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

[Zaddy Daddy]

Hot take: Supervised FSD is the correct way to refer to the product, and had Tesla done this from the start, 80% of the crap they've taken for FSD wouldn't have occurred.

You are joking, right?

Supervised Full Self Driving is a contradiction. It's not "full". If it was "full", then it wouldn't need to be supervised.

Trust me, every person outside the Tesla bubble understands this common sense.

 

[AndrewZ]

I think the only people buying FSD are shareholders and extreme tech enthusiasts. The next big thing is supposed to be the $25k car, and people shopping in the $25k range are likely not paying an extra $12k for a software option lol.

I don’t think even people shopping in the $40k range are paying that, they have budgets and that’s why they’re in the <$40k range. A $12k software option on a $40k car makes Porsche’s option pricing look downright reasonable.

 

[Zaddy Daddy]

For >the last decade I have not sold a share of TSLA except for paying taxes and buying a house. On this forum and elsewhere I have been clear that a major trigger for me to sell would be the advent of general advertising. Recent events have caused me to put TSLA on my watch list. Placements to date have been highly targeted but recent use off exceedingly expensive media, including Facebook introduce higher risk.

I have not yet sold a share. If the situation moves to general advertising I will sell.

This si only indicating the careful watch, not a sale. They might just be using excellent analytics, particularly since nothing broad has yet happened.

I know numerous people think it is excellent to advertise for general awareness. I regard such opinion as erroneous simply because of inability to target likely purchasers for a product which is not and likely will not be, so ubiquitous as, say, Ozempic or Snickers or Wheaties, all of which benefit from broad advertising with modest targeting. Not so for cars, trucks and energy products.

The summary of this is simple: A long term bull is now realizing Tesla's brand value advantage isn't given it the extra margin cushion it once did, which has long-term implications to its automotive valuation.

He probably didn't expect to rely on valuation Tesla's AI to product potential for stock appreciation previously, which now everyone has pivoted to.

I will say, I think now isn't the best time to evaluate where Tesla is compared to other automakers. All EV demand is getting wrecked, it isn't Tesla specific. The fact is Tesla still has better margins on EVs than anyone else. Them having to using advertising to move cars in this market doesn't mean they aren't superior as an EV brand.

To me the question is less about marketing, and more about how much are people willing to pay for an EV and the associated costs?

Are electricity rates going to go down relative to gas costs in the next few years? Not sure elsewhere, but not in California it seems.

How much are people really going to pay for "supervised" FSD? I don't think most people are going to spend $100 / month, let alone $200.

This is why I model $5 in EPS in 2025 and not more.

 

[rallykeeper]

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

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

Probably modestly above given Cybertruck and Model 3 ramps. (Plus probably excess lost days of production this quarter in Berlin due to power and China due to holidays).

More importantly, we now know Q1 production will be modestly in excess of 450,000. Approx 5.546 million cars produced through December 31, 2023.

I'm not the data expert, but I'd think deliveries should come in fairly close to production given that it was a contracting quarter.

 

[SmokyPeat]

Well, after six years of wild ups and downs, I finally traded out of my Tesla positions yesterday. In addition to the grim near term outlook, I no longer see the CEO as a benevolent force for good. Who knows, I may buy back in near the end of the year if things don't really go off the rails. I'm just tired of seeing my portfolio wither while the rest of the market thrives. Good luck to all!

 

[2daMoon]

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.

Also, this helps achieve the mission, as the more cars that are sold the more the transition to renewables accelerates.

So, this makes it win-win to lower margins in order to sell everything they produce.

 

[Zaxxon]

You are joking, right?

Supervised Full Self Driving is a contradiction. It's not "full". If it was "full", then it wouldn't need to be supervised.

Trust me, every person outside the Tesla bubble understands this common sense.

Oh, absolutely it's a contradition. To paraphrase Tesla Sage Earl, It's analogous to 'Appreciating Asset (Depreciating)'. But since 'Full Self-Driving' (ie back-seat riding) was a non-starter when it started (har har), still is, and always will be on current hardware, specifically calling out the supervision-required nature right in the name rather than in the documentation/opt-in screens is a clear improvement. And IMO it would have deflected a lot of the well-deserved flak the company has gotten over the years.

Krugerrand clearly disagrees. That's OK.

 

[2daMoon]

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

They could go to a temporary nomenclature of BD* for FSD 13. *Baker's Dozen

Doughnut dispute such sage wisdom as this is where 13 is always considered a good thing.

