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

[Singuy]

But car sales, overall, seem to be up like 3 percent in 2024 YoY.

Teslas are down- by quite a bit we now know.

So your explanation still doesn't seem to line up with the data?

Uh yes, as big auto has more inventory, we are bound to see more car sells as they alleviated their bottleneck while market adjustment ends at dealers. Tesla didn't take ALL the sales from what big auto lacked, they just had a small juice from their lack of inventory and over priced cars at the dealer level.

 

[Knightshade]

Uh yes, as big auto has more inventory, we are bound to see more car sells as they alleviated their bottleneck.

So...when legacy increases inventory sales go up.

But Tesla doubled inventory and sales are way down?

And that makes sense to you?

 

[uscbucsfan]

Tesla told us they were going to flatten the delivery curve and increase inventories. Some of you act so surprised and want this to translate into a demand issue. Perhaps let's take a breath and realize the average days in inventory was 71 in Dec 2023. Tesla at 28 is still on the long tail.View attachment 1034587
SOURCE: New-Vehicle Inventory Surpasses 2.5 Million Units, 71 Days' Supply - Cox Automotive Inc.

Or just continue to freak out and I'll be over here applauding Elon for his masterful move to pad the inventories in a down Q to lure in a few more shorts before the obvious explosion in autonomy that we all seem to have forgotten about.

To anyone selling, I thank you good people for the stock sale

Comparing dealer model inventory to Tesla's is apples to hand grenades.

 

[brkaus]

We have two out of warranty Teslas would like to replace. Plus add a new car for the kids (they currently share a 2016 leaf with a new 40kWh battery).

Almost replaced the S last quarter.

Wife said her model 3 is her favorite car ever. But cannot buy a new one due to the CEO (and im also banned from buying a Tesla).

 

[jerry33]

The people who think car ownership will end are on the opposite end of the extreme of those that think there's no market for robo-taxi. Like most things in the world, the truth is in the middle. There's a market in big cities and it would generate a ton of revenue, but in the US, people will still own cars, especially outside of large cities.

And parents. It's a real pain to install and remove a child seat for each ride--which is what a Robotaxi requires.

 

[ZsoZso]

FYI, my forecasts have never been over and never change within the quarter, and if people would take mine they’d always be pleasantly surprised and happy when all was said and done. 383,000 in the bag.

Congratulations!
You have beaten Troy, providing the most accurate estimate!!!

 

[Singuy]

So...when legacy increases inventory sales go up.

But Tesla doubled inventory and sales are way down?

And that makes sense to you?

As legacy increase inventory, prices at the dealer level came down PLUS there's now inventory. We know legacy was production constrained for at least 2 years. Is there something here that's confusing? Tesla navigated through the chip shortage but due to a lack of inventory from legacy auto, they had unprecedented demand ...kind of like all legacy makers at the dealer level. Tesla increased their price by 20k while dealers increased their prices by 10-20k. I mean if demand remained the same for the world and inventory from Legacy dropped off by 30-40%, that causes some crazy shifts in everything. Now that legacy is recovering from a lack of inventory so we see more car sells.

 

[uscbucsfan]

And parents. It's a real pain to install and remove a child seat for each ride--which is what a Robotaxi requires.

Most people who currently drive daily aren't going to rely on a taxi (driver or not) to get to and from work, hospitals, grocery store, etc.

Far into the future when most work is automated, maybe...but there are still vacations, visiting family, and daily activities.

 

[Knightshade]

As legacy increase inventory, prices at the dealer level came down PLUS there's now inventory. We know legacy was production constrained for at least 2 years. Is there something here that's confusing?

Quite a bit.

Your theory seems to be Tesla sales are down ~35k YoY because more people are buying ICE cars instead of Teslas... yet somehow that's not a demand concern for Tesla?

 

[AndrewZ]

Tesla told us they were going to flatten the delivery curve and increase inventories. Some of you act so surprised and want this to translate into a demand issue. Perhaps let's take a breath and realize the average days in inventory is 71.View attachment 1034587
SOURCE: New-Vehicle Inventory Surpasses 2.5 Million Units, 71 Days' Supply - Cox Automotive Inc.

Or just continue to freak out and I'll be over here applauding Elon for his masterful move to pad the inventories in a down Q to lure in a few more shorts before the obvious explosion in autonomy that we all seem to have forgotten about.

To anyone selling, I thank you good people for the stock sale

Before COVID I believe the target inventory on hand for the big automakers was more like 90 days, that was a pretty standard number.

However for Tesla to move from its historical level of inventory to 70-90 days is an absolutely massive amount of money spent with zero revenue for those vehicles. Rough math if you throw a quarter’s worth of vehicles into inventory at this scale, say 400,000 x $45k average sale price, that’s $18billion. If we talk cost rather than price, x $35k is $14billion spent with no revenue to match.

 

[willow_hiller]

Sorry, but look at the title of the survey you cite: "The Most Famous Business Figures (Q4 2023)". These are not approval ratings. Yes Elon is very famous. But, increasingly, for what?

My unscientific view, based on my own experience is that people in my acquaintance are polarized against Elon, unlikely to buy a Tesla, or even own the stock. This is notwithstanding my evangelism and experience with our car. I also think some of the recent downward stock price and sales trends in the US are related to his polarizing conduct, and do not expect US sales to improve compared to ROW for this reason. Very unhappy about it, but my head is not in the sand. Long-term investor, MY owner.

Did you look at the site beyond the title of the page? It defaults to sorting by fame, but the ranking I was citing is their "Popularity" metric, which they define as "the percentage of people that have a positive opinion on a topic."

