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

[Usain]

Honestly what's the benefit to a government. From the govt POV

Higher efficiency. Better economy. Less pollution. Less parking lots. Cheaper transportation. Happy citizens.

And, of course, not looking like a backwards country/state/city that doesn't even have robotaxis.

 

[Thekiwi]

Tesla did NOT offer discounts this deep all throughout Q1. They made a temporary $1000 price cut in early Feb. They began to offer more deep inventory discounts late in March - mainly MY 7-seaters and really just the last 10 days as verified by my friend. I know because I was in the market for a MY here in Cleveland (a single data point I understand). Then they raised prices $1000 on MY across the board earlier this month; this was announced in Mar this would happen April 1 after the temporary discount. I've been buying and selling Teslas every S3XY model except S accross the last decade. Tesla offers inventory discounts from time to time, as well as other incentives. They will probably do something similar the end of this Q. What else is new? This does not connotate demand issues necessarily.

Again right now, just to keep us in context here, we are ONLY talking MY (at these deep discount levels) and ONLY in the US, and ONLY this Q. If inventories remain constant, that's what we want 25-35 days in inventory has been Tesla's kind of mean over the past 5 years (showed this in a previous post). We ended this Q with 28 days. Keeping inventory in this range, and ASP (and TTM FCF always) are what I'm eyeing this and next Q.

Eh? Inventory discounts are in place in many countries, and have been all year.

 

[primedive]

For me this changed with the free trial of FSD. I prefer driving toward the right and was always uncomfortable with how far left Driver Assistance positioned inside the lane Additionally, my car would always yell at me for driving to the right. Now with FSD installed, the car is driving to the right, where I feel more comfortable.

On 2 lane rural roads with no shoulder, I find it’s a bit much. It’s almost putting the two right wheels onto the gravel, and it’s not far from there into the ditch. Only need to move over like that if there’s a big vehicle coming over the other way.

 

[dhrivnak]

Tesla Suggestions.

As with many people I was quite disappointed in the Q1 P&D numbers. So, it got me to thinking how could Tesla increase demand other than dropping prices. As we have found dropping prices hurts margins, tarnishes Tesla’s “luxury” image and hurts us owners by depressing resale values. If this is best in a separate thread, I am good with that but would like to get your thoughts on these ideas:

• Fast track battery production in the USA – The Model 3 lost the tax credit this year, effectively raising prices 15-20%. Since the battery pack is identical to the Model Y, do what needs to be done to use USA made cells giving the customer a significant 15-20% price reduction with little impact to margins.
• Add Vehicle to Home capability – Like Ford and Kia vehicle to home (20A 120V outlets or even 40A NEMA 14-50) plugs would be a great improvement in functionality allowing one to power their refrigerator or even a mini-split heat pump in the case of a disaster or power outage. I hear the onboard charger may already have this capability. If not I am sure it can be added for a minor cost.
• Consider a hatchback design for the Model 3 – I was disappointed that the much larger Model 3 was able to carry considerably less than my tiny Volt. A hatch back design as we see with the Model S is very handy and useful for carrying larger items.
• Add an option for a tow hitch on the Model 3 – Many Model 3 owners carry bikes or an occasional trailer. Like with the similar Y offer a hitch for $1000 as costs are likely less than $500.
• Give FSD for a year – For nearly $0 cost to Tesla give a full year FSD to all buyers. After a year people can then order or get a subscription after they had a plenty of time to see what the package really has to offer.
• SuperCharge Destination Charging – Partner with the National Park Service and/or State Parks to install Tesla destination chargers. We saw this in Canada and it is a great way to subtly advertise Tesla, to a crowd that is likely open to an EV. It also helps to combat range anxiety by showing the public that charging is available even in remote park destinations.
• Give Sales People Demo Cars – The sales people I have met are nice and friendly, they seem to have almost no practical knowledge of EVs. Allowing the sales people to take car home would help to educate them, a lot. It would be a nice perk for sales people, ensuring quality applicants, And it would greatly increase the demo fleet that could be sold at a discount without discounting new cars. Maybe even extend this to mechanics as well.
• Add extra colors – People want their cars to be unique and/or distinctive. So offer more options for colors and maybe charge only a small premium $500 rather than $1000 preserving the base price of the cars.
• Proceed with the Model 2 – Even if it needs to be a $30K car, let Wall Street and the majority of the world know there is a smaller car coming. Much of the world is used to cars smaller than the Model 3. With only 5 models to choose from Tesla can definitely benefit from more models.