 

[unk45]

I think it’s just a test. Maybe a test to prove all the proponents of conventional advertising that they’re wrong.

I haven’t seen any Tesla typical (or any kind of) advertising in my day to day Internet or TV usage. I only know it’s sort of happening because people report it here.

As I posted over in a Starlink forum, I did see a 15s blurb during a commercial break while watching a Perry Mason episode on a retro TV station. And I have seen a reoccurring post on my FB feed (that’s my only social media account/platform I visit/use partly because it’s what my mom knows how to use and it’s what local people and businesses use here in the middle of nowhere). Pretty much every hillbilly here has heard of Starlink and many have it.

Wouldn’t the content of the advertising be more telling for you? Like if a CT drove up a mountain in the dead of winter to power some lights on a pond so a kid could skate on said pond for her grandpa 100ft away - well, then. Yeah. I’m with you. But if it was an educational informative 30s?

Let’s face it, a lot of people can’t get out of their own way because the box they live in is so small.

Actually you make a perfect point, specifically about Starlink, one fo the more public-facing musk enterprises. You have seen a Starlink ad because you are, as you explain, in a very rural area probably, I surmise, with substandard public internet access solutions. I, on the other ahdn have never seen a Starlink ad (except within an off-site test) because both my residences are within major urban areas with a plethora of fast internet access solutions.
The advertising trick for non-ubiquitous markets/products, is to place the content in front of likely prospects. You, Krugerrand, seem to qualify. I, on the other hand, could buy , but am unlikely to want to deport my 1meg current products.

As in this case, at present Tesla advertising looks a trifle generic to those who see it, but it is not presented to unlikely buyers. To the contrary, among the finest prospects are those who already own an existing product. There Tesla excels by presenting highly attractive trading options, ones I've accepts three times thus far, for example.

The real question is what happens when/if Tesla decided to copy General Foods, P&G or Mars. Then, if it happens, we watch high Free Cash Flow disappear quickly.

 

[Zaddy Daddy]

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 agree that these cars can produce more revenue over the long term than less cars with a higher ASP.

Each car on average could probaby generate $50 / month in subscription fees from FSD. $600 a year.

Over 5 years, that's $3000. Not bad.

Another way at looking at it, say 4 million cars subscribe to FSD at $50 / month, then generate 2.4 billion in incremental revenue (mostly profit) per year.

 

[M|S|M MYP]

Well, after six years of wild ups and downs, I finally traded out of my Tesla positions yesterday. In addition to the grim near term outlook, I no longer see the CEO as a benevolent force for good. Who knows, I may buy back in near the end of the year if things don't really go off the rails. I'm just tired of seeing my portfolio wither while the rest of the market thrives. Good luck to all!

Good luck and godspeed.

 

[Curt Renz]

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.

True. However, dealerships expect their manufacturers to advertise.

 

[unk45]

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

With respect I did not intend to state that they are mutually exclusive, but that doing so was a signal. a signal is not immediately a fact, but an indication of very high risk. After all a signal indicating a train approaching a road is not perforce a crash if one crosses anyway, but is an indication fo very high risk, i.e. a signal.

I see it is a problem to use language here intending something with high likelihood vs something that will happen.

 

[Zero CO2]

the rhetoric on this thread is a repeat of 2018-2019 ... it is actually worse because there are a lot more posters complaining about TSLA SP , Elon antics , lack of demand blah , blah , blah .... i understand each investor has different goals , risk tolerance , and willingness to do the HW required to HODL....but many things have not changed in my opinion:

• the Tesla mission has not changed
• Tesla has the best EVs cars period... they crush every segment they enter
• CT will be a blockbuster in Pickup/SUV segment
• Legacy is stuck in the Innovators dilemma with no way out as they pivot backwards to Hybrid
• Big Oil/Auto needs to delay transition to EV as long as possible .... so they will continue to fund FUD in MSM.... helping weak hands part with shares
• TSLA continues to be valued as car company only by most of WS
• TSLA continues to be manipulated
• FSD, energy , BOT , compact are free options with every TSLA share

made some revisions

if history repeats itself we are about to like 2nd half of 2020....my guess is 3Q24-1Q25 for liftoff

 

[unk45]

True. However, dealerships expect their manufacturers to advertise.

