simply because it has no path to increased efficiency. The counter argument is to demeaning price decreases as wasteful when those directly increase the qualified buyer capacity to buy. Regularly Elon and Tesla explain that, not a demand problem but a capacity to buy problem. General advertising has no such direct link is large infrequently purchased products.

In short, people decide to buy a house or a car. They then begin to gather information and look for what they choose to buy. Some look not at all, because they've pre-decided. Those sometimes will change timing based on price or terms. Nothing in that process benefits from general advertising.

If I might.....it seems to me that what you fear is what I see every day as I watch the NCAA basketball tournament.

That is a repeating adds for either a tough guy in a truck (Ram,GM, Ford)
Or a cool dude in a Kia or some other SUV.

I Only watch TV to follow my College team (Go Illini!)

The obnoxious adds for the above just grate on me.

Were Tesla to do that....then yeah I am out as well.

 

[DragonWatch]

Forward Observing

Last Sunday, 24Mar24, day and date are unimportant other than recent memory. I was on the outer periphery of a discussion as my son-in-law was willing to pencil the cost advantage with a friend on buying an EV. Within this group there are two Tesla’s and one “other” brand. This is sort of the cusp slash tipping point. I live my life as an example, not as a rule of thumb. My son-in-law/daughter receive a quarterly check to cover their “Y” payments ~ the terms of the deal was “buy a Tesla” and I’ll cover the payments. I was talking to my wife about helping another friend go electric; however, instead we helped them get their mother-in-law evacuated out of Ukraine. This was all before our stock took a bloody nose dive and the government reinstated with limitations the $7,500 incentive. The discussion last Sunday gives me hope that people, despite misinformation are awakening to the need to electrify.

 

[Linkmeup]

There are some here (including me) who have argued there will be no noticeable increase in the take rate until either the price comes down or FSD is so good you can take a nap.

But you do make an interesting counter-argument here. Even if you don't have the money to buy FSD or you just don't think it's worth the price, you might still buy the Tesla over another brand because of FSD.

If I'm shopping for a car, I might want the one that is at least FSD-capable.

I dont get it - If they are testing whole fleet adoption take rate of FSD, then subscription and not just the whole purchase should be a part of the discussion. Its cheaper over the short-term and more expensive over the long-term if one is an early adopter type.

If one is a mass market adopter type, then I can see how people go on and off of FSD until, eventually, buying the whole sw package once they find it helpful. The key is what would it take to make a mass market adopter to find it useful enough to buy the whole package. For example, their car turning into a robotaxi and generating money for them when theyre not using it. Other benefits could be improved safety, increased utilization of their car, etc.

 

[Zaxxon]

Not even true a little bit. You watch how the word supervised makes zero difference to the new crop of FSD triers, or the resultant media headlines etc… Not even an itty bitty bit of difference.

Already disproven, as I've seen others having a similar reaction as me to 'Supervised.' As to whether it makes a significant difference now, well, that's a different proposition. Tesla made the bed they're in, and now they lie in it. My comment related to naming it better from the start, which is not a possibility on the table in 2024, eight years after the FSD name debuted.

 

[GOVA]

This is why I think Elon is willing to cut margins on the cars to scary low levels. While everyone is worried about Tesla's car margins this year hurting profitability (and it will), Elon just wants to sell as many cars as possible because each car on the road is a potential sale of FSD once it proves out. He's creating a massive market for software margins of 90%+ by lowering the auto margins.

Short term it looks bad on the fundamentals, but long term it will likely prove out to be a brilliant forward looking decision. Given how good FSD v12 is and how fast it seems to be improving now, we may be close to the FSD turning point. I'd say within the next year or two is extremely likely.

I also find it interesting how Ford is currently designing a car with robotaxi potential, yet Ford is not working on autonomy. Given how Elon has stated at least one major OEM is working with Tesla to get FSD, it makes me very curious if FSD sales & revenues will not only be from Tesla owners but possibly other OEMS like Ford as well. The market for FSD sales might be larger than most people are thinking right now.

I mentioned this several pages back. Rumor had it that Ford would first license FSD/HW from Tesla. I still think this will happen.

 

[Rarity]

It’s not about giving in to the bullies, it’s about letting the bullies eat each other alive.

We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that plays it is lost!

 

[Krugerrand]

I bought that GM vehicle back in 2017. I needed a new car (old one died). And I wanted to go electric. Model 3 was just starting to ramp so I didn't think I could get my hands on one.

It turned out fine for me overall. The Bolt performed well and it was fun to drive. But it wasn't long before I was complaining on the Bolt forums that the Bolt had no future if they didn't at least try to compete with Tesla on range and other features. Of course, I was told how wrong I was. They even tried to tell me how much better it was to go to a dealership to get a software update.

It was clear that Tesla was moving fast and GM wasn't moving at all. Since then I've bought 3 Teslas and never looked back.

So, maybe you just answered the Ford Lightning (sp? ) issue?

 

[Krugerrand]

Already disproven, as I've seen others having a similar reaction as me to 'Supervised.' As to whether it makes a significant difference now, well, that's a different proposition. Tesla made the bed they're in, and now they lie in it. My comment related to naming it better from the start, which is not a possibility on the table in 2024, eight years after the FSD name debuted.

Everybody who bothered to click ‘yes’ to the permission screen in the first place knew it was ‘supervised’.

You’re making excuses for people that Tesla has no control over. That the word in their headline meant something different to you, and a handful of other people, this time then the first 83 times it appeared in the permission screen over the years is as relevant has the handful of people it meant something to when they clicked ‘yes’ and continued to click ‘yes’ every time a substantial update came through in the past. Approximately nothing. You either are paying attention and engage your brain or you don’t.

That instructions for toasters come with a warning not to plug them and submerge them in your bathtub speaks to people in general. The word supervised means nothing to those who need those toaster instructions.

 

[Usain]

I mentioned this several pages back. Rumor had it that Ford would first license FSD/HW from Tesla. I still think this will happen.

Yeah, the more I think about it the more I think this makes sense. Jim Farley gets it. And we know there is a skunk-works project happening at Ford that sounds a lot like Tesla's Gen 3. What if part of that project includes licensing FSD from Tesla?

Ultimately, it's going to be hard to sell a car that can't drive itself. OEM's that don't license FSD will die a quick and painful death.

 

[Stretch2727]

5 million on Sept 17 2023 so close to 2M run rate.

https://twitter.com/x/status/1773775354315841596

 

[jerry33]

This is completely wrong. Do you REALLY think every single car company on the planet is wasting their time? That despite spending billion over decades on advertising, nobody thought to look into its effectiveness?

The difference is that most other car companies are pretty generic, so generic advertising works for them because they don't have any actual features that are better than others.

 

[ItsNotAboutTheMoney]

The difference is that most other car companies are pretty generic, so generic advertising works for them because they don't have any actual features that are better than others.

The generic advertising is the relentless nudging of people to buy a new vehicle.