What do you think?

 

[Musskiah]

Eh? Inventory discounts are in place in many countries, and have been all year.

$5000-$7000 off a MY discounts "Many countries...all year?" Is that a fact?

Like I said, China has inventory of all models combined in the 100s. Just based in pure volume, the European MY inventory numbers are a third to a quarter of the US. The US is far more significant than the rest of the world combined when it comes to inventory sales of of MY. This is likely why they are discounting so heavily here.

 

[nativewolf]

Higher efficiency. Better economy. Less pollution. Less parking lots. Cheaper transportation. Happy citizens.

And, of course, not looking like a backwards country/state/city that doesn't even have robotaxis.

More pollution as RT will cause congestion and will increase overall vehicles on road. Why better economy? Less parking lots? Why? I mean I can see in 30 years maybe. But from here to there? At the price people on here put on RT it wont' be cheaper. Efficiency? Governments care?

I don't see it for many countries, the negatives in the short term seem to outweigh any benefit.

 

[jschwefel]

One could conclude softening EV demand without the appropriate facts. Allow me to provide them:

The cumulative U.S. inventory (see below) is similar to peak inventory throughout Q323 and Q423. MX inventory has improved, as well as M3. MY demand is soft, yes, which is exemplified by the deep MY discounts in the US only. The demand for the other three models seem to be as good or better than with recent historical trends. Blanket statements like "EV demand is soft" misses the point I have just articulated, because it is not wholly true. This is also true of Q223 (not pictured) which looks similar to 2023-07-14 below, where M3 MX and MS all remain stable. Of course, as M3 Highland ramps, we should watch this chart to ensure the refresh continues to draw demand.

The point is this: we are talking 6000MY inventory vehicles in the US being discounted $5-7k. We are talking a $32-42M maximum possible discount. This is like 1.5% of all Teslas that will be sold in Q2. These discounts are a rounding error (especially in light of Energy Revenue explosion which will eclipse thes discounts [pun intended Eclipse Day]). If these levels remain stable, within just a couple quarters, Austin and Fremont lines have to go down in quick succession to retool for Juniper, while concurrently interest rates drop - this should solve the temporary build up in MY inventory over the long run. Also, Tesla will want substantial MY inventory going into the MY refresh.

Lastly, remember Tesla has stated time and again that they WANT to maintain inventory to flatten the wave. I think we can see below inventories become less wave-like.

I open the floor for those who want to kill my hopium vibe. J/K I love the banter. Thanks everyone sincerely for the counter arguments. The healthy back-and-forth discussion is what I love about this place!

CUMULATIVE US INVENTORY 4/23-PRESENT
View attachment 1036805

Europe is hardly out of the ordinary, well within historical norms, hence no deep MY discounts. My concern would be M3 refresh isn't taking hold if M3 inventories continue to rise.

CUMULATIVE EUROPEAN INV 4/23-PRES
View attachment 1036816

CHINA LESS THAN 500 CUMULATIVE. ITS NORMAL, SO I DIDNT SHOW IT.


SOURCE: Tesla New Inventory Counts, aggregated at a Europe level

So you’re telling me…demand is soft.

 

[advocate8]

Side note on that last point about brake rotors/pads:

If you don't use them much, the pads and rotors on any car can last a long time even without regenerative braking....so the statement Elon made is perfectly reasonable.

An honest reader/commenter would recognize that this was a tweet, not an essay meant to cover all extremes and edge cases. Elon was replying to somebody who didn't seem to know about regenerative braking at all. Honestly, I have seen people talk about "wearing out the regenerative brakes" or even suggesting that for the Model 2, Tesla could "save cost by removing the regenerative brakes." There were, and still are, plenty of people who don't understand the basics of an EV...so Elon was explaining how an EV works and the potential implication..

In the real world, we know there there are many Teslas that have had their brake pads and rotors replaced by an owner who is a bit of a "spirited driver" or perhaps just prefers to use the brake pedal instead of mostly "one pedal driving." And of course folks who track or autocross their Teslas are replacing even more often. That is logical to expect. Physics exists, and regenerative braking can't cover everything. But, I have no doubt that a judiciously driven Tesla without some mechanical brake-related flaw can potenailly go "the life of the car" without needing to replace the brakes.