This is the sentence that rules the decision in many cases. Regardless of efficacy, when highly influential interest groups want something that often happens. Auto dealers forced Hyundai to use lubricating coolants in abttereisn that required periodic changes so dealers could continue with mandatory annual service. Others, such as Volvo EV's (I own one) have required service even though there sin nothing to do except air filters, refrigerant checks, wiper blade replacement and tire inflation. They change these unnecessary things to satisfy dealer revenue requirements.

A major OEM client of mine agreed that their advertising budget was wasted, but could not resist the demands of dealer and large shareholder insistence. We did manage to replace much of that with direct marketing devices that actually worked superbly.

 

[GOVA]

Whomever can see Joe's photos from his latest flyover G-TX, see the number of CTs stored nearby. It is quite something else, compared even to last week. He estimates 1K/Week which is still just a beginning.

Point: Overwhelming majority of those new CTs sold take a bite from other trucks. "Let that sink in"

 

[Zero CO2]

Oh, absolutely it's a contradition. To paraphrase Tesla Sage Earl, It's analogous to 'Appreciating Asset (Depreciating)'. But since 'Full Self-Driving' (ie back-seat riding) was a non-starter when it started (har har), still is, and always will be on current hardware, specifically calling out the supervision-required nature right in the name rather than in the documentation/opt-in screens is a clear improvement. And IMO it would have deflected a lot of the well-deserved flak the company has gotten over the years.

Krugerrand clearly disagrees. That's OK.

If the stated goal is supervised driving then it will be just that supervised driving with no need to pivot to ETE Neural Nets ... that is why the aspiration is FSD ... Tesla engineers will make the words true in the long run
similar to the space X Mars goal .. if the goal is not Mars then none of the "stuff " required to reach mars will be achieved

 

[2daMoon]

Point: Overwhelming majority of those new CTs sold take a bite from other trucks. "Let that sink in"

That may be a valid point some day, but until the reservation backlog is worked through anyone looking at trucks today don't actually have Cybertruck as a choice. Nor will they for several years.

Granted, it might be taking sales away for those willing to reserve today and wait years for a CT, but anyone needing a truck today will not be a sale lost to the CT.

However, the mere fact that the CT has years of production reserved is indeed something the other OEMs might be getting a "sink in" feeling about.

 

[Knightshade]

Probably modestly above given Cybertruck and Model 3 ramps. (Plus probably excess lost days of production this quarter in Berlin due to power and China due to holidays).

More importantly, we now know Q1 production will be modestly in excess of 450,000. Approx 5.546 million cars produced through December 31, 2023.

I'm not the data expert, but I'd think deliveries should come in fairly close to production given that it was a contracting quarter.

Troys current delivery estimate last I heard was under 410k.. and he tends to be very accurate this near to EOQ... so if production is >450k that'd be a massively large glaring gap between the two (largest gap ever)

 

[unk45]

The summary of this is simple: A long term bull is now realizing Tesla's brand value advantage isn't given it the extra margin cushion it once did, which has long-term implications to its automotive valuation.

He probably didn't expect to rely on valuation Tesla's AI to product potential for stock appreciation previously, which now everyone has pivoted to.

I will say, I think now isn't the best time to evaluate where Tesla is compared to other automakers. All EV demand is getting wrecked, it isn't Tesla specific. The fact is Tesla still has better margins on EVs than anyone else. Them having to using advertising to move cars in this market doesn't mean they aren't superior as an EV brand.

To me the question is less about marketing, and more about how much are people willing to pay for an EV and the associated costs?

Are electricity rates going to go down relative to gas costs in the next few years? Not sure elsewhere, but not in California it seems.

How much are people really going to pay for "supervised" FSD? I don't think most people are going to spend $100 / month, let alone $200.

This is why I model $5 in EPS in 2025 and not more.

Actually not. The Tesla model has scaled nicely. There is not such drop in demand, for Tesla, as much as an unusual confluence of events has unfolded including Suez canal, Berlin grid attack, planned transitional year, explicitly including new model and product development, massive pent-up utility/large commercial stationary storage demand plus slower than expected buildout of 4680.

None of those are permanent or even longterm signofacnt.

Despite that many people thing this is Armageddon or the equivalent. It is not. Tesla has far to go with excellent prospects.

The problem si that many fo us se every sign as bad, and feed even more FUD everywhere else. Those factors put the company at risk to adopt stupid solutions because so many influential people ahave simply lost faith.

if you've lost faith don't blame it on market saturation. That is objectively not in evidence.

However all that raises risk. That if why I watch to see for signs of capitulations to foolish advice. I don't intend to be rude. I'm just tired.