Yes, Elon is incredibly well known. But more people have a positive opinion of him than any other business figure, second only to Bill Gates:

 

[stealthyc]

The Tesla brand has become completely toxic and a total non-starter for half of Americans, and that is 100% entirely Elon's fault. The effects of that are now being reflected rather severely in terms of demand.

Let's not be too dramatic. I live in a very liberal bubble, and people are still buying and like Teslas regardless of how they feel about Elon. I'm certainly not saying it doesn't have an impact, but "completely toxic and a total non-starter for half of Americans" is way over the top if you are talking about the Tesla brand itself.

 

[mongo]

While I do appreciate that I think if you asked an employee "How did this error happen?" and his only and entire explanation was "Well, it was partially due to my screwing up at my job" and then that's all they said, you might be reasonable in drawing certain conclusions about how accurate their use of "partially" is in the response.

But the other side of that is- if you DO accept the idea they only, intentionally, gave a partial and incomplete answer, you now have to consider what the REST of the unspoken answer is.

If it isn't supply, it must be demand.

Thus we can reach one of two conclusions in all this (and I apologize if my previous posts lacked clarity on this, but perhaps the below resolves that?):


Either Tesla is refusing to admit there's an actual, real, demand problem right now (more likely IMHO)
or
Tesla doesn't think demand is a concern and they misused the word partially in the excuse they gave for the really low delivery numbers being production related (less likely IMHO)

I don't follow your example. If an employee knew they were responsible for a 100 unit drop in production and the company missed by 1000, they would say partially. Now, the P&D words come from a higher level than a line facing employee, so it's all a bit non-exact.

My point was that Tesla didn't blame it largely on the factory issues. If they had, that would indicate an attempt to downplay other factors versus leaving them unsaid. Not specifically calling out those other issues doesn't mean they are refusing to admit they exist (which largerly vs partially would), only that they chose not to enumerate them.

That said, it can also be (not saying it is) the logistics between supply and demand. Hyperbole for illustration, if transit takes a week and 90% of production occurred in the final week, deliveries would only be the 10% built before then regardless of number of buyers. Again, speaking to possible vs probable.

However (and speaking more to language in general, not the real life specifics of this situation), if there were stong demand issues, then would it be the case that factory issues are only a factor to the extent buyers canceled their orders due to the delay? In which case..

 

[replicant]

Or the plan is to ramp up inventory before a layoff. It is the auto industry after all. The big question is how long inflation/interest rates remain high and EV demand slow.

I thought the plan was to ramp up production, and not to follow the auto industry stupid rules.

Did we forget the mission? If we have a demand problem, perhaps we should wonder why those who can afford a Tesla don't buy one. And do something about it (or be honest and drop the mission).

 

[DarkandStormy]

https://twitter.com/x/status/1775157795366551763

 

[Singuy]

Quite a bit.

Your theory seems to be Tesla sales are down ~35k YoY because more people are buying ICE cars instead of Teslas... yet somehow that's not a demand concern for Tesla?

As I explained in my first post, people are not as desperate so they are unwilling to buy cars in the winter BECAUSE the world has inventory now. This is why Tesla is not very concerned about demand THIS Q.

 

[uscbucsfan]

Did you look at the site beyond the title of the page? It defaults to sorting by fame, but the ranking I was citing is their "Popularity" metric, which they define as "the percentage of people that have a positive opinion on a topic."

Yes, Elon is incredibly well known. But more people have a positive opinion of him than any other business figure, second only to Bill Gates:

View attachment 1034590

Bill Gates may be the most hated non-politician in the US from the right...

I guess that makes me question that poll even more. Not even making it political, Bill Gates and Elon are insanely polarizing.

 

[Usain]

It is insane to me that even the new $7500 incentive which now actually lowers the car payment didn't help.

I don't think we really know that. Given that BYD also posted abysmal numbers, we can conclude that there is a ton of weakness in China, which is not affected by the $7500. So I think a lot of this bad number is related to China.

Since Tesla doesn't break out sales by region, we can only estimate US sales. And given that US sales were hurt by M3+ ramping, that makes it even harder to tease out the effect of the point of sale $7500 tax credit.

I really expected the $7500 to be a great tailwind as the government is giving you the down payment for free. My guess is that it didn't help that much in Q1 for whatever reason. But it's only a guess.

 

[phantasms]

The Tesla brand has become completely toxic and a total non-starter for half of Americans, and that is 100% entirely Elon's fault. The effects of that are now being reflected rather severely in terms of demand.

I identified this specifically as the #1 biggest risk to Tesla's brand several years ago, although many (not all) of my posts expressing that opinion were deleted as too political.

Anyway, i was absolutely right.

Fair warning to Tesla itself, and anyone still holding shares. This demand problem will not cease as long as Elon is still the CEO. It's not about price or competition. You may not like it, but that is the unpleasant truth.

I would go even further to say that Tesla is aware of this issue. Lately many other executives have been doing interviews, replying on Twitter, etc. Tesla is aware of the problem. Hopefully the problem gets truly resolved and I only see one way to accomplish this.

To the handful of people who will give me thumbs down. I don’t post often but when I do I speak the hard truth. I get 80% thumbs up, 10% hearts, 8% , and 2% thumbs down. Maybe start asking yourselves why you’re always the odd ones out.

 

[willow_hiller]

Bill Gates may be the most hated non-politician in the US from the right...

I guess that makes me question that poll even more. Not even making it political, Bill Gates and Elon are insanely polarizing.

As I said in my original post on the data source, business figures in general are disliked in this current political climate. Only 30% of those polled have a positive opinion of Tim Cook, compared to 47% for Elon. You don't see articles citing Tim Cook's unpopularity as sinking Apple.