If I want to go the "technically correct" route, I can also point out that Elon tweeted that brake pads on "a Tesla" never "need" to be replaced. It is logical to assume a "need" might arise under some usage scenarios...and Elon did NOT say tha brakes would last forever on "every single Tesla, no matter how you drive it." Again, in context, an honest and thoughtful reader of a short tweet would understand the intended implications -- a reasonable person would not expect 100% accuracy including all extremes and edge cases in a brief tweet.

Spoiler: My personal anecdote with brake pads on a gas car.

My personal anecdote:
Google tells me that most cars get 30-70,000 miles out of a set of brake pads in a gas car, but it also points out that "some can last as long as 100,000 miles."

In the right conditions, on a regular old gas car, I've gone 150,000 miles, repeatably.

I bought an automatic 2008 Honda Fit new and still own it. 340,000 miles of mostly open-road driving: a 65-mile-each-way commute between a mountain and a desert, mostly 55 mph roads with only a few stops. I drive carefully...trying to coast a ways before I need to apply the brakes at the stops I can predict. Of course I use the brakes when they are needed.

I have replaced the front brake pads twice, once at around 150,000 miles, and I'm pretty sure the second time was at over 300,000 miles. I smoothed out the rotors each time, but did not replace them...so the rotors are still original. The rear has drum brakes, and I have not had need for any maintenance or replacements on those.

Sure, a Honda Fit at 2500 lbs is much lighter than a Tesla. It's also only got 15 inch wheels with small rotors and pads, and it has zero regeneration...and the Tesla 4-wheel disc brakes to further spread the wear, while the Honda is relying mostly on the front disks with some stopping power coming from the rear drums. And I ddrop 4000-6000 feet in elevation on most drives (and then obviously drive back up on the round trip).

So...yeah, if I can get 150,000 miles on one set of pads and 340,000+ miles on rotors and drum brakes, I sure as heck believe most EV's could exceed that and approach "the life of the car" if driven carefully.

Elon is right. I took it to mean exactly that, they don’t “need" to be replaced, with his subtext being “if you drive it like you should.”

 

[MC3OZ]

What do you think?

Good suggestions.

Tesla is going to install some CATL equipment to make LFP battery somewhere in the US, the can be used for:-

• Model 3
• Megapack
• 300 mile Semi?

Different colors are being introduced there were some Model Ys in a new silver color similar to the Cybertruck color in the testing and calibration lot at Austin recently.

The biggest thing that will make a difference for Model Y is an upgrade similar to the Model 3 Highland refresh, but that also means downtime in this case at 4 factories.

Cybertruck as V2H and I think all future Gen3 vehicles may have it. others models will eventually.

For now the main focus is probably on the Cybertruck ramp, and the work for the Robotaxi unveil 8/8.

The macro environment is a bit of a headwind, and sometimes progress is a slow grind for a while. So I think they are trying to make progress ASAP, but sometimes staying in the grind is what is required.

 

[advocate8]

I know a good bankruptcy attorney based near you. You might be interested in them if you follow your 'Not intersted' line a while longer.

From ignoring info about as useful as what number to play on the roulette wheel? OK, sure.

 

[wtlloyd]

I was sure they would fight this one to the bitter end

They want it out of the newscycle, a clean launch of RT without this fight being played out. Lose a battle but win the war.

 

[jschwefel]

Seriously, of the 1.8 million vehicles Tesla sold in 2023, over 1.3 million (+70%) of them were Model Ys, and that was accomplished with little to no advertising. Clearly an amazing accomplishment. Now what will we do for an encore?

 

[Musskiah]

Zanegler Semi update Apr 6. His summary: New Semi build is large! Pace is slow, not as urgent as Texas seemed. Not worth watching.

 

[Skryll]

Let's switch up the FUD and look at Carsharing-Anbieter wollen weniger Elektroautos German Mainstream News website reporting that EV are declining in fleet and rideshare adoption 'too complicated and expensive' citing Hertz and "toxic rechargeable batteries" with "limited lifetime" as reason for decline in adoption.

 

[primedive]

More pollution as RT will cause congestion and will increase overall vehicles on road. Why better economy? Less parking lots? Why? I mean I can see in 30 years maybe. But from here to there? At the price people on here put on RT it wont' be cheaper. Efficiency? Governments care?

I don't see it for many countries, the negatives in the short term seem to outweigh any benefit.

One option: subsidize rides to mass transit and subsidize pooled rides while charging a congestion fee to trips toward the center? Cities have different levers at their disposal and the smart ones will use robotaxi to reduce overall car traffic and make cities more livable. Hopefully at least some of them decide to be smart about this.

 

[MC3OZ]

Seriously, of the 1.8 million vehicles Tesla sold in 2023, over 1.3 million (+70%) of them were Model Ys, and that was accomplished with little to no advertising. Clearly an amazing accomplishment. Now what will we do for an encore?

We will find out something about that 8/8.

I recommend following following @alex_avoigt on X and if you do that you might find a video of something that might be a Robotaxi on a repost from around a day ago... Or otherwise, it is just an interesting video to watch...

 

[Waiting4M3]

Given this and the fact Tesla saw a YoY decline in auto sales while the majority of the ICE auto industry saw YoY increases, I think one would have to conclude EVs are experiencing some demand softening. Clearly this isn’t just a Tesla thing; BYD posted poor numbers as well. However, since legacy auto has posted a string of solid quarters, it doesn’t appear to be channel stuffing.

So…when in doubt, zoom out. 2023 was a really good year for EVs; growing something like 47% over 2022 numbers. That kind of growth is tough to maintain, especially when the other brands are having issues, our President won’t recognize Tesla, and a popular presidential candidate consistently talks nonsense about electric cars. I’m confident eventually this negative perception will give way to the reality that EVs, particularly Tesla EVs, are just better vehicles, but at this point I’m just hoping the Model Y will hold onto the crown of being the world’s best selling car again in 2024.

So far I’ve been super impressed with FSD 12.3.3, and while I can’t say it’s passed the “wife” test yet, it certainly has impressed her. This and the 8/8 reveal of the RoboTaxi are excellent news! I don’t concern myself with the manual drive version of this car. This “manual drive” option will make the car more complicated and more expensive than the basic RT, so people will pay more to drive the car themselves. For this reason it makes sense the basic RT will be first to market, but it’s yet to be seen if Tesla actually sells them.

Anyway, it’s never a dull moment with Tesla. While I wish I was smarter and could have times the ups and downs in TSLA over the last few years to accumulate more shares, I’m content to just sit with what I have and watch all this unfold. That contentment is rooted in the fact that Tesla has the best and brightest in their field, and they have a track record of delivering the impossible…late.

Whole heartedly agree with most of your points. Just want to add one thing that people may underestimate how long the traditional OEM's pipeline is. The fed actually keeps track of a statistics that might reflect, the auto inventory/sales ratio, while it's recovered some from the sharp drop in 2021, it's still way below pre-pandemic level. OEMs are still stuffing the dealers.

Auto Inventory/Sales Ratio

Graph and download economic data for Auto Inventory/Sales Ratio (AISRSA) from Jan 1993 to Feb 2024 about ratio, inventories, vehicles, new, sales, and USA.

fred.stlouisfed.org

 

[jschwefel]

We will find out something about that 8/8.

I recommend following following @alex_avoigt on X and if you do that you might find a video of something that might be a Robotaxi on a repost from around a day ago... Or otherwise, it is just an interesting video to watch...

Yes! I’m definitely looking forward to the RT reveal on 8/8!! Before then, I’m hopeful FSD will start to get the attention it deserves when more and more people see and experience what this incredible technology can do.

EDIT: When average people (those who don’t eat and sleep on Tesla news) see millions of existing vehicles drive themselves with little to no supervision, THAT will be a redefining moment.

 

[Musskiah]

Cybertruck is only at half pack.


AntonioD ex Tesla ex Munro current catl said it's a vent channel . Nothing to see here

https://twitter.com/x/status/1777409957455090016

 

[dhanson865]

That dude doesn't know what he is talking about. He said rust on a disc makes the brakes stop working.

Reality is that rusty discs grab better than smooth ones. Your brakes don't fail to work, they work better with rust on them.